Probability Distribution, Statistics - Algorithmic Trading

We will discuss how to get trade ideas from a simple probabilikty distribution curve with Apple stock (AAPL) as an example.
The full trading view pinescript code can be found in the link below:

[felipemiraflores]

This video has opened my eyes when it comes to trading with simple and effective strategies based on probability. Amazing video!!!!

[honzinuvsvet]

This is exactly why I´m trying to focus on ´´facts´´ about market- volume, vwap, stand. deviation also support resistance. Loving your videos!

[joewarren]

You are an awesome technician. I love the Stan Weinstein code you provided and have created TOS screens to identify potential trades based on 30 weeks and 50 days both providing many trade possibilities. Thank you.

[dontbeafool]

good video. you should have a look at meta labling.

basically, you keep your strategy but you take other metrics like volatility, skewness, autucorrelation, etc. you use them with your backrest results to build a classifier(any ml model) on top of your strategy so that your model can prevent trade execution if it knows with enough certainty it wont be profitable. it eliminates a lot of drawdown

[flashrun]

One can store in code, the value for the variable percentage. In Pine Script, just use a switch for any security desired.

[brandonjohnson]

The extreme levels also show that the returns are not normal. The distribution is also heavier on the negative side. I believe stock returns are distributed with the Cauchy.

Try this: calculate the probability under normal assumption that you get a 5% decline. Then compare that with the probability you get from the data. In reality, the data will show a higher probability

[FastbreaKHere]

In the past Ive tried to model the stock daily returns with the normal distr. but everytime I had a p_value test with very small values (less than 0.001), whereas I got good results with the student T distribution.

[iinself]

thanks for the video. can you please explain how is this different from Bollinger bands?

[eddiemurphie]

This is a long shot ask, will u please teach me !

[BoxerDogs]

At 1:46, what are the values on the Y-axis and what are the units? What is the Y-axis telling you?

[georgekuh]

Can you suggest a book for statistical analysis

[matejfrnka]

Hi, what is the app you are using for displaying the stock chart called?

[ralphpatterson]

Thanks for the video. While I don't mind being on a mailing list if it is informational in nature, but I would appreciate a more direct link to the code you used. The only code available (from the link in the response email) is to the random seed. It would be nice to have the entire Juniper notebook to work with. If I'm missing something please correct me.

[pragneshmistry]

Sir, the data for the period u have downloaded is normally distributed, so this can apply. But for the same stock if we change the period, the said stock data may not normally distributed, where we may not apply this… please help me

[talentinvein]

this look like 80-20 principle. here 68

[navketan]

Sir, Assuming forex pair prices are random--how often do you think currency reaches past value of daily ADR from opening price(5PM EST) on one given day either up or down--if percentages are low, then trader can make money by just limit orders put in at start of every day(win/lose).Put(for example) buy orders 80%(of ADR) below EOD(end of day)price & stop loss past distance where pair is unlikely to reach most of the times. At the end of day cancel unfilled orders & new orders are entered according to new EOD prices.Vice versa for sell orders.Stop loss reversal order is at where market is unlikely to go most of the times.Seek your wisdom.

[Conork]

Do you know if there's an easy way to make the Normal Distribution for stocks via a website or app?

[stevenaohio]

I only see 8 lines of code in the link provided in email. Can you provide more detailed or logic of your pine script for code?

[RuDyyx]

One thing, financial markets don't follow normal distribution.

[abcnikhiltripathi]

It looks like your backtest result (1182%) gain doesn't beat the "buy and hold" returns (1700%) between Dec 2009 to Dec 2020.