we learned the value of technical trading today. at first i was all excited. i can do numbers! unfortunately, technical traders are also called chartists. they basically believe that the market is non-markovian (eg if you flip a fair coin and get 4 heads in a row, you're very very likely to get a tails on the next flip). i asked at the beginning of the session whether data mining techniques counted (eg if the National League wins the superbowl, then the market will be bullish and vice versa). the guy basically made fun of me and said that correlation without causation is astrology. THEN he turns around and introduces terms like golden cross, gravestone and dragonfly doji, shooting star, bearish engulfing, hanging man, harami, hammer, etc. apparently, the fibonnaci ratios also play some mystical role in market prices (as in market prices will want to stay within two bounding ratios).
what really topped today off was:
RSI = 100-100/(1+RS)
where RS = (no. up days)/(no. down days)
hmmm...seems complicated, right? but if you do some simple math, you get:
RSI = (no. up days)/(no. total days)
why the fuck are they presenting RSI with that stupid, unintuitive formula? if RSI is high, the price is gonna drop the next day, and if RSI is low, then the price will rise. so. if the price has been rising, then tomorrow, it will fall. basically, the history of coin flips will influence the future of coin flips. finance at its best!
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3 comments:
fyi, the national league is baseball, and the championship in baseball is called the world series. :)
Hey Lily!
Haven't seen you online in a while :(. I am supposed to tell you that outfit says hello.
sigh, picky picky. fine. i thought national conference sounded dumb, so i called it a league.
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