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RE: Common Mistakes in Forecasting

in #trading7 years ago

No, that is nonsense, the TA is no better than randomness, it might be worse.

In the sense that in roulette if you place your bet on the red chip, if you lose that doesn't mean that placing it on the black one would result in win.

It's random, and randomness goes both ways. Taking trades opposite to TA is exactly like taking bets opposite to "gambling strategies".

They are both useless, and no better than the random walk output.

For your strategy to be profitable, it must have smaller errors than the random walk output (the previous value as the forecast for the next one).

That still not guarantees profitability, but if it's higher than that, then it's certainly not profitable.

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