Over longer term, stock prices might be more predictable in terms of probability, because there are often trends that last for months or years. But the shorter the period you look at, the harder it is to predict.
When you calculate probability, then you basically get an average chance of something happening in the future, based on what happened in the past. But this average is useful only when you have low standard deviation in your past results, and your sample of past results is big enough to be representative of what usually happens.
If the standard deviation of your past results is bigger than the price range you are trying to predict, then your prediction is very unreliable, not much better than simply guessing. And if you select a period of past results with low standard deviation, but these results aren't representative of what usually happens, then your prediction isn't better than chance either.
I would like to know how to calculate the Probability % of a stock moving from $100 to $97 in 4 days (holding period)?
Or, if I had a $94 Stop Loss price (instead of $97), what would be the Probability % of Price moving from $100 to $94? in 4 days be?
IF:
a) the Daily average range is $3 (for both scenarios above).
What would be the probability % of this happening? In other words, I'm trying to calculate the likelihood my $97, or my $94 Stop Loss price, would be hit in 4 days.
Is this doable, with the aforementioned information?
Thank you for taking the time to help me out. Much appreciated.
