Quote from larrybf:
to answer the timeframe question... i have only examined timing systems using daily EOD price and volume data.
EOD data is not a very fruitful place for making money.
It is very commonly used by people though. I believe this common usage is a function of tradition and convenience. And the fact that most people have jobs or something like that. They scarf up what is there and use it.
To make money you must go to where the opportunities lie.
What apparently has happened, is that the literature has really built up and multiplied based on EOD.
The values, OHLC, also are emphasized for some reason. I think it is fairly contagious at this point.
When you look at the maths applied to the data, you also get to see how people mostly take what they know and read about and use that stuff for convenience.
On the other hand, a person can start from scratch and figure it out.
Timing is extremely important for making money but few approaches start with that as a basic idea and then work in support of enhancing timing.
The second element of making money is change over time. It is a necessary ingredient. Working on understanding change is very difficult with the EOD and OHLC constraints. Turning to looking at the characteristics of change really creates a great ball park in which to play.
Most people do not look at the whole picture. Any system is usually named for the piece it focuses upon.
Anyway, that is why I see that you have not had a successful experience with timing.
I focused upon timing from the start (1957). Nailing down the right time to begin to make money allowed me to build my approach around that and the one other facet: when does a money making trend end? Getting these two things straight completed my efforts in making sure I had a way to make money. I have used this stuff ever since.
I cull stocks that are repeatable and reliable. Once I knew the exact events that preceded and started trends, I just sorted out the stocks that do that. The trend endings come as an equally simple sequence of events. As they signal their arrival one after another, I exit as the best price is reached.
You probably noticed there is no OHLC and EOD ness in this. So you do not see timing for making money in those values.
Indexes are less complex to deal with because they trade in a zero sum game and they are bilateral. Timing is reduced to just one facet as a consequence. You are not doing cycles of profits as in equities. You are just continuing to extracting profits from the progress of the zero sum game.
Timing action comes down to one element of consideration. All you do is continually participate by being a winner all the time. Timing on this matter only focuses on where you stand relative to the opponent. It is a game where it is always your turn and never his. I express it in market terms as "always being on the right side of the trade".
I monitor and make that determination as required. The timing I focus on is related to the expression: "if nothing is wrong, do not fix it". All i have to do then is have a short list of stuff to look for.
This list comes from a very easy source. It's basis is really complex, mathematical and theory based. No one here has explored any of that territory except for one person who is much smarter than me.
The pragmatic substitute is easily carried out and I would guess about 30% of the people here do that. For them it evolves from their trading logs the hard way. People write in logs what they did. Too bad. It is what you didn't do that you learn from more often. Writing down what you didn't do will greatly accelerate getting rich.
The shortcut to making all the money a trend has to offer is found in knowing what stopped it. A trend will continue until it is stopped. That sentence is the KISS of bilateral trading in a zero sum game. All the theory will never be understood anywhere most likely. I like having it down but it is not important.
What stops trends is a very short list. There are no surprises either. No suddenness either. A sequential ending occurs where it adds up to not continuing.
I go along and finish each trend and then do as the market dictates. I follow along always staying on the right side of the trade.
There is no one, hardly that does not know when they are on the wrong side of a trade. Most people can "feel" being on the right side. Almost everyone leaves early and knows it also. The less time a person stays in a trade is a measure of "fear". we know all this stuff.
If you changed your log entries from what you did to what you didn't do, you would quickly find a list of why trends end. It is also the same list of what happens before a new trend begins.
No EOD, OHLC data showing up here. What you use to back test is data that is not used to make money. What you use to make money is the facts you need to know to "stay on the right side of the trade".
These facts are simple things. They are Boolean statements. I never use more than one at a time. The most I use is a pair. the pair have wording that change a little depending on one of three market sentiments. Naturally all of this is programable and very very accurate for optimizing making money.
In a zero sum game there is only one thing on the table. As you keep yourself on the right side of the market, you take profits each time you are required to take an action to adjust which side of the market you are on. QED.
