Chaos Theory Stock Trading Examples

Three tickers I'm playing now, each is showing
self organization or edge of chaos behavior.

The more volatile a stock, the more money one
can make. However, most equate volatility with
risk and unpredictability. But there is a specific dynamic
state where volatility and predictability converge
to simultaneous maximums....which is at
.....the edge of chaos.

http://www.calresco.org/sos/sosfaq.htm#3.3

This dynamic state is essentially bird-flocking.
So any trading decisions must be made on the fly.
You know what bird flocks do, they make sudden
and sharp changes in direction. So one must
simply watch and wait for the trend reversal
to buy or sell appropriately. For the truly newbee
you buy ...low...and sell...high. g

Never forget that, jumping on the bandwagon
means bagholder.

In all of these stocks I have no idea what they will
do next, but self-organized systems always do
something interesting....something dramatic.
This serves as a basis for a stock trading
strategy. Bursts of transient behavior initiated
by outside forces....these patterns are thunderstorms
they build...they organize ...they dissipate.
When organized they are the most predictable of
all, they are the most volatile of all.
They are perfect.

bits

Last week I returned 45% on investment playing
ticker bits. The party is almost over, but I feel
it has a day or two left so I bought back in late Friday
at $4.22. I expect it to trend up at the opening
bell and will sell at the first trend reversal.
If it opens down I'll sell immediately and buy back
at the bottom. Look at the five or ten day chart, it's
a beautiful thing. https://us.etrade.com/e/t/home

biom

I haven't a clue whether biom will drop or fall
at the bell, but it should be dramatic either way.
If it drops, which seems likely, I'll buy when the
flock turns back up. I'm hoping bits opens up
till lunch time, while biom drops till lunch time.
So I can sell bits and buy biom about the same
time. In any event I should be able to adapt
to any circumstance and make it a nice day.


enmd

I haven't a clue when enmd will take off. But the
pattern shows something is going on behind
the scene, plus the vp on friday bought 50k shares.
It's likely to be several weeks before anything
happens...who knows. But this is the stock I'll
place my kitty into when not playing stocks
like the two above. With the idea when the
'something interesting' finally happens, I'll happen
to own stock.


I stay busy at work, and have to use a cell phone
for day trading, which is a huge handicap. Yet
I can do 10% a week, every week, using the
concepts of the chaos and complexity sciences.

Far from equilibrium is where it's at.

You classically trained folks like equilibrium
states to allow repeatability and predictability.
There is a new way, a way where the system
specific details become irrelevant. All I really
know about these stocks is that two are
biotechs and one makes a browser. Not
sure which is which...doesn't matter.

At the edge, all the info needed resides in the
charts. Such company details only serve
to cloud judgment...to introduce error.

The less 'detail' one knows the better.

Maximum price change, maximum predictability
minimum research and time to profit when
at the edge of chaos. Perfect!

You doubters about my rants on Meridiani now
have a tangible way to see whether the concepts
I use are valid or nonsense.


Jonathan



Forward Looking Statements (my favorite kind)

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forward-looking statements within the meaning of the Private Securities
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Forward-looking statements are typically identified by words or phrases
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or future or conditional verbs such as "will," "would," "should," "could,"
"might," "can," "may," or similar expressions. Forward-looking
statements are subject to numerous assumptions, risks and uncertainties,
which change over time. Forward-looking statements speak only as of
the date they are made, and I assumes no duty to update forward-looking
statements. Actual results could differ materially from those currently
anticipated due to a number of factors."


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