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Re: [EquisMetaStock Group] Re: best indicator


  • Date: Thu, 21 Jan 2010 11:25:07 -0000
  • From: "Patrick Butler" <pat494@xxxxxxxxx>
  • Subject: Re: [EquisMetaStock Group] Re: best indicator

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Perhaps someone can set someone right on compounding multiple indicators. He says that quote :-
 
EXAMPLE of using multiple indicators to any chart:

Indicator #1 - Potential 75% accuracy
add
Indicator #2 - Potential 75% accuracy
(now the combined accuracy drops to 56.25%)
add
Indicator #3 - Potential 75% accuracy
(now the combined accuracy drops to 42.1875%)
add
Indicator #4 - Potential 75% accuracy
(now the combined accuracy drops to 31.640625%)

Go ahead . . . keep adding indicators if you want to continue to lose money.

Now we all know that the accuracy of ANY indicator, on average, is far less than 75% but I used that to make an extremely "rose colored" point. Now look at using a better example of just 60%.

Indicator #1 - Potential 60% accuracy
add
Indicator #2 - Potential 60% accuracy
(now the combined accuracy drops to 36%)
add
Indicator #3 - Potential 60% accuracy
(now the combined accuracy drops to 21.6%)
add
Indicator #4 - Potential 60% accuracy
(now the combined accuracy drops to 12.96%)

It is no wonder that 95% of traders fail.
 
Surely he is wrong. He is using a sort of Bushonomics lol
Anyone agree with his twisted logic ?
 
regards
Pat
----- Original Message -----
Sent: Wednesday, January 20, 2010 1:48 PM
Subject: RE: [EquisMetaStock Group] Re: best indicator

 

Formula primer:

You are correct that ?geometric algebra is far more difficult?? , wikipedia.org has a long article  on it. I?d need to get a PhD in math to be to be able to use it. Perhaps we could use an engineering approach i.e. use applied mathematics without having to know much about mathematical theory.

Can you explain a little more about ?so the way to have any predictive ability is to get 2 standard deviations of the move before knowing the exact full extent of the move??

Lionel

From: equismetastock@yahoogroups.com [mailto:equismetastock@xxxxxxxxxxxxcom] On Behalf Of formulaprimer
Sent: Wednesday, January 20, 2010 6:16 AM
To: equismetastock@yahoogroups.com
Subject: [EquisMetaStock Group] Re: best indicator

 

I developed my own using geometric mean which is far superior in accuracy than algebraic mean... geometric algebra is another way but it is far more difficult than the general western indicators like RSI MACD and all MA variations... All indicators are hind sight indicators which means like fractal you can only say a top and bottom exists after the fact so the way to have any predictive ability is to get 2 standard deviations of the move before knowing the exact full extent of the move... because of this problem large funds use seasonal cycles as predictive buying and selling that means they use time instead of price... so it might be better to use time and completely ignore price... my indicators almost ignore price and use time angle because if you notice degree of angle has a lot to due with the markets and of course distinguishing from trend and whipsaw consolidation... in closing the majority of markets go sideways unless the market is in a bubble. Hope this helps.

--- In equismetastock@yahoogroups.com, "Patrick Butler" <pat494@xxx> wrote:
>
> Hi all,
>
> I have been using many indicators over the years e.g. rsi, Macd, moving averages etc.
> Mostly all of them are lagging ( for obvious reasons ) etc. But one does need an indicator or perhaps better a pair of indicators. Where one covers the other's deficiences.
>
> Which 2 or more would you recommend to concentrate on ?
>
> thx
>
> Pat
>



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