Repetition, The Mother of Success and Failure. RAMOUTAR REPORT VOLUME 10

Quote from RAMOUTAR:

"I" have never found backtesting to be a reliable method, that's not to say it isn't a viable way of testing strategy and predetermining risk and reward. I always use discretion in my trades, the challenge for me is keeping that discretion within the parameters of the plan. Having experience with a specific vehicle, whether index, stock, future or trading baseball cards certainly gives a clearer perception. That certainly not sufficient enough, its recognizing the pattern repetition and acting on it. I believe that is tha major cornerstone of technical analysis...capitalizing on repeating patterns.

Futures are a completely different animal, while the TA patterns are the same, the behavior and probability are quite different. In the past I have dabbled in futures, indexes, commodities, etc., and humbly I have no real experience trading outside of stocks and equity options. That for me has its pros and cons...for example I have traded stocks whose RSI was superior to that of an index, and on the flipside I have missed several opportunities in individual stocks when the broader markets have blown right passed me.

In this game, the most important thing for me is being comfortable and not complacent. Planning entry, exit, risk and reward before hand and then using discretion within their parameters works for me. When I began trading in 1990 there was /were no:

- real point and click trading platforms
- trailing stops
- automated stops on Nasdaq stocks
- alerts
- reliable backtesting vehicles
- "Scientist" :)

That forced me to be more stringent and less discretionary in my approach. Some people on this board never experienced trading without point & click, real time Level II & charts, automated stops on Nasdaq and listed, etc...while many do.

As the technology evolved discretion became more affordable. One of the downsides in having experience is being steamrolled over by people who use the newer technology. I, like many here am happy to have survived the "changing of the guard."

Have a plan, stick to it and evolve...or be consumed

That's what works for me :)

Thanks Scientist
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Thanks for your words, Ramoutar.

Okay, you are clearly a much more experienced trader than me and therefore you can refer to a much larger "internal database" of trading experiences, market events and chart patterns and behaviours.

I suppose one day, I will be just as able as you to interpret market action the way you can without any requirement for backtesting or other objective verification.

I am humbled by the wisdom of somebody who's been doing this for 14 years, starting long before "day trading" was even a known term, and has survived all the way through the bubble. Clearly, I do not have such a breadth of experience to refer to, which would be one of my reasons to "focus" on one issue only. Myself, I only started trading after the burst of the big 90's bubble, learnt in a bear market and trying to survive in harsh conditions by testing every single thing I did, before applying it.

I only hope that I'll manage to maintain as much care, discipline and humility as you give to the market, to live in this game as long as you already did.

May prosperity be with you, and thanks for your many great words, essays and other inspirations you have shared on this forum. I greatly appreciate them and think they are amongst the very best and particularly most interesting ever shared in public.

Warmest Regards,
Scientist.
 
Quote from harrytrader:

I join too. BTW about repetition :
http://www.elitetrader.com/vb/showthread.php?s=&threadid=14264

John Wooden, considered one of the greatest coaches of all time at any sport once remarked, "The four laws of learning are explanation, demonstration, imitation and repetition. The goal is to create a correct habit that can be produced instinctively under great pressure. To make sure this goal was achieved, I created eight laws of learning-namely, explanation, demonstration, imitation, repetition, repetition, repetition, repetition, and repetition."
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Man harry, you just get better and better. Here a couple of my favorites regarding The Man:

http://www.amazon.com/exec/obidos/tg/detail/-/0399526900

http://www.amazon.com/exec/obidos/tg/detail/-/0809230410

And of course my all-time favorite coach (forget the "trading" coaches):

http://www.amazon.com/exec/obidos/tg/detail/-/0684870185

http://www.amazon.com/exec/obidos/tg/detail/-/0941372057
 
Quote from RAMOUTAR:

"I" have never found backtesting to be a reliable method, that's not to say it isn't a viable way of testing strategy and predetermining risk and reward. I always use discretion in my trades, the challenge for me is keeping that discretion within the parameters of the plan. Having experience with a specific vehicle, whether index, stock, future or trading baseball cards certainly gives a clearer perception. That certainly not sufficient enough, its recognizing the pattern repetition and acting on it. I believe that is tha major cornerstone of technical analysis...capitalizing on repeating patterns.
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JR, backtesting in and of itself is not reliable; however, combined with walk-forward (backward) testing one can achieve some statistical confidence. For example, I'll take a testing period of six months and then apply a system. Then, apply this system to a random selection of six-month periods over the past ten years. Collect the results for each of these periods. For each period, I compile a set of metrics that generally describes the market's behavior for that period, e.g., its historical volatility ratio, its trend, strength of trend (ADX), etc. After analyzing each period, I revise the system and then repeat the same procedure, using different randomly sampled periods. After several iterations, sometimes the system begins to converge on a "solution", most often it does not.

Traders have different perceptions of what constitutes a system. In some cases, traders believe they can describe a simple pattern, program it, and then just pull up the performance report to assess whether or not the pattern can be traded. To me, this type of system is dangerous because it is closest to the random extreme of the market behavior spectrum. I tend to rely on system frameworks, those types of systems that are "all in" and which require months or even years of development. Examples of these frameworks are Drummond Geometry, Trend Dynamics, etc. Here on ET, harrytrader posts chart examples of his framework. I understand his need to be protective - he has probably put years of effort into his work, and intellectual property is everything in this business.

My partner and I spent several years developing an intraday framework. Is it a collection of patterns? Not really, it is a collection of interaction of patterns (or systems), and this framework uses a combination of market metrics that are important for understanding the intraday dynamics (for example, how does the degree of congestion on one trading day influence market behavior the following day?). There is one book out there that talks about a "pattern cycle" (I would argue that cycle is a misnomer), but even that material is not even on the cusp of a true understanding of markets.

Regarding your final point JR, I would disagree somewhat with your conclusion that the "cornerstone of technical analysis" is "capitalizing on repeating patterns." I would only add the phrase "in the right context", implying an underlying holistic framework.

Regards,

PTR
 
Quote from SlickRick:

...on a a CD I'm sellling. You're an awesome mentor. Will you be doing a similar CD for Esignal? Bid with confidence on your CD. :)
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Im bidding :p Do you have anymore to sell?
 
Sorry PTR, I didn't see your post earlier. As I stated in a previous post, backtesting hasn't worked well for me. Perhaps it's just because I didn't spend enough time backtesting, or just haven't had the interest. I'm glad that you have found something that has worked for you. In the last year I have reviewed 4 black boxes (all from different programmers). When backtested, the programmers forecasts were based on backtesting results, only to find that the forward results were severely discounted by way of unforeseen dynamics. In my mind, nothing will ever replace human judgement.

The net results of the scanning & research methods I use are not too much different than the results many of my closer colleagues achieve with backtested methods and strategies. Practicing a steadfast method of scanning and plotting entries and exits hasn’t failed me, then again I’m sure backtesting would reveal additional foresight (or hindsight) that may improve my results.

I must admit, while I wasn’t impressed with the results of the blackboxes put before me, I was quite impressed with the way the systems were backtested. eSignal has an "open box" technology and that makes backtesting more attractive to me. I’ll look into it one day. Thanks PTR.
 
Do you know that you sting ? Can you do shorter also instead of a "long winded banter reminiscent of Harrytrader" hahaha ! Your ego is as big as Scientist or me of course the difference is that you faint to be humble. It's funny that each time these kind of people has nothing more to do than personal attacks even when they have never been attacked before... now it's ok you will be on my list of ennemies if you want.

Quote from ChartingMarkets:

Scientist so in the end you don't even post your P&L how typical. Lots of talk no back up. You still go on to say you have more money than me even after the fact you wont post your simple P&L hey pick any month you want anything at all. I doubt you have more money than my by they way. However while I will back up my trading performance on ET I will not post my net worth on ET in the form of statements. You mention I post my P&L all the time. Actually I don't only once did I post it on the thread that I referenced (and that was in 5 pieces because the document was long). The second time was here. Thats 125 posts on ET and only 2x's I have post P&L. Not sure where you get these sweeping statements of "I have seen your MANY posts with P&L". However, once again you still come back to fight.

Folks in the end its like this. You have a guy like scientist who basically gets into pissing matches with everybody on Elite claiming here is a wealthy guy daytrading and that he is enormously successful. He posts 3.5 times per day and has a thread count of 1472 most of which are long winded banter reminiscent of Harrytrader. Then there is someone like me. I post less than once per day. I choose my posts and my replies. I have posted graphs with annotated charts that hopefully have been helpful. I have helped people with advice that have PMed and always happy to take the time to do so. I post a copy of a P&L for a month, I don't expect Scientist in all his bragging to ever do the same as he can't because he just has not made any substantial money and he wouldn't chance ruining this fake persona he has taken the time to build up all year. I think that in the end the irony is you cant prove who is who on an internet message board because even if you post your records it will be so conveniently ignored or worst brushed aside as Scientist has just done even though he makes reference to his greater profitability and net worth. Amazes me!

P.S. About your comment with the supercomputer you small minded man. I have worked with and been in the mutual fund industry, CFO of a hedge fund, and I personally know Jim Simons and his staff of the reminiscence Fund. If you don't know who they are they have a billion+ under mgmt and trade exclusively with algorithms using MIT, Stnaford etc pedigreed individual with mathematical degrees. They find swingtrades this way. I can say they don't use supercomputers, they use Pent 4's. Same thing available to me. Furthermore, my trading role is not find a way to invest 1 billion dollars, I am exploiting a niche and therefore when I find a chart at night or it breaks out during the day to trigger e a swing trade, the end result its that its money! I can clearly see you do not understand that. Faster technology only gets you in the wrong trade faster. Now either post your P&L or move the hell on Scientist. (However, since I am an astute reader of charts, I can say your chart shows me low probability that you will ever post your P&L but you will make an excuse and continue to claim your greatness on your next reply. Please I DARE YOU TO PROVE ME WRONG!) If you decide to go away and not reply I can promise you in all fairness I will consider this matter closed. However let it be known that I am always going to defend myself if you do.
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Quote from harrytrader:

Do you know that you sting ? Can you do shorter also instead of a "long winded banter reminiscent of Harrytrader" hahaha ! Your ego is as big as Scientist or me of course the difference is that you faint to be humble. It's funny that each time these kind of people has nothing more to do than personal attacks even when they have never been attacked before... now it's ok you will be on my list of ennemies if you want.
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Well, that's exactly the hipocrisy here isn't it? His last reply was so hypocritical, contradictive and not to mention full of false allegations that I just didn't even bother going in on it anymore. Just listen to his "long winded banter" on his experience in the hedge fund industry! How very impressive. Particularly his supposed attitude on "humility". This guy should cut himself a slice from RAMOUTAR. JR never attacks anybody. He always keeps a low profile and a sincere attitude of humility and diplomacy.

ChartingMarkets's humility only goes skin-deep. Underneath lives an angry fellow, probably someone who's had his teeth kicked in by the markets way too many times to remain happy.

Myself, I remain as humble as possible, yet always ready to blowfish if people try the 'agro' on me. It always seems to work, too. Just look at how ChartingMarkets embarrassed himself with his "I posted a statement" and claim that HTML isn't easy to be faked! LMAO! :D

Not to mention all the other guys on ET who embarrassed themselves trying to make a point about me. Almost every single one of them has been slapped by me one or the other way. Just look at the "scientist" threads by GG & Co., where ChartingMarket's many friends happily participated, yet all failed to bring evidence for even a single one of their claims of what I supposedly said, when I challenged them. Clearly, if even the "search" feature fails on their allegations, they've really embarrassed themselves. What a great laugh on my side though - every time again.

Now, here is an enlightening message for you flamers and holy wannabe's; There's always going to be a 2% in the market that fundamentally disagrees with 98% of the others. If you spend all your time fighting them - goodonya. That's what you'll be doing in the markets, too, in order to privide liquidity for contrarian non-mainstream people like harrytrader, RAMOUTAR, or me. But if you're interested in "progress", then stop fighting, be patient and look for the amazing insights that can at times be found reading the "banter" of people like harrytrader. And I am very sincere about this. Thank you for your consideration.

Veni, Vidi, Vici.
 
Quote from Scientist:

Well, that's exactly the hipocrisy here isn't it? His last reply was so hypocritical, contradict and not to mention full of false allegations that I just didn't even bother going in on it anymore. Just listen to his "long winded banter" on his experience in the hedge fund industry! How very impressive. Particularly his supposed attitude on "humility". This guy should cut himself a slice from RAMOUTAR. JR never attacks anybody. He always keeps a low profile and a sincere attitude of humility and diplomacy.

ChartingMarkets's humility only goes skin-deep. Underneath lives an angry fellow, probably someone who's had his teeth kicked in by the markets way too many times to remain happy.

Myself, I remain as humble as possible, yet always ready to blowfish if people try the 'agro' on me. It always seems to work, too. Just look at how ChartingMarkets embarrassed himself with his "I posted a statement" and claim that HTML isn't easy to be faked! LMAO! :D

Not to mention all the other guys on ET who embarrassed themselves trying to make a point about me. Almost every single one of them has been slapped by me one or the other way. Just look at the "scientist" threads by GG & Co., where ChartingMarket's many friends happily participated, yet all failed to bring evidence for even a single one of their claims of what I supposedly said, when I challenged them. Clearly, if even the "search" feature fails on their allegations, they've really embarrassed themselves. What a great laugh on my side though - every time again.

Now, here is an enlightening message for you flamers and holy wannabe's; There's always going to be a 2% in the market that fundamentally disagrees with 98% of the others. If you spend all your time fighting them - goodonya. That's what you'll be doing in the markets, too, in order to provide liquidity for contrarian non-mainstream people like harrytrader, RAMOUTAR, or me. But if you're interested in "progress", then stop fighting, be patient and look for the amazing insights that can at times be found reading the "banter" of people like harrytrader. And I am very sincere about this. Thank you for your consideration.

Veni, Vidi, Vici.
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Scientist it's now 10 days (1/18/2004) scince we posted back and forth on ET to each other. However, on 1/25/2004 you decided to post and flame me (which I respectfully for ET's sake decided to ignore) and now here on 1/29/2004 you try again. Why are you so fixated on publicly trying to make me out to be a liar? You claim to be above these antics and yet you continue to post these antagonistic remarks nonetheless.

If there is anything you doubt about my background, trading credentials or anything at all then I'm sure that my good friend Jai Ramoutar can vouch for who I am. (Both experience and account statements). Mr. Ramoutar and I have been friends for almost 10 years now and I will vouch for him and his trading credentials as I have witnessed it firsthand, furthermore, because you have made it obvious that you respect Mr. Ramoutar as well I will assume that an affirmation coming from him will be sufficient for you. If not than there is nothing really more that anybody can do to satisfy you.

Scientist I think its self explanatory here on ET who is the trouble maker and who is the one with the professional trading experience. If you have any doubts at all about me I am sure Mr. Ramoutar will put it to rest when he reads this post.

P.S. I will let the history of my posts on ET speak for themselves and anybody on this message board who has read them and moreover PMed me over my time here knows the real situation. As always good "luck" in your trading.
 
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