Gravitational Trading Models

[Lucrum]

Quote from riskfreetrading:

How would one deal with the free loaders?

By risk...free...trading?

 

[riskfreetrading]

Quote from hermit:

Look up the Value Area Rule

expand more?

 

[riskfreetrading]

Quote from riskfreetrading:

"I just developed a new model of trading, and "tested" it using a real case. The stock on which it was tested is AA. AA released its earnings, so I thought to use the model to make a prediction for next day (which was today Thursday).

A central point of the model is to predict a price level (called gravitational price GPL) . The gravitational price is a price such that the next day, we will observe a price above GPL, and a price below GPL

A way to trade the model is for instance to look at the open price, and if it is above the gravitational price, you short because the model insures that there would be a price below GPL. There are other ways to exploit this further, but this is a basic application.

Application for AA:

On Wednesday evening the model said that the next day GPL for AA would be 14.65. AA traded at open at around 15.05, and a bit higher than 15.05 before open.

If one is to follow the model one would have shorted AA at around 15.05, and waited until price is below 14.65 to cover.

The model does not predict the drawdown (if any) and the ideal to enter and/or to cover. I have other models for those type of analyses.

What is your first reaction to this model, and do you know if others have worked on a similar class of trading models? Any other useful/constructive comments are welcome."

This article was first published on my financialtraders blog.

Case 2: ROST today friday. GPL was 45.00

I even tried live when I first logged to market at midday. Tried with 100 shares, and made around $50.

Score: 2 hits in 2. Need a large sample to conclude.

 

[Lucrum]

Quote from riskfreetrading:

Gravitational Trading Models

How about an anti gravity model?

Better yet, an anti matter model!

If you discover the black hole model, keep it to yourself. Been there done that.

 

[riskfreetrading]

was it you who came up with this anti-gravity system?

"Put a long lever in a fulcrum which is located deep in the back hole of lucrum...".

 

[riskfreetrading]

Today the model was applied to CAT. Predicted GPL of CAT was 53.40.

score so far: 3 hits out of 3.

 

[Lucrum]

My E = mc^2 model correctly predicted the exact time the equities market would open and close today. Back testing suggests an accuracy rate 97.248241%.
Needless to say I won't divulge the proprietary details or what it is I'm going to predict until after it's already happened.
And until the model achieves 100% accuracy, obviously more work is needed.
But fear not, I will endeavor to persevere.

 

[riskfreetrading]

Quote from hermit:

Look up the Value Area Rule

Thanks.

I looked it up. The Value Area is where 70% of the previous days volume took place. There are rules based on observation that, when re-entered area get filled 80% of time.

GPL is a level (one number). A rule is to sell if no value below GPL, and buy if no value above GPL.

GPL is not based on volume.

 

[riskfreetrading]

Quote from Lucrum:

My E = mc^2 model correctly predicted the exact time the equities market would open and close today. Back testing suggests an accuracy rate 97.248241%.
Needless to say I won't divulge the proprietary details or what it is I'm going to predict until after it's already happened.
And until the model achieves 100% accuracy, obviously more work is needed.
But fear not, I will endeavor to persevere.

possible, but you still have the doubt.

PS: if you mean that you want me to kick you azz, let me know so I can wear my boots with metallic material. You will feel and hear the kicking better.