Ask Dr. Deco

My Dear Doctor Deco,

I am somewhat taken aback. It is one thing to swap (trade) baseball cards with a chum, even if perhaps the transaction was not as fair as it might have been. It is quite another to engage in monetary transactions where one party suffers a grievous loss.

The type of trading you apparently refer to, and worse yet, participate in amounts to outright gambling. No good, and much harm can come of such activity. I was under the impression that your purpose was to dissuade the weak spirited from this endeavor, not to indorse it!

How one can live with himself knowing that his illgotten gains came at the expense of some poor soul who has gambled away the rent is appalling to me, and other men of moral standing.

To make "bets" on the future value of an index, future, option, or equity is to cavort with the devil himself. To find pleasure in anothers loss is unacceptable.

If a man ( or a woman) labors and provides a service of value, and is compensated for that labor, then a transaction of value to the entire society has taken place. But to take money from one mn's pocket, and place it in to another's based solely on a wager is against everything decent people stand for.

I demand an explanation for not only taking part in this shameless activity, but encouraging others to do the same!

A prompt reply is expected, sir.
 
Quote from hypostomus:

...thank you for enlightening me on the arithmetic of posts. That means that the number of viewers might be of the same order of magnitude as the number of variables in my too-few-degrees-of freedom trading systems.

As long as I am here, I might as well comment upon my research this morning into my little friend's new trading idea, "Hypostomus' Hypertrophied Hypothesis" (try thaying that without lithping!). There is a General Theory and a Special Theory, the latter being easier for legendarily under-intellectually-endowed traders to understand. En bref, it is that for NQ, there is an opening minute volume threshold which predicts the volatility of the opening hour. The General Theory, as you might generally and in general generalize, generalizes to all trades issues. The Special Theory worked magnificently this morning, adding yet another way to keep me from losing money by not trading.

Arthur (Art) Deco, M.D.
More...


Dr. Deco:

An opening minute volume threshold that predicts the volatility of the opening hour? The whole hour based on an observation of a one-minute bar? And this on a day with economic reports at 10:00 AM EST? Please forgive me for being skeptical, but that sounds a tad fanciful.

Regards,

Thunderdog
 
...I completely misunderstood your previous post. I assumed that in 1959 you were the manager of a baseball team and that you were trading actual players, not their baseball cards. Alas, that is far from the first time that a patient has misrepresented his significance to me. But no matter, your posts, albeit prevaricating, and apparently not that unusual for ET, are providing me an opportunity to explain to the innocents here what the psychology of trading is.

You are entirely correct that trading is a socially reprehensible activity, tantamount to gambling, perhaps verging on theft. But you must remember, we ARE primates. Jane Goodall captured on film instances where a larcenous chimp preferred to steal a banana from a neighbor, when he could just as easily have reached for one hanging from the tree directly in front of his face.

There is no arguing that trading is not at best a zero sum game. The only honest people in sight are those who provide an actual service, the very fine brokers, specialists, market makers, fund managers and regulatory agents who assist us. However, in my opinion, trading is a worse than zero sum game. Fraudulent volatility is manufactured by the Street and in the Pits (so appropriately named) to prey upon the emotions of the crowd and to induce trading hysteria. The esteemed Dr. Malkiel, I believe, was an optimist. The markets are worse than random, they are maliciously and meretriciously manipulated.

So you will get no counter arguments from me on this issue. However, when in Rome, as they say. I want my piece of the action, and if it comes out of your tattered hide, it don't make no nevermind to me. I fully realize that I am gambling when I trade. All I ask for is a hot deck and a chump (chimp?) on the other side of the table.

Arthur (Art) Deco, M.D.
 
Quote from hypostomus:

...thank you for enlightening me on the arithmetic of posts. That means that the number of viewers might be of the same order of magnitude as the number of variables in my too-few-degrees-of freedom trading systems.

As long as I am here, I might as well comment upon my research this morning into my little friend's new trading idea, "Hypostomus' Hypertrophied Hypothesis" (try thaying that without lithping!). There is a General Theory and a Special Theory, the latter being easier for legendarily under-intellectually-endowed traders to understand. En bref, it is that for NQ, there is an opening minute volume threshold which predicts the volatility of the opening hour. The General Theory, as you might generally and in general generalize, generalizes to all trades issues. The Special Theory worked magnificently this morning, adding yet another way to keep me from losing money by not trading.

Arthur (Art) Deco, M.D.
More...


Dr. Art,
Thankyou for commenting on the 1st one minute volume thingy.
I was looking back at days with your stated thresh hold of volume 1593.72 to check the validly of not trading rule. Is this number a moving ave. of some sort?
I'm now curious, as you said "opening hour" I assume that at some point, during the day the OMV (opening minute volume) is no longer important, if thats the case then is there a particular volume at a particular time in which to signal its OK to begin trading?

sulong
 
Are you not the self-same person who encouraged the outrageous posting on the unlamented Proposterous thread? Frankly I am amazed that you have the nerve to show your face (metaphorically speaking) here again. Cavorting with madmen bespeaks ill of your judgement.

Be that as it may, you ask a valid question, even better, one fraught with psychological significance in the markets.

Today's non-news (I don't even know what the housing numbers were, and won't bother to check) was written in price. As H. Plecostomus is fond of saying, "The price IS the news." Further, it was fully presaged by the opening volume, and confirmed by the coy way price repeatedly generated volume by tripping breakout thresholds one by one in neat monotonically increasing order. "Malipulation! (that is short for malicious manipulation)", I cry. It was perfectly obvious that one should short.

Further, and making a crucial point in the psychology of trading, traders doubt and will not trade simple systems such as the one which H. Plecostomus disclosed to me and which I have generously shared with you. I make an unsupported claim, and you have the nerve to unsupportedly doubt it! How very ET!

Arthur (Art) Deco, M.D.
 
My God! You are a marketing genius! Labelling this mini-system the OMV is a stroke (could I have one more, please?) of the sheerest brilliance (that's what we shrinks call BS). We could write an entire book on the OMV method, found a school of trading, and ride the crest of credulity into early retirement. I have long sought such a one as you.

As to the origins of the specific OMV number for any given day, I shall have to consult Hypostomus, if I can find him. He was last seen on his way to the SoCal fires to perform his civic duty, but on account of the mass transit strike and the general hunger from the grocery clerks' strike, I fear for his well-being. Damnable incompetent Grey Davis!

Arthur (Art) Deco, M.D.
 
Dearest Doctor,

I rejoice in learning that you share my vision of this thing called "trading" being a shameful endeavor. Yet a careful reading of your posts leads one to the conclusion that not only do you yourself partake in it, but you seem to encourage others to do the same. But what is most troubling is that you might be encouraging those least able (and you may read that as the typical ET member) to, shall we say, plunge their brains out. And preferably on the other side of a trade that you are holding.

While not being an active participant myself, I have devoted much of my life to the study of the markets. With all due respect (and it would seem that little is due), I must question this first minute volume/volatility method you are promoting. At best, it is nonsense.

I am beginning to suspect not only your credentials, but your intent in this so called forum. If I may speak bluntly, this seems to be an attempt to fleece the sheep!

To ensure the safety of the less intellectually endowed on this board, may I inquire as to where you obtained your degree, and the state you are licensed to practice in?
 
I apologize for my hasty response to you. I had to go manage a crisis intervention in my sexual dysfunction therapy group. Duty calls, you know, and they will accept no substitute.

I failed to point out that the OMV method (as our newly released promotional literature calls it) only applies to the hour from 9:30 to 10:30 AM ET. Poor cretinous Hypostomus is not knowledgeable about any other part of the day, as he lapses into catatonia when the volume drops, and suffers seizures when the price congestions strike. In fact, he never enters NQ trades after 10:21:00, which he claims also is a reliably back tested quantity in his overfitted system of systems.

Arthur (Art) Deco, M.D.
 
Could you perhaps clarify for me your position on the markets? Are you saying that you do not TRADE? I intend no disrespect, but in the event that that is the case, I would wish to solicit your help in understanding the common phenomenon on ET of posters who make ponderous pronouncements and promulgate profligate theories of trading, but do not trade. I find this most peculiarly perverse, somewhat akin to watching other people have sex and giving them inexpert advice in real time. In my own case, I may give bad advice, but I at least trade my own bad advice.

With respect to the OMV indicator, it is easy enough to test, so rather than cavilling I suggest that you do your own due diligence. I maintain that, like all good trading rules, it is based on a statistically stationary element of market action which is unlikely to change materially.

The logic is as follows. The whole charade of response to the news is totally bogus. The smart money already knows what the news is, and have already made the bulk of their money the previous day or overnight. The "response" is just a cleanup, like a cleanup print for a big trade. But there is still chump change to be made in the announcement itself if one can paint the tape sufficiently convincingly to induce the public to act upon the "news".

Now this requires for credibility that the public can accept that the "news" really is NEWS. In the case of today, that obviously was impossible to pull off. Therefore the smart money did not put on any opening positions because they knew they could not create a "news" response. Hence Hypostomus' Hypertropy Hypothesis.

As to my own credentials, I have two degrees in electrical engineering, which qualified me to work in the ECT industry. My medical degree was acquired from the University of North-Eastern South-West Virginia in Roanoke, Virginia, in an accelerated learning program over the course of a Christmas vacation. My accreditation is valid only for practice within the New Jersey State Hospital System. You may recall from Sylvia Nasar's book "A Beautiful Mind" that this system extends the highest quality of care to indigent patients.

As to my motives for posting here, I am beginning to suspect that there could be a great scam here in this OMV method, and am proceeding accordingly. As H. Plecostomus once posted (at least I think it was him), the public claims to want a fully disclosed system, but if given one will not trade it. Similarly, they claim to want an honest guru, but will cheerfully follow a charlatan if he manifests sufficient self-certainty in his mountebank method.

Arthur (Art) Deco, M.D.
 
My Dear Doctor

Thank you for providing your credentials. They seem to be valid and in order. I apologize if there was a misunderstanding concerning your legitimacy.

As for my actually trading, why of course not. I find it to be a worthless pursuit, doomed to failure. However, I do plan on opening a paper trading (simulated) account, possibly within a year or two.

The time and effort I put in to ET prohibits not only trading, but gainful employment, or even a social life. But I suspect that I am not alone in that.However, I feel my work here is necessaries, and of value to many. As you mentioned earlier, stupidity is rampant around here, and the stupid must be told that they are stupid.

As for your alleged methodology, I stand by my assertion that it is nonsense. If it weren't nonsense, then it would be nonsensical to divulge it. In fact, it would just be stupid. Therefor, I reject it without further comment.

But if I may, could I ask a question, and perhaps with your expertise solve a problem I am having. My computer is on the upstairs circuit breaker, but when Mrs. Public turns on the microwave in the kitchen, my computer shuts down. Any help would be appreciated. Thank you.
 
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