Evolution of Timeframe

[dottom]

Quote from vegasoul:
I think this is why money managment is so important..
Longevity is the key...

Money management is the easy part. A lot of authors have made a lot of money selling books to traders telling them it's all about money management and discipline. Well, yes, of course it is. But that's not the hard part.

Finding a tradeable edge that fits within your trading psychology (such that you can trade with discipline) and the rest is easy. Now constantly research new edges, ways to sharpen your existing edge, and also tests to validate the constantly validity of your edge.

 

[chasinfla]

human nature is the same as it ever was.

 

[Tea]

Do trading patterns like turtle/Donchian 20-period breakouts stop being profitable because of over publicity of the pattern or because the supply vs. demand pressure ratio has changed and the pattern is no longer appropriate?

In the 60-70's bull market in commodities, the turtle method worked because there was strong demand for commodities in an inflationary time. When inflation's back was broken in the 80's there was less demand for commodities and breakout trading stopped working.

So is it the chicken or the egg? Was it the change in supply vs. demand or too many traders using the pattern?

I think its the change in the supply/demand pressure ratio. Example: during the internet boom when dot com stocks were in strong demand, the breakout strategy worked great. Then when traders and institutions loaded up on these stocks, there was less demand pressure than supply - result, breakout trading stopped working.

Being that traders usually lag in hopping on the trade pattern bandwagon - its easy for people to believe that over publicity is the reason a pattern stops working.

However, as stated above - I believe that the real reason is a shift in supply/demand pressure.

 

[capitalMan]

Quote from Tea:

Do trading patterns like turtle/Donchian 20-period breakouts stop being profitable because of over publicity of the pattern or because the supply vs. demand pressure ratio has changed and the pattern is no longer appropriate?

In the 60-70's bull market in commodities, the turtle method worked because there was strong demand for commodities in an inflationary time. When inflation's back was broken in the 80's there was less demand for commodities and breakout trading stopped working.

So is it the chicken or the egg? Was it the change in supply vs. demand or too many traders using the pattern?

I think its the change in the supply/demand pressure ratio. Example: during the internet boom when dot com stocks were in strong demand, the breakout strategy worked great. Then when traders and institutions loaded up on these stocks, there was less demand pressure than supply - result, breakout trading stopped working.

Being that traders usually lag in hopping on the trade pattern bandwagon - its easy for people to believe that over publicity is the reason a pattern stops working.

However, as stated above - I believe that the real reason is a shift in supply/demand pressure.

the fundamentals certainly play a part in changing the markets, causing the strategy to deterioate, but I think the comparison should be made between trading strategy.

all I am saying is the prevalence of long/mid-term breakout strategy has CREATED patterns and opptunitunies that could exploited by other timeframe traders...and this has not much to do with fundatmentals(inflation and other factors) but of cuz, demand and supply pressure has change in the process...

 

[Platypus]

Quote from profitseer:


Time frames, profits, stops, chops. Always changing. Sometimes they change so fast, the only way you can make money is to just not change at all.

lol.. that is profound dude..

you should talk to Commisso as that statement may actually contain deep taoist / zenlike qualities..

 

[Platypus]

Quote from dottom:



Also, if a method did work on a similar time frame but not on the other, then this is nothing more than an optimization that happened to be profitable, but does not represent a general approach that is successful. It is like having a 5/10 MA crossover that is unsuccessful and switching to 4/9 MA's and all of a sudden you find a winning system. What you should be doing is run a full optimization set on all similar indicators on all similar time frames and observe the 3D surface plot of profit vs all variables to see if you find a stable plateau which supports the approach you are using, or if you happen to arrive by chance at an unstable peak.

If you don't understand what the above paragraph means then I strongly suggest you resist researching new methods until you do.

The key word there is ROBUST

 

[alfonso]

Quote from chasinfla:
human nature is the same as it ever was.

Human nature itself might be what it has always been, but the ways in which that nature are outwardly expressed have undergone, and continue to undergo, siginficant changes.

As someone on this site has said, Dr Zhivodka, I think, "truth beyond the platitudes" is what we're after.