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Making A Living, by Victor Niederhoffer
Occasionally at a discussion with the colleagues here, someone will propose a field of inquiry, and the comment will be made "some good research on that could make a good living for someone". This is one of the only fields that study and hard work, and a bit of enumeration, and organization can start a person down the road to a career. There are numerous areas that come to mind. For example, a field of inquiry based on the overnight moves in the various Asian, USA, and European stock markets as a predictor of what's going to happen in the USA. An "Adam Robinson" theoretical approach, might be very good here. Another field of inquiry that could provide numerous employment and wealth enhancement opportunity would be a study of the prices of a commodity over, say, the last 20 days. What is the highest exact price that has been hit over such a period? For example, 1195 rite now in SP futures. What is the lowest price that has been hit? Let us say 1170. Where we are now 1190--we are 80% of the range of 25 above the low and 20% of the range below the high. That's a good thing to study as a predictor I would hypothesize.
John Bollinger reacts:
Yikes! Can it be? H*ll must have frozen over. The chair become a card carrying technician!!! What will be next, MTA membership? The % position in a 20-day range is exactly equal to a 20-day raw Stochastic. It is also the inverse of William's %R. These are time-honored technical tools designed to forecast commodity prices. Time to get up and do the Eagle Rock up and down a aisles--no music required. Holy Guacamole!
Victor Niederhoffer counters:
Yes, indeed, the chair is very naive, but perhaps someone wishing to make a living mite start back testing how the durations from the highs and lows, and the position within the range classified by percentile and recent move mite shape subsequent distributions of price changes for fixed intervals relative to time, and subsequent price moves---- all, of course, as a function of the previous running history of such distributions. If nothing of value turns up, it's an encompassing system like market profiles et al that could foster a series of seminars around the world, books, and newsletters, and money management services (placed of course in a fund of funds to reduce risk). And, that's just for openers.
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