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The Most Valuable Thing about Real Time Quotes...a Question...and the Market...

  • To: "Metastock-list" <metastock-list@xxxxxxxxxxxxx>
  • Subject: The Most Valuable Thing about Real Time Quotes...a Question...and the Market...
  • From: "Steven Buss" <sbuss@xxxxxxxxxxx>
  • Date: Sat, 13 Dec 1997 11:38:01 -0800 (PST)

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I thought it might be that I could make more money if I had real time
quotes.  But the most valuable thing about getting real time quotes is not
that I can make more money (although I'm finding out that I can given my
"trading personality").

The most valuable thing for me about getting real time quotes has to do with
something Mr. Estes has said a few times recently.  That one can build a set
of indicators (a "system" if you will) and then LEARN TO TRUST IT.

I'm finding that LEARNING TO TRUST the indicators takes less time with real
time quotes than with end of day data.  Watching 1 minute bars flash by
accompanied by simple 1, 5, and 60 minute default parm (5,3,3) stochastics
is interesting because it provides the basis for an intensive and
interactive learning experience.  One is prompted to guess where the next
bar will be every minute.  And you find out 1 minute later if you got it
right.  And you notice things about how the indicator values change in more
subtle ways when the next bar doesn't go the way you thought it would.  In
short, I think it's possible to shrink the time that it takes to make the
indicator your own.  This isn't a "technical" issue really; it has to do
with what the psychology of learning is about...(i.e., increasing the number
of instances that I must "trust" to find out if the indicator(s) steer me
wrong or not provides a broader and deeper psychological basis for the

I remember reading a chapter in one of Schwager's Market Wizard books about
a guy who spent months and years perusing charts to ascertain the "price
patterns" and indicators that might help him to become a profitable trader.
(This was before the days of the software we now have available.)  I
understand that story now.  This guy made the price significant patterns and
indicators "his own" by living with them day and night.

* * *
So, my question is this:  Are there other things that relative newcomers can
do to shrink this "learning to trust" the indicators interval?
* * *

Regarding the market, the daily default parm stochastics (5,3,3) are all or
mostly below 20 but the slope on the line is still negative.  The weekly
stochastics on the Dow and S&Ps are still above 80 but have turned down.
Weekly stochastics on the Nasdaq 100 and the Nasdaq Composite haven't been
above 80 since mid-August and the first of October respectively.  For these
latter two indices, the stochastic crossed below the MA this last week.

Significant also is the change in the look of the default parm weekly MACD.
For all the indices mentioned above the MACD-Difference has decreased when
it had earlier been increasing.

Steven Buss
Walnut Creek, CA