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Money management, risk management and position-sizing are TA indicators,
with the method of calculation being the only difference from
traditional TA indicators. And if they're only psychological cushions
to help us trust our technical indicators when they move randomly, what
does that say about a TA indicator when price moves randomly?:)
Luck,
Sebastian
--- In amibroker@xxxxxxxxxxxxxxx, "brpnw1" <tradermail@xxx> wrote:
>
> IMO, "money management, risk management and position-sizing" are all
> methods developed to help an individual combat the natural human
> tendency to act contrary to these methods. They are merely
> psychological cushions that serve to help us trust our own technical
> indicators when they take the random dip that they often take. The
> indicators are correct. At least, mine are... but it took 6 solid
> years of observational, visual testing to determine which ones to
> use, and none of this testing ultimately depended on optimization or
> backtesting.
>
> ~Bman
>
> --- In amibroker@xxxxxxxxxxxxxxx, "sebastiandanconia"
> sebastiandanconia@ wrote:
> >
> > I'm seeing interesting backtest results related to this.
> >
> > What I did was take a group of stocks (that I had pre-screened for
> > certain minimum RS and fundamental criteria) and allocate them
> into 2
> > sets of portfolios of six stocks each. In one set of portfolios I
> used
> > ranking based on RS and fundamentals to allocate stocks (top 6 in
> rank
> > went into Portfolio 1, second 6 into Portfolio 2, etc.). In the
> second
> > set of portfolios I allocated randomly using alphabetical order
> (first 6
> > stocks in alphabetical order went into Portfolio 1, second 6 into
> > Portfolio 2, etc.).
> >
> > Intuitively, the portfolios based on rank should have been better
> > performers but it didn't seem to matter. I think that there's
> simply a
> > certain unavoidable amount of randomness about the way stocks will
> > behave that can't be accurately forecast, no matter how detailed
> the
> > pre-analysis is.
> >
> > That would explain why so many mutual fund managers with enormous
> > resources of fundamental and economic data, computing power, etc.,
> can't
> > beat an unmanaged SP500 Index fund. It also lends credence to the
> idea
> > that consistently superior performance comes from the things over
> which
> > investors have direct control, like money management, risk
> management
> > and position-sizing.
> >
> >
> > S.
> >
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "Tom Tom" <michel_b_g@> wrote:
> > >
> > > To go on dicussion about random walk, nice article at the middle
> of
> > this
> > > page :
> > >
> > > http://www.duke.edu/~rnau/411georw.htm
> > >
> > > Combine: Random Walk and Prediction.
> > > Technical analysis... usefull ? Financial information ...
> usefull ?
> > Even
> > > illegal information (hidden to public) .. usefull ? Last one
> maybe.
> > Others,
> > > humm....
> > > This is what about deals this article.
> > >
> > > For me, next theory could be a Chaotic Fractal Near-Random
> Walk... :
> > ))
> > > Chaotic : because spurious peak in the data wich can initiate
> further
> > > mouvment
> > > Fractal : year, month, day, hour, minute, sec... same patterns
> > > Near-Random Walk : Random Walk but predictable, because i don't
> think
> > price
> > > move randomly...
> > > If they move randomly... tehnical or fundamental analysis are
> useless,
> > so
> > > there is no mean to try to trade at all, (only to give
> commission to
> > the
> > > broker héhé).
> > >
> > > Seriously, from this article, what seems emerging from last
> years, is
> > that
> > > price is random walk, but volatility maybe not... It is well
> explained
> > in
> > > the article. Arch and Garch model are mentionned.
> > > Someone try this on AB ? Trade based only about volatility
> prediction
> > (so
> > > predict risk, and manage portfolio depending those prediction
> about
> > > volatility)... and so don't bother with the price random-walk ?
> > >
> > >
> > > Cheers,
> > > Mich
> > >
> > > _________________________________________________________________
> > > Les révélations de la starac 6 commentées par
Jérémy!
> > > http://starac2006.spaces.live.com/
> > >
> >
>
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