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<DIV>Walter,</DIV>
<DIV> </DIV>
<DIV>I finally got around to reading this article. Here's my
interpretation of it's content.</DIV>
<DIV> </DIV>
<DIV>The Equilateral quad refers to the condition equation for the inside bar
pattern. The conditional amount required to qualify the pattern is the
same "equi" amount inside of the high and the low from the previous
bar. That is where the 0.01 comes in. To qualify the inside bar must
be greater than 1% of the range inside the H & L.</DIV>
<DIV> </DIV>
<DIV>I don't understand what he is saying about trading over 100 different
patterns in many markets unless he's refering to someone with a huge account,
fast computers, and maybe some staff on shifts to trade 24 hrs/day. Since
the signals don't occur often, I guess a trader could be trading 33 commodities
on a monthly, weekly, daily, and intra day level. So that would be 33
scans each day, 33 scans at weeks end, and 33 scans at month end. To me trading
the same contract on 3 or 4 different time levels would be quite complex and
violate the KISS rule, even though his basic trading approach is simple and does
fit the rule "KISS". In other words the setup is complete
(inside bar), the condition is met (open higher (or lower) than the setup, act
and stick to the plan. Like beauty, KISS is in the mind of the
beholder.</DIV>
<DIV> </DIV>
<DIV>The attached chart was just a visual aid to me in trying to understand what
Mr. Downs was saying and to tie the signals in with the trade reports. My
chart flags the setup month whereas in the article the actual trade month is
flagged. Interesting. I'll have to test this further on different
commodities over several time frames on back adjusted contracts.</DIV>
<DIV> </DIV>
<DIV>Chuck</DIV>
<DIV>File att:</DIV>
<DIV> </DIV>
<DIV>
<DIV><FONT face=Arial size=2>-----Original Message-----<BR>From: Walter Lake
<wlake@xxxxxxxxx><BR>To: metastock
bulletin board <<A
href="mailto:metastock@xxxxxxxxxxxxx";>metastock@xxxxxxxxxxxxx</A>><BR>Date:
Monday, December 28, 1998 8:33 PM<BR>Subject: tactical
patterns<BR><BR></DIV></FONT>>I was looking at Mr. Downs' latest tactical
pattern in the January issue of<BR>>TASC. Does anyone know why this "two
bar pattern" is called an "Equilateral<BR>>quads
..."?<BR>><BR>>Why is the Range multiplied by such a small number
(0.01)?<BR>><BR>>Interesting that he says on page 40, that "... a
tactical short-term pattern<BR>>trader might be trading more than 100
different patterns over many markets.<BR>>..." That's a lot of scans,
100 different pattern scans just in one time<BR>>frame. Daily, weekly,
monthly .. gives you 300 scans to run! How many<BR>>patterns do you have to
research to get 100 "good" scans?<BR>><BR>>Does that violate his
4th strategic guideline on page 22 "Simplicity .. KISS<BR>>...",
etc.?<BR>><BR>>Is that the direction that trading is going? ... Brute
computer horsepower?<BR>>Multiple computers scanning different time frames
looking for personalities<BR>>of markets, tendencies, etc?<BR>><BR>>Dr.
Simons' article in the December Futures Magazine talks about how
the<BR>>changing markets have changed technical analysis. "The changes
in regimes<BR>>{i.e., night trading, electronic trading, etc.} altered the
frequency of<BR>>common signposts for technical analysis. The
"gap", ... has been a notable<BR>>casualty." (Note: this is a
serious article, not a casual,
"off-hand"<BR>>comment.)<BR>><BR>>Kaufman also noted the same
difficulty of using technical analysis to trade<BR>>mature markets in his
book "Smarter Trading".<BR>><BR>>Dr. Simons', whose articles on
spreads and options are superior, ends the<BR>>article "... None of this
favours longer-term position trading - the target<BR>>of most technical
analysis - but it does favour day-traders, limited-risk<BR>>options traders
and low margin-to-equity fundamental traders."<BR>><BR>>If anyone has
read these articles, I'd be interested to hear your opinion<BR>>and any
questions that they raised in your mind.<BR>><BR>>Best
regards<BR>><BR>>Walter<BR>><BR>> </DIV></DIV></BODY></HTML>
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