100% market prediction and some other thoughts

[epic767]

Learn the market and how to make get good returns


One should buy a share when it's increasing in value and sell it when it's decreasing in value. Yet so many people seem to do the opposite- they are selling the share when it's increasing in value, and hold to it then it's decreasing in value because they believe it might go up in value again. And I can gladly tell you that e trade offer programs that let yet you atomize your sell and buys of shares so you don't have to sit in front of your computer all the time =)

If you buy a share for 10 dollar from 10 different companies, and if one share drops to 9.9 it will sell the share automatically and invest the money on the shares that are going up, and if the share increases to 10.1 you will buy more shares and so on which makes you earn more money progressively all the time even if the probability of the share going up is 50% since you are investing the money you got by selling the shares that devalued into shares that increased in value.

This will make your portfolio less diversified after a while so you have to keep looking for new shares that are increasing in value so that you always have a very diversified portfolio and also add to the fact that the market return in a bull market maybe is 10%. Which gives a major advantage as opposed to losing your investments which is why one should invest in a bull market since you have the odds on your side (also common sense). Yet many people lose all their money in casinos and games where the odds are really against them. And remember you can dramatically decrease your risks by knowledge and experience(because there are a lot of successful investors who have got an average return of over 25% pa continually for over 10 years, which suggests that one can get good return with the right knowledge and experience.)

Look at this chart which is a framwork of how the human mind reacts toward certain events and movements in the market. http://www.asx.com.au/asx/WidgetChartServlet?asxCode=XJO&width=630&height=240


As we can see the probability of the market going up is higher than going down if you choose to buy the market when it is going up

And the probability of it going down is higher than going up if you buy the market when it's going down.

So if the market is going in a direction it’s more likely that it will continue that direction than going opposite.

And if there is a strong decrease as we can see in the beginning of the graph, it;s more likely that it will continue with the same strength of decrease or increase. So if the market only increases by a slow amount it's more likely that it will keep increasing by only a slow amount and not a strong increase. And the lighter the increase or decrease is, the higher the probability is that the trend can go from increase to decrease.

Another thing one can see is that if the decrease is very strong (or increase), chances are very high that the trend will explode and change direction with a very strong increase. This statement might be a bit contradictory to the statement before where i said that if the market is going in one direction, it's more likely it will continue that direction, but only until the big turning point.

So if you are buying a share that's increasing tremendously for maybe 10 dollar, you should sell it if it devalues to 9.9, and not 9.95 because it might only be a temporary decrease but let that temporary decrease only be temporary because if it keep decreasing you should sell it immediately because the more the trend keeps decreasing the more likely it is that it is going to decrease and continue its direction.

Another thing where one can earn really good return is too look after opportunities where the share or the market has decreased tremendously and then buy the share or the market when where is an increase that is double the amount of other previously small increases in the big decrease.


Maybe someone says that it's a waste of time because basing a decision on historic data is not a guarantee that the market will repeat itself because the market movement relies on new data. That's why it's a waste of time trying to figure out how the market will move if one is basing his decision on past data. But yes, you can predict the market if you base your decision on new data or data that is of relevance and is currently important for how the share will move.


But the human mind won't change over a couple of decades and one has to learn how the market/group of human minds reacts towards movements in the market or other events, such as that the trend is more likely to be faced with a big decrease if it has increased tremendously over a period of time. This is the best data from which to base a decision on because it’s reliable and won’t change during your lifetime. But keep in mind, that the human mind is only half the truth.

Because, you can never predict the market by 100% unless you are able to obtain all future and relevant data the market is going to base it's movement on, unless you have access to all internal and external information that might have effect on the entity.

100% market prediction= understanding the human mind in a market context+ having access to all relevant and future data regarding the entity and being able to process the data into useful information from which can draw conclusions.

(All relevant future data, might be data such as a terrorist attack)

 

[epic767]

We should therefore put an emphasis on the human mind in a market context when buying the market because that's the only data you have full access to since you will never have access to all external and internal data.

 

[peto]

So what you are saying is that a share will probably continue to move in the same direction, unless it changes direction; we will know it has changed direction when it has moved quite a bit in the wrong direction.

How very helpful. I'm sure the millions will roll in now, thanks.

It's about the same as you said in the threads you started recently ... "Common Sense" and "Predict the market with 90% accuracy ". Pleased to see you have mastered the extra 10% now.

Perhaps you should finish your studies and/or trade for a bit, and then you might have something worth saying.

 

[epic767]

Peto: Nope, you are misunderstanding, or you have probably only skimmed through everything.


If a share is increasing, it's more likely that it will keep increasing than decreasing. The graph also shows that.

It's getting more clear now that you havn't read my whole thread, which you should do before criticizing, because I have never provided a method on how to get 100% accuracy, only what is required and I did actually state that it's virtually impossible to predict the market with 100% accuracy.

Perhaps you should read the thread next time.

 

[epic767]

By the way. the thread predict the market with 90% relates to W.D. Gann achievements, and not something I have ever accomplished.You are biasing everything and trying to change the facts as well as the fact that I have never provided a method on how to get 100 accuracy and I have never told you that the millions will roll in because of the ideas provided.

Jieez.

 

[ERA]

I have to agree with Peto here.

A question, Have you ever bought or sold a share in your life? Going by your niave ramblings, I think not.

There theoretics are a waste of time. Go apply your theories to actually trading something, and tell us how it went. I predict with 100% certainty that you will not be able to matching your theories to practice.

 

[epic767]

Era: So i guess that you don't agree with the fact that if a If a share is increasing, it's more likely that it will keep increasing than decreasing.

or that the market is basing its movement on future data rather than pasta data?

Or all the other things I said.

Give examples of things that you don't agree on and then we will see.

 

[Jcob]

Epic,

I know that I am saying this in a quite direct way but I say it anyway:

Your posts show a total 100% lack of understanding of markets and trading. Also, they are naive to extreme. Furthermore, you preach a little too much from someone who has never traded (as you state in another thread). Remember, that many members on this site have spent years or decades with these issues.

Regarding your Statements of Gann, do yourself a favor and do not believe all that you read. Also, in another thread you refer to (claimed) results over periods of 1 months and 3 months. Results over such short periods do not have any statistical significance, even if real.

Regarding your suggestion on how to trade: Your lack of understanding is potraid how you fail to address the most basic questions of trading:

1. When exactly do you buy
2. Where do you take a loss
3. Where do you take profits

The devil is in the details.

Regarding 1: You say that you buy when a stock is going up. Allright, please define "going up". Stocks do not go up in a straight line, they zig zag along the way. Where exactly do you determine that a stock is going up and thus buy? When you start to search for an answer to this question you find yourself in the beginning of a very long road and it may take years before you find the answers, more likely you never will.

Regarding 2: OK you say you get out when the stock goes down by 10 cents. Good, you have an exact rule. The downside is, you will get chopped to pieces with such stop. To ad insult to injury, there will plenty of cases where your stop will get hit and the stock reverses immediately and goes way up.

Regarding 3: You state nothing about this. If your intention is to hold for a longer period be prepared to have most of your unrealised profits disappear as the stock that was nicely in profit turns around sharply. If you take profit when the stock seems to turn to the downside, be prepared to find yourself exiting at about the worst possible price just before it resumes the uptrend.

Everyting looks easy in hindsight. In real time, what seems to go up will reverse on you on a dime. What seems reverse, will shoot back to the original direction just when you least expect.

Again sorry for the very direct tone of this post but I think your posts deserve it.

 

[epic767]

Jcob: No problem, I want to hear the truth from someone who knows.

1 Well it might go zigzag, but you will determine whether it has gone up or down by reviewing it once a day or every other day. It would be very impractical and the transaction costs would it up your profit if one would react on every real-time movement.


2 It's all about discipline with this method. As soon as it drops by 10 cents you should sell it even though if you know it might resume its directions. You will benefit from this in the longer run. And if it do resume it direction you might be the share again if it meets your probability criteria.

3this method is not without risks so of course the share might drop tremendously, and you will sell it as soon as you can and maybe an overall loss. That’s the worst possible scenario.



However, you will aim to make an overall profit; because the profit you make is bigger than the decrease you will experience in the end, and then sell it.

Example:
You look in the charts for shares that has maybe gone up by at least 20 cents for two days (that might be your criteria)

. You buy the share and it goes up by 10 cents, and the next day it goes up by 20 cents and the third day it decreases by 10 cents and you sell it immediately.

And you have made a 20 cent on every share.

And then it increases by 20 cents, but you don't buy it because your criteria is that the share has to go up by at least 20 cents for two days, which it hasn;t because it just decreased. And if it continues to increase the next day you might buy the share.

Usually, from what I’ve seen from all the graphs I’ve looked at with shares that have displayed at least an 20 cent increase for two days, the decrease that you will experience, won't be as big as all your increases, so you will still make an overall profit.

I believe that the probability of a share going up is bigger than 50% if the share has gone up by 20 cents for the last two days and you might use fundamental and technical analysis to further prove this.

An alternative method might be to buy shares that have displayed a 30 cents increase for at least one day, and you hold to it and sell the share immediately when you've made 10 cent on each share. But you have to be disciplined and not act around your emotions.

The benefit of this method is that there is less chance that you will experience a decrease, and the downside that you will sell the share even its increasing in value. I would however advocate method one where you feel the decrease and keep making profits as it is increasing. One could however mix these two methods and apply which method is most applicable in a given circumstance and be more flexible.

 

[ERA]

I want to hear the truth from someone who knows.........

2 It's all about discipline with this method. As soon as it drops by 10 cents you should sell it even though if you know it might resume its directions. You will benefit from this in the longer
3this method is not without risks so of course the share might drop tremendously, and you will sell it as soon as you can and maybe an overall loss. That’s the worst possible scenario.

An alternative method might be to buy shares that have displayed a 30 cents increase for at least one day, and you hold to it and sell the share immediately when you've made 10 cent on each share. But you have to be disciplined and not act around your emotions.

epic,

You want to hear the truth. That is something only you can find out for yourself, no one can tell it to you, it is something that everyone has to discover for themselves. By placing a trade. All your theories can be great on paper. But as soon as you press that button to buy or sell everything changes, those little ticks up and down which meant nothing before are now magnified 100 times. Every tick against you magnifies your fear and doubts that you maybe just are wrong on this one.

Its easy to say you will be disciplined and not act on you emotions, but you can only find that out by actually doing it.

As for the 10 cents stop that is pure rubbish, on a 60 cent stock that might be ok, but on a 80 buck stock you will get your ar$e torn out in seconds. Using a arb stop like that is nonsense, every stock and every trade will require some different sized stop. unless one of your filters is to only enter a trade where you can get away with a 10 cent stop, which will narrow your scope of trades a lot.

I am not trying to knock you back, it just sounds like you are trying to expound some kind of academic thesis here with your posts, only thing is most people here will be more practical minded people who through experience know that these types of theories are not practical in the markets.

 

[A Dashing Blade]

Again sorry for the very direct tone of this post but I think your posts deserve it.

Thought you let him off very lightly!

 

[peto]

Perhaps you should read the thread next time.

I'm ashamed to admit that I did waste far too much time reading the thread, as well as your previous rubbish. Rarely on these boards have I read such a load of complete twaddle, written by an idiot who seems to have a vastly over inflated ego and over-confidence in half baked theories; combined with a pitiful lack of knowledge, understanding and experience. When you eventually get round to actually trading these qualities will make you prime material for the markets to mush up and spit out.

For the record, paragraphs 2, 3, and 4 of your Post 1 are cut-and-pastes of paras 4 and 5 of your Common Sense thread with minor format changes. An unfortunate thread title where so little common sense is apparent. Unfortunately the endorsement by Socrates probably only encouraged you, but remarkably the guy has written even more rubbish than you in the past so I would not allow this to sway you.

Stick to the studies for now. When you trade (and I know you will) keep your stakes and risk capital small and, when it's all gone, step back for a while and read some of the excellent stuff on these boards, some decent books, and really study the markets for a good long while before dipping any toes back in.


pete