Daily Doom

[doodab]

So there he was in 1978, saying there would be a big bull market

When it comes to the stock market, there is always a big market in bull.

The techniques used for predicting stock market movements are educated guessing at best. I suspect that if there was a sure fire method for prediction people would use that instead of inventing ever more complex methods to squeeze a profit from hedging and volatility.

[doodab]

But that isn't what happens in a stock market; nothing gets removed; stocks are traded and will change hands as soon as the owner is offered enough money to part with the shares at any particular time; that amount may be more or less than he pad for them.

But it isn't random. The probability that someone will sell at a particular price depends on what has happened in the past and what they expect to happen in the future.

[Mich the Tester]

But it isn't random. The probability that someone will sell at a particular price depends on what has happened in the past and what they expect to happen in the future.

It depends on hundreds of things of which we have no knowledge; has that person made a profit? Is he trying to cut his losses? Does he want the cash to buy a new TV? Is he just a clueless f***wit?

There are so many dependencies that the behaviour of the system is chaotic; you can never know enough to predict the market's behaviour, because tiny differences in the conditions at any one time can lead to massive fluctuations in the end results.

[SupremeSpod]

But it isn't random. The probability that someone will sell at a particular price depends on what has happened in the past and what they expect to happen in the future and the tulip that gets printed in the NY Times, FT etc.

FTFY.

[doodab]

It depends on hundreds of things of which we have no knowledge; has that person made a profit? Is he trying to cut his losses? Does he want the cash to buy a new TV? Is he just a clueless f***wit?

There are so many dependencies that the behaviour of the system is chaotic; you can never know enough to predict the market's behaviour, because tiny differences in the conditions at any one time can lead to massive fluctuations in the end results.

unpredictable is not the same as random though.

Meaningful predictions can be made about the aggregate outcome of random processes using probabilistic and statistical methods, hence the large body of knowledge related to gambling.

This is not true of the stock market.

[Mich the Tester]

This is not true of the stock market.

thank you

Pseudoscience in the Investment World - SkepticWiki

[sasguru]

At least one idiot on this forum has convinced themselves that they can make a living from "technical analysis" of the stock market.
That comes from ignorance of the deep mathematics underlying it - as Doodab and Mich have pointed out there's a difference between taming randomness with statistical methods which allow one to make predictions, and chaotic/turbulent systems which are deterministic but unpredictable.
A salutary read is "A mathematician play the stock market" by John Allen Passos.