|
PureBytes Links
Trading Reference Links
|
A few comments on your concise and excellent summary.
*** I think my cat is better than your dog. She jumps into my lap
then does a cat thing with her paws on the keyboard and I just buy the
keys she hits.
*** I use the first derivative of a quadratic equation fitted to the
price to rank my carefully selected stock list. This has worked well
for me for the past several years.
*** Determining the state of the market seems to be the key. I have
found some success in using statistical indicators which generally
count the number of stocks(say in the Russel 1000) that are in a
particular technical condition, charting the resulting counts, then
applying technical indicators to the charts. Seems to work for me.
--- In equismetastock@xxxxxxxxxxxxxxx, "Lionel Issen" <lissen@xxx> wrote:
>
> Hi Super and Preston:
>
>
>
> Your responses are excellent. You have summarized all your
experience. Every
> would be trader should memorize them.
>
>
>
> Thank you both.
>
>
>
> Lionel
>
>
>
>
>
> From: equismetastock@xxxxxxxxxxxxxxx
[mailto:equismetastock@xxxxxxxxxxxxxxx]
> On Behalf Of superfragalist
> Sent: Monday, November 05, 2007 2:48 PM
> To: equismetastock@xxxxxxxxxxxxxxx
> Subject: [SPAM][EquisMetaStock Group] Will indicator based on Calculus
> perform better than OHLC indicator?
>
>
>
> Here is my take on this question which is a typical newbie question or
> thinking pattern especially from people who have some kind of
> technical degree.
>
> I've been trading stocks off and on for nearly 30 years. If you want
> to see my background, you can read Roy's newsletter.
>
> At any given moment in time around the world there are literally a
> million people writing and testing trading formulas. Some are
> individual traders, some work for bankers, some work for hedge funds
> and a lot of them work for nothing.
>
> A few bankers and hedge funds look for ways to exploit small
> imbalances in the market. There are mathematical techniques that can
> find opportunities to make a quarter of point on inefficiencies. And
> the bankers and hedge funds spend many millions of dollars looking for
> those inefficiencies and formula's. Unfortunately those opportunities
> rarely, if ever, exist for the small trader and 99% of all other
traders.
>
> No one, including the bankers and hedge fund managers have ever found
> any method based on rocket science, or rockhead science, to beat the
> market consistently. Every avenue of quantitative, fundamental and
> technical analysis has been examined in extreme detail by personal
> computers, mainframes and super computers. It ain't happening for any
> of them.
>
> Every want-to-be trader coming into the game thinks they're going to
> get rich primarily because they've read bull-shit stories written by
> people selling trading products. Yes, there are a few, very few
> people, who have the instincts and skills to consistently make money
> trading equities. The key word here is consistency.
>
> I get my butt chewed out every time I say that trading options is a
> losing proposition or that futures traders eventually get their ass
> handed to them, or that day traders will get wiped in the long run.
>
> Someone pops up with a story about how they're making money selling
> puts and calls or trading currency or toilet paper. Yeah, I know. Call
> in 20 years and we'll talk about your track record.
>
> Consistency is the problem.
>
> In an uptrend when 60% to 75% of all stocks are rising my dog does a
> great job of picking stocks. In fact I'm surprised at how often my dog
> beats a lot of the TA systems I have sitting around in my computer. As
> I've said in this forum before, my dog has been offered jobs at mutual
> funds, but she has a problem showing up everyday so I've had to pass
> on letting her do that.
>
> Okay, the question is can an individual trader make money consistently
> over the course of 20 or 30 years. Yes, I know a few who have done
that.
>
> Here is what I've seen to be successful.
>
> 1. Only trade when the market is in a state conducive to what you are
> trading. If you are an equities trader trading long, trade only during
> uptrends, etc.
>
> 2. Prescreen the universe you're going to trade from. In other words,
> if you're trading equities only trade the equities someone with a very
> long track record like Valueline, IBD, Ford Equity or Standard and
> Poors has picking stocks with quant and fundamental analysis.
>
> 3. Use a very simple system to decide on what trades to make from the
> prescreened universe.
>
> 4. Keep a lot of records, read a lot of charts and study the crap out
> of what you are doing until your instincts are better at picking
> winners than are whatever simple indicators you are using.
>
> 5. Study the overall market so you will have on the money knowledge of
> when your trading strategy is going to perform well.
>
> 6. Learn to manage risk.
>
> 7. Stick with what you are doing until nobody on earth does it better.
>
> 8. Understand that making money takes time. Consistency, compounding
> and performance over time beat trying to get rich quick.
>
> As far as ARIMA goes, if it lights your fire okay, but it's not going
> to make you any more money. In my opinion David Sepiashvili is one of
> the best time series guys around.
>
> http://www.alticom.com/indicators/applications.html
>
> I've used and tested a lot of his stuff. It's nice, if it's your
> personal preference. And it works pretty good in an uptrend. But as
> far as making you more money, the rules I set out above will really
> get the job done much, much better.
>
> John Ehlers over at Mesa software has all kinds of indicators, books,
> systems and other stuff you can buy based on signal processing
> mathematics. John's a nice guy, knows what he is doing and sells a lot
> of stuff. I like John, and I like David and his stuff, it's really
> more about personal preference than performance. John's stuff works
> well in an uptrend also.
>
> I described some very simple systems in Roy's newsletter that work
> really well (also in an uptrend). There was not one bit of rock
> science in them, even though I understand the mathematics of rocket
> really well. If it made money consistently I would use it.
>
> People pick trading strategies based on their personality and
> emotional make-up, at least the survivors do. Then they find whatever
> feels comfortable and works, which means they apply the 8 concepts I
> already mentioned.
>
> Some people think that if something is complex it must be good. For
> them there are the untestable and totally inconsistent Elliot Waves,
> Murrey Math and Gann Charts. For other people, a simple 60 day high
> and the right looking chart gets it done.
>
> By the way the 2nd derivative of a polynomial equation that describes
> a stock's price curve is a good way to rank stocks for future
> performance. However, it's not nearly as good as the external relative
> strength and all I have to do to get that is click on a tab key in
> SpyGlass.
>
> Have fun, whether you're winning or losing!
>
> Super
>
> --- In equismetastock@xxxxxxxxxxxxxxx
> <mailto:equismetastock%40yahoogroups.com> , pumrysh <no_reply@> wrote:
> >
> > Eric,
> >
> > Really thought you might have gotten more replies to this.
> >
> > So let's consider your question.
> >
> > First you comment that "there are so many financial institutions
> > developing indicators based on complex Calculus formula."
> >
> > My question would be how do you know this? Are you being told this
> > or have you actually seen the indicators?
> >
> > Realize that much about the financial world is pure hype...always
> > has been and likely always will be. Why else do you think the SEC
> > has so many watchdogs out there and is shutting down bogus
> > operations.
> >
> > Next is the question of whether you need a complex formula inorder
> > to make money. Take some time and study the countless systems out
> > there. What you will find is that the simpler ones are usually the
> > ones making the most money. So why do you need a complex formula?
> >
> > I've written and studied formula's for a little while now. What I've
> > come to realize is that a lot about how the formula is written is
> > based on the background and training of the individual doing the
> > writing. A good case in point is a formula that I had worked on
> > years ago. I thought the formula was just the stuff that
> > millionaires were made of. A number of us played with the formula
> > and realized that it was just a simplified version of a pre-existing
> > formula. Years later an engineer came along and published a version
> > of the same indicator. It was so strickeningly similar that he and I
> > had conversations about his work. The difference in our versions was
> > that his calculations were a bit more complex than mine but the
> > final outputs were identical.
> >
> > Next thing to consider is that financial institutions usually don't
> > look at a single stock. They are more concerned with the stocks that
> > make up a market. Their concerns are related to the fundamentals. I
> > doubt that you will find a financial institution putting very much
> > money into a company that doesn't have an outstanding reputation and
> > outlook. They are looking at such things as return on investment,
> > projected earnings, sales and growth.
> >
> > Fundamental and Technical analysis are very different. They can and
> > do compliment each other though. It is extremely wise to select a
> > stock first on a fundamental basis then on a technical basis. Do
> > this and you'll find the rewards to be far better.
> >
> >
> > Preston
> >
> >
> >
> >
> >
> >
> >
> > --- In equismetastock@xxxxxxxxxxxxxxx
> <mailto:equismetastock%40yahoogroups.com> , chichungchoi <no_reply@>
> > wrote:
> > >
> > > There are so many financial institutions developing indicators
> > based on
> > > complex Calculus formula, does anyone have any suggestions what
> > > advantage it is as comparing with OHLC indicator for Metastock?
> > > Thanks in advance for any suggestions
> > > Eric
> > >
> >
>
>
>
>
>
> [Non-text portions of this message have been removed]
>
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/equismetastock/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/equismetastock/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:equismetastock-digest@xxxxxxxxxxxxxxx
mailto:equismetastock-fullfeatured@xxxxxxxxxxxxxxx
<*> To unsubscribe from this group, send an email to:
equismetastock-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|