Quote from Xspurt:
Slow down Jack, you misread my statement: I was not asking how regression happens, but rather why it happens. I understand the how and can demonstrate it but better than that, I can demonstrate someone I mentor demonstrating it. What I can't explain is the "why" price will reverse on a sudden spike to an exact reversal point that your zillion lines miss so you are forced to label it a failure to traverse. It is the psychology behind the exact time and price reversal in a sudden spike on a 1 min chart that I am inquiring about and not how it sets up. Even to say it is possible starts flame wars that asks another set of interesting questions about market participation and underlying psychology.
Thanks for your effort to help me understand your comments.
The technical reasons for the situation you describe are well known. These reasons do provide the why.
You are correct that they have to be part of system solutions for making money trading.
For me, I can use regression to build a trading system. I reviewed my past efforts and their money velocity. I used MLR on position trading. To turn 10K into 1,000K in a year (240 days of trading), for me, using regression, it would be a close call. I'll forfeit immediately.
I think I understand that you feel doing an experiment of a given design could prove how different systems compare. You are correct that different systems used by "like" people would be a consistent way to show performance.
I used to be in the ore recover business. I had to invent a way to take bullshit out of sales and marketing. What I invented was taking a pile of ore and dividing it into two piles. Each side would refine the ore and give the left overs to the other side.
Then the left overs would be refined and the amount of new precious metal extraced would be compared.
This cut the bullshit and accusations way back.
Why don't each of us take a few of marketsurfer's investors and see who can make them more money. Lets start with enough capital to beat some of the guys on the Forbes list.
How do I keep my amateur standing?
At the end of this testing your way, will whoever learns be able to keep their skills or do they just have us trade their million dollars and they just have free time for the rest of their lives.
Should I cancel the record I planned to create on ET? I never did get the input on how to report commodities trading in a journal.
Again sorry about my screw ups.