Thursday, December 3, 2015

(in charting) Questions

Questions, in charting, are a way of approaching the recording of observations. Observations are of two types: hypothetical, and predictive.

In the first part, we form an hypothesis based on a pattern in the history. We might say, studying a chart, "there was a head and shoulders pattern following on a decline, and then prices rallied half way to the earlier high price." This suggests the (simplified) hypothesis to test.

In the case of predictive observations, we are saying a slightly different thing. "It's a head and shoulders pattern following a decline ... I think it will rally to half way to the earlier top."

We can now present this as a question. It seems to offer our minds more flexibility. We can ask questions like "Isn't this going to rally now? What will it do when it reaches the level of the this earlier top? Turn back, or go right through it. If I order it at today's high, will the order be filled?" Stuff like that.

It's an abstract idea, but now I can label posts "questions" and know those posts pose questions that have not yet been answered, and, when the questions have been answered, I can relabel the posts "answers" and know that those posts answer questions. We'll see how it goes.

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