3 ms·
Right, whether or not 75% is suspicious depends entirely on the price action of the stock. If it has been trending up, there will be relatively fewer 3-month pe
by jallen_dot_dev 5y ago
Right, whether or not 75% is suspicious depends entirely on the price action of the stock. If it has been trending up, there will be relatively fewer 3-month periods where the stock is down than if it is flat or trending down. SFBS is up from 13.25 to 79.61 and CNBKA is up from 32.95 to 115.22 since 2014.
If the price movement was completely random with no bias up or down, and you entered trades at completely random times, then you would expect 50% of trades to be profitable 3 months later. So 50% is our baseline. Then consider that these stocks have been going up. THEN consider that you don't have to enter trades at completely random times; if you buy during a dip, the price merely needs to return to the mean for you to be up.