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One Response
Hello Dan,
I agree that the data is useful, particularly if you have a boring weekend planned. Maybe the mother-in-law is visiting or something similar.
To kill the boredom the trader could use the data to prepare a scatter diagram documenting each trade in a visual display.
Then, using a calculator, the trader could calculate the mean and standard deviation of the data population. That way, outliers in the data set can be detected.
Normally, a good statistician would deal with the outlier based on the authenticity of the data point.
However, in trading, large profits only arise when the markets either overreact or underreact to new information creating a temporary price distortion. These price fluctuations then subside, and price gradually moves back towards the historical average (or mean).
For this reason, the traders scatter diagram would be an extremely useful tool when planning holidays and day trips so as to not fall victim of the “Sports Illustrated jinx”.