In 1963,Paul Samuelson was having lunch with one of his colleagues ,another economist,E.Cary Brown.Samuelson,in a playful mood,said at lunch,hey let's toss a coin,let's make a bet just for the fun of it,and if it comes up heads,I'll give you $200,but if it comes up tails,you give me $100.He said ,let's do it I'm ready.This kind of took E.Cary Brown by surprise.E.Cary Brown said,come on I don't want to do this, Samuelson was being annoying by doing this.Then Samuelson had another idea,he said,what if I offered to let's do this 100 times,We'll toss a coin 100 times and each time it comes up heads I give you $200 and each time it comes up tails you give me $100.This time ,E.Cary Brown said ,well,if we do it 100 times,I'll do it .of course ,they didn't actually do it .Samuelson then said he went back to his office and he wrote a paper(something called Prospect Theory) ,proving that E.Cary Brown was irrational.
Then what is your idea? was E.Cary Brown irrational? if you were E Brown,what is your choice ?I think the game of tossing a coin is absolutely as same as forex trade.Forecasting exchange rates has a success rate no better than that of forecasting the outcome of a coin toss, Alan Greenspan said. and fti said ,three very important ingredients for you live in any markets :One is " Market Structure ", the other is "YOU", then Capitalisation. Agreed!
I think i have understanded something ,and you ?
Then what is your idea? was E.Cary Brown irrational? if you were E Brown,what is your choice ?I think the game of tossing a coin is absolutely as same as forex trade.Forecasting exchange rates has a success rate no better than that of forecasting the outcome of a coin toss, Alan Greenspan said. and fti said ,three very important ingredients for you live in any markets :One is " Market Structure ", the other is "YOU", then Capitalisation. Agreed!
I think i have understanded something ,and you ?
A chart helps those who can read it.