Apophenia as an apologist for clairvoyance in the capital markets. - page 2
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Secret signs: what is apophenia and whether to get rid of it
Read more on RBC:
https://trends.rbc.ru/trends/social/61aa37f69a7947e4318e2a43
Apophenia is not the ability to see what is hidden, but the ability to see what is not there at all, i.e. delusion.
Seeing a face in the face of a car is not apophenia, but a fantasy based on associations.
Seeing the face of a car as a face is closer to the subject.
" In very short, the quotation chart can be compared with the text. "
Exactly the same words I've said on this forum before, they don't get it)))
" In very short, the quotation chart can be compared with the text. "
Exactly the same words I've said on this forum before, they don't get it)))
A private question came up, part of the answer to which I want to make public.
One of the readers of the article asked me to take the data on AT&T stock quotes dynamics, which shows no correlation with the dynamics of indices, for 2000-2010 and build a forecast for 2010-2021 in order to understand what forecast could be made using my method and whether it would coincide with the real dynamics that took place.
I will give my answer below.
Every financial instrument, be it a currency, a stock or an index is a separate non-linear dynamic system. This is why we have to separate dynamics of single stocks from dynamics of stock indices, because fractal structures on these charts are different even though they have the same mechanism of formation.
In order to predict something, it is necessary to use absolutely all past data, not only for some past period. To model the future dynamics of this share price for the period 2010-2021, it is not enough data for the previous 10 years.
In the open access it was quickly possible to find data on the dynamics of AT&T stock price since 1984.
On the interval (1984, 2010) the graph will look as follows.
On the interval (1984, 2000) in the fractal structure of the chart, a fractal, which is marked in green, was formed. The 1st segment of the green fractal is marked purple, while the 3rd segment is marked pink.
The green fractal ended the uptrend and was followed by the fall of the price within the framework of formation of a new fractal, which is directed in the opposite direction to the green one.
On the interval (2000, 2005) a fractal was formed in the fractal structure of the chart, which is marked in blue. The 3rd segment of this blue fractal is marked in orange.
Since the end of the blue fractal the downtrend has ended and an upward price movement has followed within the framework of a new fractal, which points in the opposite direction to the blue fractal.
As at the end of 2010 we may assume that the 1st and 2nd fractal segments marked in red or the 1st and 2nd fractal segment marked in green were formed.
In other words, the future dynamics of quotations could follow two scenarios. The 1st scenario assumed the continuation of the decrease within the framework of the formation of the 3rd fractal segment, which is marked in red. The 2nd scenario assumed the upward dynamics within the formation of the 3rd fractal segment which is marked in green.
The subsequent price movement demonstrated that the 2nd scenario was true, which resulted in forming the 2nd segment of the red fractal, which is a fractal marked green, as well as the 3rd segment of the red fractal, which is a blue fractal.
With a high probability the dynamics of AT&T stock quotes will be in a global downtrend.
Now on the chart the formation of a fractal, which is marked in pink, or rather its completion. After the 3rd segment of the pink fractal is completed, the 2nd segment of the fractal, which is marked in blue, will probably be completed. This blue fractal will be the 2nd segment of a higher-order fractal, which is shown in olive on the chart. The 1st segment of the olive fractal is marked in red. Thus, after the decline in quotations to 19.50 with the subsequent rise to 32.50, the dynamics of stock quotations will be in a global downtrend within the formation of the 3rd segment of the fractal, which is marked in olive colour.
A private question came up, part of the answer to which I want to make public.
One of the people who read the article asked for data on AT&T stock price performance, which shows a complete lack of correlation with the performance of the indices...
What indices?
And on the given AT&T charts of course there is no time axis...
Yes, if you make predictions like "either rise or fall", then of course "it is safe to say that a chart of the value of any financial asset carries, in addition to information about past performance, also information about its future performance" (c).
These images are all you need to know about the supporters of the wave-guide sect. And this picture can be redrawn every day, leaving the forecast the same - either rise or fall...
Yes, if you make predictions like "either rise or fall", then of course "it is safe to say that a chart of the value of any financial asset carries, in addition to information about past performance, also information about its future performance" (c).
These images are all you need to know about the supporters of the wave-guide sect. And this picture can be redrawn every day, leaving the forecast the same - either rise or fall...
Did you make any 💯 dollars from your predictions?
Yes
Fractal analysis should begin with the analysis of a chart constructed with a timeframe of at least one year.
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In the pictures above it was shown that the dynamics of AT&T will take place within the formation of a fractal, which is indicated by the olive colour. The AT&T chart above is plotted with a time frame of 4 months, meaning one Japanese candle represents an interval of 4 months and three candles represent 1 year.
To understand why the future dynamics of the Dow Jones index in the next 3-5 years will be downward, we need to analyze the fractal structure of the chart which is built taking into account all historical data.