Loading ...weight of evidence analysis
If it looks like a duck.. quacks like a duck.. must be a duck? Right?!
When trying to “right”.. . there is no such thing in the trading world.. as charts morph… you only really see the whole duck, after it has been shot and layed on your thanksgiving supper table!
What I learnt from doing Stan Weinstein’s book “secrets for profiting in bull and bear markets” is the concept of “weight of evidence”. Your goal is to increase probabilities of reaching your targets.. by reducing false signals and whipsaws.
Anyhow, here was my breakthrough review of the gold bull case back in late June 2019. And already, might now need a re-haul!
and weight of evidence is precisely how we forecast the weather (my day job). It’s referred to as ensemble forecasting. You gather all the evidence and observations about what is happening right now, this minute – feed that data into some very clever supercomputers and let them run EVERY possible future possibility. The end result is either that they all point in roughly the same direction (high confidence forecast), they all point in different directions (zero confidence forecast), or (more often) somewhere in between, with a large proportion going one way, and a small proportion going another way. That doesn’t mean the low probability forecast won’t happen (unlikely things happen all the time), but it does mean that there is a greater probability that the forecast will go the way that most of the models suggested. It’s basically gambling, with the odds stacked in your favour (if you do it right).
Indeed, great tool set for trading! Now imagine a trader without “weight of evidence” forecasting weather? Scary!
That would be one way to lose money fast.
Excellent Weinstein Analysis and Presentation
Glad to have you in the tent Patrick
Thanks! Really appreciate it.
Nice work Patrick, very much appreciated!