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There is a probability here but I would say the ideal inputs to the
calculation are not price and volume. They are the economic conditions and
the nature of the environment the company is in.
Failing that it has been my experience the longer the trend has been in
effect the higher the probability it will remain intact for the next "short
term".
Look at Cdn bank stocks - they trended up for 3 years. The probability of
their trend breaking down must have been low - but it eventually happened.
I thought your question was good. As a trend follower I would be interested
if you come up with a formula.
David Duggan
Tim Gadd wrote:
> I need help with the logic for determining what I'm calling the
> "Persistency of Trend Probability" for a security.
>
> I want to determine the likelihood that a security's next 21-day price
> change will be in the same direction (up or down) after the latest
> 21-day price change exceeds the average 21-day change. The purpose of
> this is to isolate securities that exhibit a threshold (say 70%)
> probability of trend persistency.
>
> Any assistance in producing the logic for this would be appreciated. Or
> if you know of a better approach to determining a persistency of trend
> probability, I'm open to other suggestions.
>
> Forgive me (again?), please, if this is a duplicate post. I subscribe to
> the digest only and have not seen this post appear after 3 attempts. In
> view of this, if replying, I would appreciate if a copy could be sent
> directly to my e-mail address as well as a reply post.
>
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