On the unequal probability of a price move up or down - page 27
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Dear @danminin, you are mistaken. I gave you the correct ratios at the beginning of the thread and explained their physical meaning. Equal - profits and losses, from upward and downward moves, just like that and not otherwise. In your model, a movement from an initial level of EURUSD = 1 "up" by 1, i.e. by 10,000 pips equal to 0.0001, would result in a profit of 10,000 "dollar pips", in my terms (in the sense that the quoted currency is the dollar). A move down from the initial level 1 "down" by 5000 "pips" of the value 0.0001 will cause a loss of 5000 "dollar pips". Further it is very important to understand what changed that caused the rate change. Let's consider a hypothetical situation where the euro (numerator of this EUR/USD pair) did not change at all, and all changes were caused only by changes of the denominator (USD). In such a scenario, the dollar at the final exchange rate EURUSD = 2 (that is USDEUR = 0.5) and the dollar at the final rate EURUSD = 0.5 (that is USDEUR = 2) differ in value by 4 (!) times (in the first case 10 000 profit, in the second case 5000 points loss, but a point value in the first case is 4 (!) times less). In fact, in this scenario of constancy EUR in the first case the profit is 10000*0,25 = 2500 parrots, and in the second case the loss is 5000*1 = 5000 parrots, because 5000 and 2500 parrots are not equal, their probability is never equal (thus, I showed the fallacy of your reasoning "on fingers", so it is incorrect in general). Consider other scenarios on your own, for example the other extreme case where the EURUSD change is only caused by the EUR. Re-read the beginning of the thread again, the general relationships are given there.
What do the profits have to do with it?
We are talking about the phenomenon that with the same probabilities of upward and downward price movements, the profits will be different.
Or paraphrasing: with equal profits, the probability of movement will be different.
the probability that the euro will become twice as expensive as the dollar is the same as the probability that the dollar will become twice as expensive as the euro.
eur/usd is what? it's a ratio.
What is the sign between the euro and the dollar?
Ratio means how many times the first number is higher than the second.
Why even look at the points on the scale?
eurodollar is worth 1.0000
what is the probability that the eurodollar price will go up by 9999 points to 1.9999?
and what is the probability that the eurodollar price will fall by 9999 points? to a price of 0.0001?
do you think the probability is the same?
the probability of the euro becoming twice as expensive as the dollar is the same as the probability of the euro becoming10,000 times cheaper than the dollar? it would take a euro economy to shrink 10,000 times. or for euros to print 10,000 times the current amount of euros.
what is the probability of the euro increasing by 20,000 points?
and what is the probability of the euro decreasing by 20,000 points?
it will be worth -1.0000? there is no way that could happen.
you also need to look at the currency that is second in the currency pair.
If eur/usd becomes 2, that means usd/eur becomes 0.5.
if eur/usd became 0.5, it means usd/eur became worth 2.
is that how much the ruble has fallen since its launch date?
was worth $0.33, now it is worth $0.017.
it has fallen in value by a factor of 20.
Consider the opposite exchange rate. the dollar/ruble exchange rate. the dollar was worth 3 roubles, now it is worth 60 roubles. it has risen20-fold.
Two times two four, two times two four
It's common knowledge all over the world....)))
Two times two four, two times two four
It's common knowledge all over the world....)))
was there something you wanted to say?
what do profits have to do with it?
did you have something to say?
No, just joking).
I don't feel like writing much from my phone.
You take a shuttle to the factory?
There's no desire to write much from the phone. I'll answer briefly: they are the only ones that matter. I have explained everything in detail, if you want, you can reread it, if not, you will remain in a fantasy world. Especially, the arguments that currencies are equal to the relationship of the economy (type of change in the euro by 1000 times must reduce the economy by 1000 times) - it is to the psychiatrist, because the reality of these fantasies has nothing to do, really ))))
well you are the one who thinks that the probability of the eurodollar rising by 9999 points is the same as the probability of it falling by 9999 points.
in other words, the probability of the eurodollar rising by a factor of 2 is the same as the probability of the eurodollar falling by a factor of 10,000.
like in order for the euro to change 1,000 times, the economy has to shrink 1,000 times
great economist?
The change in the exchange rate depends on the change in exports/imports of the country, and the change in exports/imports of the country depends on the growth/decline of the economy.
And actually that's not the main point of that post. you got caught up in a secondary phrase.
I don't feel like writing much from my phone. I will answer briefly: they are the only ones that matter. I have explained everything in detail, if you want, you can reread it, if not, you will remain in a fantasy world. Especially, the arguments that currencies are equal to the relationship of the economy (type of change in the euro by 1000 times must reduce the economy by 1000 times) - it is to the psychiatrist, because the reality of these fantasies has nothing to do, really ))))
If you can't understand what I wrote there, you should rather see a doctor.
Dude, you're showing us martingale here?
You've revealed the little secrets of this weird trading)
Currency changes depend on changes in a country's exports/imports, and changes in a country's exports/imports depend on growth/decline in the economy.
and that's not the main point of that post. you're catching on to a secondary phrase.
No, of course not. Everything is speculative, there would be no emissions if it depended on "exports/imports".
Started to test my revised indicator. The first small profit.
Started to test my revised indicator. First small profit.