|
PureBytes Links
Trading Reference Links
|
Bob, thanks for a very good explanation of this. I did not want to get to
involved in this, but I was intrigued with the idea of how to use the
distribution plots as a tool for trading. Particulary to see when stocks
are acting normally, or close to it and when they are not (lognormally).
I was able to figure out how to get these plots to look like the ones in
the text books (ge gif attached). But when I did that, I found that the
information it displayed was of no use to me. The original idea was to be
able to update daily prices in a spreadsheet and plot the distribution
ranges daily to monitor the shift's. I had wanted the actual price range
in the Y axis to be able to see this range. When you do that you do not
get the traditional Log normal Plot. A better example of what I wanted to
do is with the OEX Plot. I calculated the distribution on 2,3,4,5,.....10
day range. Then I overladed the plots on each other. Now I was able to
see where the shorter term distributions lay in comparison to the longer
term (in this case 10 days). This was useful to me because it helped show
me that the 2 and 3 day distribution of the OEX was near the tail end of
the 10 day distribution and maybe it was overbought. Well, I think that
is all everybody wants to hear about distribution plots so I will end
this.
Ron McEwan
Attachment Converted: "f:\eudora\attach\oex dist.gif"
Attachment Converted: "f:\eudora\attach\ge_dist.gif"
|