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people using stochastics, rsi, or any other momemtum based
indicator effectively are applying statistical concept without
knowing what they are doing - thus, go straight to bankrupcy
is the expected result.
> bullshit! gaussian stats got mister victor bankrupt. i suspect that in
time
> it will do you in too!!!
>
> but it's not the stats that did him in, but that he used the wrong ones
> :))
>
statistics has a few branches ... but that does not matter.
the key to successfully apply statistics is to make sure the
"test" and "confidence level" are high enough.
e.g. the wrong way - use moving average crossover by
optimizing them, which means you "guess" that the moving
averages are close approximation of the moving mean ...
even after optimization, the moving average values may
very well at 70% confidence interval only. so, they mean
nothing more than "noise" as MB mentioned :)
most people thought they know statistics when they can
do some averaging, some standard deviation, etc.
In reality they have not even learned the concepts correctly.
So they blindly apply stat calculations and trust the numbers
crunched out say from their option software, thus, they
will in time lose it all when the "exception" hit.
I think I lasted thru the crash of 87 and am still around ...
just because I learn statistics well and truely understand
how to apply them, not misuse them :)
-Lawrence Chan
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