The sequence given by Phil is not a fib sequence so your analogy is out of context. Fib sequence is a continued fraction (1+1/(1+1/(1+1/1+…..)), and we can derive to a number by manipulating it in various ways.

You have used three numbers (1,2,3) of the fib sequence used in the given series to derive to 10; however, we can also derive to a combination of numbers from this set by using the ordered pairs of subsets, or we can also use the unordered pairs of subsets in a Cartesian Plain to derive to various results. Hence, simply declaring the result as 10 must be overlooked.

So, i still stand with my first comment here.

Thanks

Truth be told, I was expecting something more profound and insightful but what you say Phil is absolutely spot on and I think herein lies a valuable lesson for all, traders or not.

Its no surprise that the market has its own set of rules (that noone really knows) but it our responsibility to create a solid trading plan based on, as you say, a logical set of assumptions with a tested and expected favourable outcome based on probability. In other words, for something to work its gotta be tried and tested with certain assumptions and rules to ensure that the outcome is favourable and consistent.

Thanks Phil for a really interesting and thought provoking exercise.

I can answer your last question with absolute certainty, unlike the previous one, - No! But this will be my next mission - to generate a trading plan and test it.

Ameya

Just saying the answer is ‘10′ is as illogical as saying the answer is Orange Juice. Because the question is a open ended sequence, so you can make up any type of recurrence sequence from there or you can guess whatever you would like. Hence, i strongly disagree with your answer.

Alternatively, it would make sense given a sequence like this:
1,2,3,4,?,6,7,8,9,30,……..

So, i would say, your question and answer does not really make proper sense.

Hope, i made my point.

Thank you.