{"id":2088084,"date":"2018-10-03T11:25:17","date_gmt":"2018-10-03T05:55:17","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=2088084"},"modified":"2018-10-03T11:25:17","modified_gmt":"2018-10-03T05:55:17","slug":"buying-at-highs-and-lows-thinking-in-probabilities","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2018\/10\/03\/buying-at-highs-and-lows-thinking-in-probabilities\/","title":{"rendered":"Buying at highs and lows: Thinking in Probabilities"},"content":{"rendered":"

Mining past returns of the MIDCAP 100 index, if you invested for 50 days, the probability of returns greater than 10% is 32% and the probability of returns greater than 15% is 18%. On the flip side, over the same holding period (HP,) the probability of returns lesser than 0% is 35% and the probability of returns lesser than 5% is 52%. These data points are the first row of the following tables:<\/p>\n

\n
\n\"MIDCAP<\/a>\n<\/div>\n
\n\"MIDCAP<\/a>\n<\/div>\n<\/div>\n

Suppose you want to hold for 50 days, then to maximize your returns, you will have to buy at the 500-day low to have an even shot at making a return greater than 10%. The better outcome would be if the holding period were to be extended to 200 days. At which point the probability of even making less than 5% is very low and that of making more than 15% is more than 80%.<\/p>\n

Using this table, one can lookup the odds of different holding period returns at different highs and lows.<\/p>\n

Code is on github<\/a>.
\nRelated: Highs and Lows<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Mining past returns of the MIDCAP 100 index, if you invested for 50 days, the probability of returns greater than 10% is 32% and the probability of returns greater than 15% is 18%. On the flip side, over the same holding period (HP,) the probability of returns lesser than 0% is 35% and the probability … <\/p>\n","protected":false},"author":2,"featured_media":2087813,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3471],"tags":[960],"class_list":["post-2088084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing-insight","tag-returns","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2088084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=2088084"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2088084\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media\/2087813"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=2088084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=2088084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=2088084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}