Let's try to develop a mathematical formula to predict whether a coin tossed will be heads or tails. We all know that there is a 50/50 chance of either heads or tails. It doesn't matter what the last coin toss was, the next toss still has a 50/50 chance. No matter what has happened in all the past tosses the next toss will still be a 50/50 chance. Since there is always a 50/50 chance of heads or tails, there is no way to predict the next toss. That is RANDOM. Now let's look at the market. It has been determined that the market is RANDOM. Therefore there is a 50/50 chance that the market will move up or down the next period (5 minute/hour/day/month - whatever period you trade). Just like the coin toss, there is no way to predict, with a mathematical formula, or combination of many formulae, what the next market move will be. Ah, you say, what about some breaking news! That's where the EFFICIENT market comes into play. Since the market has been determined to be very EFFICIENT, all adjustments happen very quickly. It is very unlikely that you, me, or anyone not directly connected with one of the big boards, can capitalize before the market has adjusted. What about all the schools and websites that will train a person to time the market? The bottom line here is this - THE ONLY MONEY THEY MAKE IN THE MARKET IS SUCKERING YOU INTO SPENDING IT WITH THEM!!!! | ||
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