tech/a
No Ordinary Duck
- Joined
- 14 October 2004
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inverted XAO, fair point...
One thing that fascinates me about upside down charts is that most of them don't look "right". Without being able to quantify what it is, they look wrong somehow. There's a huge untapped market inefficiency lurking somewhere in a deep dark pool!
Very true....
Well GB, one thing that's obvious is that the declines are slow, and the inclines are fast. The opposite of a normal market!
To me, that's what makes it look so strange.
CanOz
There should be a way to exploit that, but I can't think how. Any ideas?
Very true....
Well GB, one thing that's obvious is that the declines are slow, and the inclines are fast. The opposite of a normal market!
To me, that's what makes it look so strange.
CanOz
http://cssanalytics.wordpress.com/2...link-between-volatility-and-compound-returns/t is important to note that risk premiums- or the relationship between required higher rates of return for higher risk- are arithmetic. That means that the curious underperformance of high risk stocks/assets versus low risk stocks/assets probably has less to do with a hidden risk factor or behavioral bias, but rather the fact that we are compounding our wealth
The way to exploit what? The upside down chart looking strange?
If you are talking about exploiting the difference in slope between rises vs falls, you'd probably need a strategy around some volatility-based instrument (options).
I'd be averaging down
I think this is the concept of option skew? Option prices reflect that stocks fall at a fast rate than they rise.
97% of domestic traders do.
3% ARE making money 97% are gambling that they MAY make money.
I'd be averaging down
Yes, the goal would be to "lose" money, inverted chart wise.
Basically that chart highlights why not to average down in an actual falling market, I was poking fun at averaging down.
I've been wondering about value investors, in a falling market the lower the price goes, the better the fundamentals look, and the more money is lost.
Would it be correct that the higher the market goes the worse the fundamentals? Because the fundamentals are clearly u/s at the moment, I'm curious how much worse they will get.
My conclusion, buy into crappy fundamentals for gain.
Guy buying "fundamentally sound" oil, mining and other small cap specialities blows up his account. Disapproves value investing & averaging down forever.If Duc had averaged down as his fair value stocks fell he would have blown up sooner.
I can see us back at 5030 soon. Yesterday and today both weak bars rejecting new highs.
Since January 05 the SPI has gained a sum total of only 241 points during the day trading session. While the market has gone up 2500 points!!! All of the gain has come in the overnight gaps. Most of the day moves are filling and fading around the general trend
Guy buying "fundamentally sound" oil, mining and other small cap specialities blows up his account. Disapproves value investing & averaging down forever.
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