This graph shows a phenomenon called BTC dominance.. The way BTC graph moves (mid top) will decide the way all other move making a similar pattern during fall but during rise they may not match so precisely though the effect remain in that too, only a few rarely at different time point show variation from this and there is mostly any external factor causing that variations.
So if we consider all as course of intervention of various drugs eg. Anti-Hypertensive agents, the graph at center too which will be having dominance over all interventions effect will be "Lifestyle Intervention/modification"..
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The composite man , equivalent of big pharma in stock market (composite man is not necessarily bad or against a trader, its just another player with you in the market, playing for his/her own profit).. Luckily stock market have ways to understand it's game play, same as we have EBM combined with critical appraisal for understanding the real effect/benefit.
"Wyckoff created the idea of the Composite Man (or Composite Operator) as an imaginary identity of the market. He proposed that investors and traders should study the stock market as if a single entity was controlling it. This would make it easier for them to go along the market trends. In essence, the Composite Man represents the biggest players (market makers), such as wealthy individuals and institutional investors. It always acts in his own best interest to ensure he can buy low and sell high. The Composite Man’s behavior is the opposite of the majority of retail investors, which Wyckoff often observed losing money. But according to Wyckoff, the Composite Man uses a somewhat predictable strategy, from which investors can learn from." https://academy.binance.com/en/articles/the-wyckoff-method-explained
It's very interesting to notice that if someone focuses on very few stocks which have good fundamentals, they may make small but consistent profit, it's like the experienced doctor analogy who uses very few drugs for wide range of disease and still seen successful. Are they really successful? Or they are keeping safe way (for the patient) by giving small but sure profit than giving sometimes high gains and sometimes high losses.. In terms of investing they are successful as an important mantra is "never loose money", and same way in medicine too that "do no harm". When we become greedy wanting best possible there is scope of high benefit but high loss too..
Btw be it identifying wykoff method on a chart 📊 or critical appraisal for drug effects.. "We only see what we know"..
RB - 👏you are opening a new way of looking at medicine and it is just at the right place at the right time
Avi - Thanks sir!🙏
RB- Entering covid ICU and thinking of the stock options in the humans lying in front of me. The market stakes have come down since last two weeks with less people crashing (during the peak of 2nd phase of covid in India when delta variant created havoc.)
RB - Govt policy driven interventions (lockdown effect) to bring the market stakes down? 🤔
Avi - Better to say Swiss cheese model impact where govt. Is one among many factors.
RB - Integrative interventions 👏
RB - But what would be the analogy in terms of stock share trading?
Avi - As you are looking at population level, the analogy will also come at population level data and that is nifty / nifty 50 / sensex etc. Which are affected by overall effect on all stocks considered under these and also on how the market performs globally I.e. Dow, sgx (other countries) etc.
And the event at population level is a rare event of surge of cases of a particular disease in your facility and same seen globally and that may be analogous to a black Swan event... A black Swan event is a rare event that can not be predicted (a few say it can be sometimes) and they may lead to crash of a market , local / global and even at a smaller subset of local like your facility..but these rare events may happen in case of individual stocks or humans journey also eg. Mucoromycosis (not black swan technically in such case, just the system is an individual level).
"A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight." https://www.investopedia.com/articles/trading/11/black-swan-events-investing.asp
The covid pandemic may be a good example of black Swan event but not all Swiss cheese model failure based event may be black Swan.. Because black swans are rare events where are swiss cheese model also applies on common events eg. All Medical errors (they are very common)
One cool thing is, after the black Swan event happen and we analyse data in backdate it's easily possible to notice, but never possible to predict in future. Same happening in covid case hypes.. We easily point to crowded gathering events etc which lead to superspreader events..
The equivalent to medical errors in stocks can be, not analysing the data enough or well or not doing that with sufficient speed for decision making, not applying safety measures eg. Diversification, hedging, stop loss etc.. Not keeping personal psychology in control and away from bias, greed, fear.. And also the biases that are inbuilt in the analysis methods.
Sometimes it becomes important to break a few rules, sometimes being greedy may become useful.. Also misusing the safety Strategies are also a danger as putting stop losses too tight or too far, over diversifying etc.
So right thing at right time in right quantity is important.. It's tough to be so right always so we loose alot in stock market... But if win rate is higher than loose rate by even 1% or exactly same then it's success because in first case there is some profit and in second there is no loss so profit may be in future.. But in Medicine we hide failures, they are not accepted easily as errors and so everyone only know success stories but nobody knows success rates..
Interestingly in stocks if win rate is very less compared to loose rate but just keep check to keep loss sizes small and win sizes bigger then also its a profit overall.
RB - 👏 A large part of the literature in stock trade borrows from statistical theory. Good insights building up with this analogy 👏
Avi - [11:00 AM, 5/31/2021] Avinash Kumar Gupta: Yes sir. The winner and looser both apply stats and they both think they are right and it's even possible that the looser have better technology than the winner but when we see ratio, the lowest resource settings have win rate of approx 2% and rest 98% are small fishes to be eaten by the bigger ones, those having high resources.
Various strategies and instruments are there in stocks and using some are very safe but low profit, some very risky but high profit and some in between and the resources required vary for them.. One aspect of such resources is capital -> For a good safety and good profit strategy the capital required is huge, for a high profit high risk the capital needed can be smallest size also but they wins may be very very less..
Having high resources brings different set of challenges that may never occur in case of small resource setups (retail investors) so not having high resources as mainly enough capital is a challenge but then more/ better skills, analytical capabilities, speed , etc comes into picture.. Procedural skills which are again learnt by doing both theory and practice.
