The farther we move from the average, chances of occurrence go down. This is what Taleb sahab calls Tail risk, because it lies in the tail of the standard distribution curve.
Bringing Data Science to Nifty Analysis. A small ЁЯз╡
As per Normal Distribution 68% of the time movement is with 1% SD Limits.
For 95% pf the times movement is within 2% SD limits.
And its only 0.3% of the times that movement exceeds 3 SD.
The farther we move from the average, chances of occurrence go down. This is what Taleb sahab calls Tail risk, because it lies in the tail of the standard distribution curve.
https://t.co/HHwUpIXTRG
The Galton Machine shows order from randomness. Each ball bounces left or right at random, 12 times, but together where they fall can be predicted - the normal distribution. This one made by: https://t.co/oI9wOGq7nG pic.twitter.com/VQtVu66OSE
— Tom Stafford (@tomstafford) April 19, 2018
When we say that price is at upper/lower Bollinger band, we are saying that it has reached 2 SD limits and likely to reverse.
First with default setting and in second change settings to 3 standard deviation.
Crossing 3 SD boundary means that Nifty is now in very rare territory where it has been only 0.3%
More from Professor
Objective Methods to Exit/Book Profit:
1. Darvas Box System
2. ATR based trailing
3. PSAR based trailing
4. EMA Crossover based trailing
1. Darvas Box System
2. ATR based trailing
3. PSAR based trailing
4. EMA Crossover based trailing
Okay sir but dusre konse method se exit ya profit book kar sakte hai sir sry apako bohot pareshan kar raha hu but sry sir
— learner \u2600\ufe0f\u2600\ufe0f (@darvaxfan1845) March 12, 2022