harrytrader Elite Member Registered: Aug 2002 Posts: 4405 12-18-03 08:48 AM "Normal distributions are not the norm." http://www.pyzdek.com/non-normal.htm Non-Normal Distributions in the Real World "After nearly two decades of research involving thousands of real-world manufacturing and nonmanufacturing operations, I have an announcement to make: Normal distributions are not the norm. You can easily prove this by collecting data from live processes and evaluating it with an open mind. In fact, the early quality pioneers (such as Walter A. Shewhart) were fully aware of the scarcity of normally distributed data. Today, the prevailing wisdom seems to say, 揑f it ain抰 normal, something抯 wrong.? That抯 just not so." (Read the whole story directly on the site it's funny) So if you knew the philosophy of Walter Shewart you would find that all the debates about Normal Law is ridiculous because it is normal that Normal Law is not so normal __________________ This is the way an opinion gains acceptance in France. Fifty ignoramuses repeat in chorus some absurd libel that has been thought up by an even bigger ignoramus: and, if only it happens to coincide to some slight degree with prevailing attitude and passions, it becomes a self-evident truth. Frederic Bastiat 1801-1850 This is course true for every nation. -------------------- Last ignomarus in my ignore list : BALDA, PSPR, STEVEXXX, PRINCE PHILIPPE, SPITFIRE

OddTrader Elite Member Registered: Mar 2003 Posts: 1128 12-18-03 04:32 PM "Normal" is just one of many distributions Just 2 cents: As probably stated by Deming, there is no any substitutions to knowledge (for management or improvements). I would think what we need is the proper knowledge required for when/ how to apply different probability distributions ( http://ftp.arl.mil/random/random.pdf ) to different problems/ situations.

09-08-03 09:44 AM Why a traditional tecnical analyst cannot trade Traditional technical analysis based on market's action is performed statically because all they know are supports and resistances. They don't know the DYNAMIC law. Only Elliotists take into account this dynamic but the rules are extremely complex and will give many combinatorial possibilities (so that at the end an elliotist must still heavily bases his judgement on his intuition). That's why some traders use indicators to compensate the lack of dynamic. Still indicators are fuzzy and many whipsaws will result of their use. So avoiding whipsawing is one of the main problem and in practice one must be very reactive that's why analyst has some difficulty to be a trader because they aren't trained to do so and market will evolve and make them doubt. So as market evolves you must be able to evaluate if what you have analysed is still true as stated here like in Chess: "The dynamic evaluation of a position, as concluded after the analysis of the best move, should match the static evaluation of the position performed before the analysis." Is it possible ? I say yes and I will show that with a true modelisation of market (by true I mean a causal economic model and not extrapolation and fuzzy explanation by psychology of crowd) it is possible to have a precise evaluation of a break zone for example. Here's an illustration: http://tinyurl.com/mlpa Secondly to understand the comments you must know the rules (which is copied from the homepage). As you can see they are very few contrary to Elliott rules: CENTRAL CONCEPT "There is only one single and simple law: a minimum or a maximum on projection line (interpreted as target line in green color) and their dual on base line (interpreted as consolidation line in blue color) are important turning points for the market for that scale and under. By rule extension points around the crossing of the two lines are also important. As complementary guidelines: - By experience each turning point / break should be confirmed on next period and next neighbour point. - When a target is passed without consolidation it is said to be forced and consolidation generally follows to retest that forcing zone (generally on globex or within 24h if it happens on hourly scale). - Market can fail to make a potential target and can then "retrace back in time and price" following a counterclock path. But after that retracement which can constitute an healthy consolidation it can resume the previous trend to tempt the target again. - Iinteraction between different scales follow a hierarchic logical framework. - Both spot and future charts are normally for spot only although future should follow fairly well the model with a few minutes in advance. - On globex future contract behaves like spot without the spread between spot and future during RTH (regular trading hour)." __________________ This is the way an opinion gains acceptance in France. Fifty ignoramuses repeat in chorus some absurd libel that has been thought up by an even bigger ignoramus: and, if only it happens to coincide to some slight degree with prevailing attitude and passions, it becomes a self-evident truth. Frederic Bastiat 1801-1850 This is course true for every nation. -------------------- Last ignomarus in my ignore list : BALDA, PSPR, STEVEXXX, PRINCE PHILIPPE, SPITFIRE

09-08-03 09:44 AM Why a traditional tecnical analyst cannot trade Traditional technical analysis based on market's action is performed statically because all they know are supports and resistances. They don't know the DYNAMIC law. Only Elliotists take into account this dynamic but the rules are extremely complex and will give many combinatorial possibilities (so that at the end an elliotist must still heavily bases his judgement on his intuition). That's why some traders use indicators to compensate the lack of dynamic. Still indicators are fuzzy and many whipsaws will result of their use. So avoiding whipsawing is one of the main problem and in practice one must be very reactive that's why analyst has some difficulty to be a trader because they aren't trained to do so and market will evolve and make them doubt. So as market evolves you must be able to evaluate if what you have analysed is still true as stated here like in Chess: "The dynamic evaluation of a position, as concluded after the analysis of the best move, should match the static evaluation of the position performed before the analysis." Is it possible ? I say yes and I will show that with a true modelisation of market (by true I mean a causal economic model and not extrapolation and fuzzy explanation by psychology of crowd) it is possible to have a precise evaluation of a break zone for example. Here's an illustration: http://tinyurl.com/mlpa Secondly to understand the comments you must know the rules (which is copied from the homepage). As you can see they are very few contrary to Elliott rules: CENTRAL CONCEPT "There is only one single and simple law: a minimum or a maximum on projection line (interpreted as target line in green color) and their dual on base line (interpreted as consolidation line in blue color) are important turning points for the market for that scale and under. By rule extension points around the crossing of the two lines are also important. As complementary guidelines: - By experience each turning point / break should be confirmed on next period and next neighbour point. - When a target is passed without consolidation it is said to be forced and consolidation generally follows to retest that forcing zone (generally on globex or within 24h if it happens on hourly scale). - Market can fail to make a potential target and can then "retrace back in time and price" following a counterclock path. But after that retracement which can constitute an healthy consolidation it can resume the previous trend to tempt the target again. - Iinteraction between different scales follow a hierarchic logical framework. - Both spot and future charts are normally for spot only although future should follow fairly well the model with a few minutes in advance. - On globex future contract behaves like spot without the spread between spot and future during RTH (regular trading hour)." __________________ This is the way an opinion gains acceptance in France. Fifty ignoramuses repeat in chorus some absurd libel that has been thought up by an even bigger ignoramus: and, if only it happens to coincide to some slight degree with prevailing attitude and passions, it becomes a self-evident truth. Frederic Bastiat 1801-1850 This is course true for every nation. -------------------- Last ignomarus in my ignore list : BALDA, PSPR, STEVEXXX, PRINCE PHILIPPE, SPITFIRE