Tuesday, April 1, 2014

Normal Bell distribution chart



The key challenge for most if not all traders and investors is to develop or find a reliable and profitable system. The myriad stock market theories readily available is NOT perfect because there will be period(s) that will not be reliable and not profitable. 

It is better to develop a system that extracts the strengths of different theories and formulate a new approach that suits your risk profile.

A perfect system will be able to help you ride the trend and provides market bearing within a trend. One should go back to the basic the purpose or intent of chart analysis. 

Is the intent of chart analysis to determine BUY/SELL or determine market bearing or position? 

Yes, I was mislead to believe using chart to find BUY and SELL! From the start to ending of a trend, there are many BUY/SELL signals. Between the start to the end of the trend, visually we can see most of the time is not at the beginning or the end but rather “in-between” full of volatilities. It is how we manage these volatilities and profiting from the “in-between” matters.

The normal bell distribution chart above shows only a small portion of the time trend is at the peak or bottom! Most of the time is “in-between”. How and where are you going to focus your effort and resources managing your position(s)?   

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