Hello,
I am a mathematician, so I like when every action is explained mathematically. I use various statistics in my trading systems starting from support/resistance (to see which level statistically more accurate) to validating patterns (for instance if a certain kind of engulfing patter has more probability to work). My systems have moderate success trading automatically. So I am pretty happy with them and math behind them.
However few weeks ago my friend, also a math graduate, pointed out to me that his research shows that statistics does not work in market, he ran a lot of long term simulations and says that the price has probability to go up or down around 50% all the time. Tiny imbalances leading to trends do not last and almost impossible to catch with retail data.
I need to point out that we were talking about Forex, he said that in equities picture is much better for math traders. About my systems he said that the success is temporary and soon will be eliminated.
What do you think? Do you calculate any stat for the market? Have you found it useful or not useful?
I am a mathematician, so I like when every action is explained mathematically. I use various statistics in my trading systems starting from support/resistance (to see which level statistically more accurate) to validating patterns (for instance if a certain kind of engulfing patter has more probability to work). My systems have moderate success trading automatically. So I am pretty happy with them and math behind them.
However few weeks ago my friend, also a math graduate, pointed out to me that his research shows that statistics does not work in market, he ran a lot of long term simulations and says that the price has probability to go up or down around 50% all the time. Tiny imbalances leading to trends do not last and almost impossible to catch with retail data.
I need to point out that we were talking about Forex, he said that in equities picture is much better for math traders. About my systems he said that the success is temporary and soon will be eliminated.
What do you think? Do you calculate any stat for the market? Have you found it useful or not useful?
Wookey