Elite Trader School

[SunTrader]

lol this is also what the book warned against -- overfitting data lol. How about you make the next 10 trades using fibs and then tell me what the win/loss ratio was. Also, your timeframe looks really long for a "trader"....

That's just it - I don't make my trades based purely on fibs alone.

Do you always make assumptions? Because that is what I might be doing based on your last post.

 

[themickey]

which is that there is little to no predictive value in technical indicators.

My estimate, they diminish returns for the practitioners, hindering more than helping.
However for those on the other side, it helps to have believers.

 

[longandshort]

That's just it - I don't make my trades based purely on fibs alone.

Do you always make assumptions?

Then what exactly are we arguing about? I said that fibs have no predictive value, and you’re saying you don’t really use them, so I guess we’re good.

 

[longandshort]

My estimate, they diminish returns for the practitioners, hindering more than helping.
However for those on the other side, it helps to have believers.

what I’ve always found interesting was that the simplest indicator (momentum) is the most useful. Yet very few traders here seem to keep it that simple & move on to risk and sizing management.

 

[SunTrader]

Then what exactly are we arguing about? I said that fibs have no predictive value, and you’re saying you don’t really use them, so I guess we’re good.

Hahaha

I don't know where you got that from? "I don't use fibs alone".

Have a good one out there by the bay. Got to tell you I was watching Bloomberg this past weekend and the CEO or maybe COO of Blackrock was on talking about his vision and ways he runs things. His main expertise, if I remember correctly, is real estate above everything else. And in that vein one of the last things he talked about, in a positive light, was the gentrification of Oakland that reminded him of Brooklyn 10, 20 years ago.

 

[SunTrader]

what I’ve always found interesting was that the simplest indicator (momentum) is the most useful. Yet very few traders here seem to keep it that simple & move on to risk and sizing management.

Momentum like TD ROC indicator (use it all the time as well) - I bought it years ago along with many others like TD Sequential, which has a momentum component as well, from Tom DeMark's original software vendor before Bloomberg locked him up?

What's your thoughts on divergence. No predictive value also I suppose?

Hey how'd that perfect eMini 61.8% retracement from today get on my chart pic?

 

[longandshort]

Momentum like TD ROC indicator (use it all the time as well) - I bought it years ago along with many others like TD Sequential, which has a momentum component as well, from Tom DeMark's original software vendor before Bloomberg locked him up?

What's your thoughts on divergence. No predictive value also I suppose?

Hey how'd that perfect eMini 61.8% retracement from today get on my chart pic?
View attachment 263522

The beauty about momentum is that you don't need a fancy indicator. A simple ROC will suffice. Assets exhibit autocorrelation, so you can profit by buying a trend. CTAs, which run their strategies almost entirely around trend following, use filters for a reason -- they are much better at managing the noise in a price trend. In the absence of good filter tech, I would stick to ROC and std lines on daily pct change.

A big problem with price-based indicators is that price itself does not contain that much information -- but price change does. So technicals can be more useful applying them to price change than to the price chart-- hence, using daily pct change within std bands is superior to "divergence" in the price.

 

[SunTrader]

The beauty about momentum is that you don't need a fancy indicator. A simple ROC will suffice. Assets exhibit autocorrelation, so you can profit by buying a trend. CTAs, which run their strategies almost entirely around trend following, use filters for a reason -- they are much better at managing the noise in a price trend. In the absence of good filter tech, I would stick to ROC and std lines on daily pct change.

A big problem with price-based indicators is that price itself does not contain that much information -- but price change does. So technicals can be more useful applying them to price change than to the price chart-- hence, using daily pct change within std bands is superior to "divergence" in the price.

TD ROC is simple. Price divided by price[12] bars ago.

Then what DeMark refers to as duration analysis is applied to determine if OB/OS will likely reverse price or not - along with using his qualifiers whether or not to enter trade.

 

[longandshort]

I guess my point is that things like TD indicators don’t really add value and may have a negative impact on your return. I’ll compare a simple pct change vs TD vs pct change + std later and post it.

 

[themickey]

what I’ve always found interesting was that the simplest indicator (momentum) is the most useful. Yet very few traders here seem to keep it that simple & move on to risk and sizing management.

The trouble with 'Simple', it doesn't appear sophisticated enough.
As most ETers know, the more monitors on your trading desk, the more squiggly lines on your charts (along with heaps of different colors), the more fancy scientific words you use, the more jargon in ones posts, the more backtesting along with convoluted strategies, this is what one needs to impress. (one's own ego).