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Ol’ Wisco | Now repeat the experiment again, and again, and again etc. While the end result shall end up near to the same the "structure" or "pattern" would wind up similar sometimes and extraordinarily different many others with no rhyme or reason to why, which is caused by randomness. From a purely mathematical standpoint markets act similarly but the points of data in the distribution are random. A Harvard study on a set of randomly chosen markets over a randomly chosen time frame (of the same length for all) showed that 99.3% of them displayed a rather symmetrical Gaussian distribution of there daily log returns even though there price action was drastically different, along with their "structure". Why do you think that the majority of Wall Street and Chicago has moved to a quantitative means trading. It is my belief that markets are no longer controlled by human emotion and rational which are patternable. Until we have the random e.i black swan event, that brings emotion back into the game.
I will do my best to find the link to that study. | |
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10,000 coin flips. . .
