this takes me back a few years, when I went through a similar "start from first principles" approach.
if market is UP: options are:
1: it could continue going UP.
2: it could switch to sideways.
3: it could start going down.
(similarly for other starting points)
problem is what degree of movement that represents a change in condition. therein lies the headache.
Thanks a lot, i list out all possible scenario
if market is UP: options are:
1: it could continue going UP.
2: it could switch to sideways.
3: it could start going down.
if market is Down: options are:
1: it could continue going Down.
2: it could switch to sideways.
3: it could start going up.
if market is Sideways: options are:
1: it could continue going Sideways.
2: it could switch to up.
3: it could start going down.
hmm.. now i wondered have anyone ever try to calculate the possibility.. give example so that members could project which way market would go..