Odds of Picking the Stock Market

In this thread ....

http://www.internationalskeptics.com...d.php?t=293559

The O.P. has suggested that the odds of picking the market six times out of ten in a given time period is one in a billion.

I disagree and think that, depending on how you model it, it could be around 19% if we treat each completed trade as a coin toss. We could attempt to analyse if further and see how effective each close was - if it missed the peak or trough then was that really the right thing to do ? - but quite frankly I cannot be bothered.

The one in a billion calculation is obtained this way:

Quote:

Originally Posted by Samson (Post 10874662) Did you see post 1626? http://www.internationalskeptics.com...postcount=1626 I took an average of the (inthe money) amounts, b, and an average of (out of the money amounts), a, divided a by b and multiplied to the eleventh power to get a whole lot of zeros. Now if my math(s) is wrong, prove it.

Which makes no sense to me mathematically, but then again I'm not a great mathematician. The equation provided would mean that a series of modest losses followed by a decent sized gain (but not enough to offset the losses), my post on the matter.

Quote:

Originally Posted by The Don (Post 10874726) I know that's your maths (or more specifically how you calculate it) but it doesn't make mathematical sense as a way of calculating the probability. If for no other reason, the way you calculate it, if you got it wrong 9 times with a loss of 1 each time and correct once with a gain of 8 you'd calculate the odds at 8.5 billion to 1 and still be a net loser :rolleyes: <snip>

Could someone with knowledge of statistical modelling comment on whether the first approach even makes sense ?

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