SEYKOTA's method?

[freealways]

Bilpritjr, reading in between the lines in Market Wizard, I am absolutely convinced that Mr Seykote uses cycle analysis. There isn't any two ways about that aspect of his trading.

Yes, I know that he is putting a lot of work into trying to encourage and assist people to study the psychological side of trading but it is also obvious (to me at least) that he doesn't really want to bare all.

And who can blame him for not wanting to shout the words 'cycle analysis' off the rooftops ?

freealways

 

[murray t turtle]

Quote from patefern:

Bill

Your observations about Ed's methods seem to be a bullseye.

I'll hazard a guess as to his MA and say it is a combination of a weekly and monthly MA of both a short and long period. He is a longer term trader and what is simple and obvious are the probable answers, looking for a change of trend and staying in it.
================================== ========

Based on Jack Schwager interview,recent writings,high probability Ed Seykota still uses moving averages,a trend measurement. Ed spells NasdaQQQ different from me, however sounds like [ peradventure implied,not stated] he is in NasdaQQQ uptrends.

Obvious Ed Seykota loves to read ,including a dictionary; Ed thanked one of his readers for praying for his eye sight health.


:cool
Ed likes comparisons, like Solomon;
[1] red , hottest of the red hot chili peppers
[4] green turtles working cartoon including a working turtles sign next to to two turtles working.

Ed made an excellant risk comparison- something like it may be more safe to live where guns are liked or required than places of high gun law restrictions.

All gave some , some gave all.

 

[funky]

Quote from rrs456:

Hi Funky,

I have come across 34 ema based system in another site. I posted several questions to the author of the system but never received a reply. I hope I can learn from your experience of using 34 ema based system. Can you please answer the following questions?

1) What are the unique characteristics of 34 ema? i.e. why 34 ema rather than, say, 8 13 or 22 etc?

2) Can you illustrate with a chart and explain your point about the "space between" the 34 ema in 5,2,1 min charts?

3) Do you go long when the price goes above 34 ema and go short when the price goes below it? or, do you have specific entry and exit criteria?

I have been observing, on paper, both the short and long time frame versions of the 34 ema based systems in trading eminis. It certainly looks promising.

The settings I noticed on the 3 min 34 ema based system were: 3 min chart -- 34 ema-- 14 cci -- 5,2,2 stoch.

I certainly agree with your observations on the behaviour of 34 ema based systems in terms of their impact on p/l.


Thank you.

1. the 34ema was recommended by a mentor who has been using it to provide a living for his family for 6 years now.
2. sure, just pull up any chart on any market that moves. notice how if the price is just above the 34ema on the 1-min, but just below the 34ema on the 5-min. it tends to bounce around like a ping pong. sometimes it reverses back on the 1-min, b/c the longer term trend is with the 5-min, of course.
3. not exactly. this is the foundation of the strategy, and yes you could start out just trying this. but i have found that it is much more effective when you enter NEAR the 34ema, so you don't have to GUESS when your trade isn't working. the 34ema will tell you very quickly and accurately define your risk. notice that when it first crosses over the 34ema, it tends to pull back to it and bounce off of the 34ema a couple times before trending? this is your classic setup. you can also use the 34ema as an exit criteria, it works great. i tend to think that taking half profits at a target price, and then using the 34ema as a stop for the rest, is the best way to trade this system.

you can use ADX, MACD, et al. to tweak your system if you want. I find that if I just stay away from 11:45-1 times I do pretty well. Don't let the ADX keep you out of the trade. I would suggest, rather, observing the market and determining the action yourself...always know the speed don't walk on the freeway and don't speed on a backstreet!

best luck

 

[maggandre]

Quote from funky:



works beautifully with little false signals, if you take into account the time of day and other factors.

You have been great in posting your tips for the 34PMA. You addressed time of day - what are the "other factors"?

 

[-ooO-(GoldTrade]

funky > i don't know about you, but I've seen that the shorter the timeframe, the less risk is involved<

Funky I believe we are referring to risk per dollar of profit.

If you run a $300.00 stop 3 times a day to earn a thousand you risked $900.00 to make that thousand. Do you think it is the same risk if you run a $300.00 stop hold the trade for three weeks and make a thousand?

Tharp gets into this. Have you read Tharp?

vulture > the macro conditions that enabled (Ed) to accumulate massive winners.. few people have the faith in market trends to actually emulate this level of patience and tolerance when the inevitable retracements occur<

Long-Term trading is just another stage you learn as you mature as a trader. Livermore teaches it in the early chapters of Reminiscences. I have a teacher that takes positions in futures contracts that he rolls over for years. It is part of seeing the big picture.

patefern > Start playing with backtesting on yearly charts with different MA values. <

I did testing using optimization over many futures markets. Short term. Medium term, long term and more. You can optimize history, but you cannot anticipate the future.

Spend your time. Find your optimized results then run them and see if you can beat MACD in real time.

 

[freealways]

Guys, you are all barking at the wrong tree. A system using moving averages is unable to account for (or equal) the phenomenal success Mr Seykote has obtained (if the stories are true that is).

[Please note that I am NOT disputing that one cannot make money using a set of moving averages. Just that it isn't enough to account for the spectacular successes of Mr Seykote. THAT can only be explained or understood if one accepts that he has an uncanny ability to anticipate tops and bottoms.]

freealways

 

[wally_]

Quote from freealways:

Guys, you are all barking at the wrong tree. A system using moving averages is unable to account for (or equal) the phenomenal success Mr Seykote has obtained (if the stories are true that is).

[Please note that I am NOT disputing that one cannot make money using a set of moving averages. Just that it isn't enough to account for the spectacular successes of Mr Seykote. THAT can only be explained or understood if one accepts that he has an uncanny ability to anticipate tops and bottoms.]

freealways

This depends on your timeframe as well. He is not a daytrader or even a swing trader. His timeframes are weeks to months. He does not have to catch bottoms or tops, it's enough that he catches 70% of the major trend.

 

[FishSauce]

Paul Tudor Jones in the same book said that trends only occur 15% of the time.

Food for thought.

Moreover, moving average tend to be overoptimized, i.e. curve-fitted.

For example, what's the difference between 34 ema and 33 ema? What's the different between 34 ema and 30 ema?.... and so on.. you get the point.

 

[PoundTheRock]

Quote from freealways:

Guys, you are all barking at the wrong tree. A system using moving averages is unable to account for (or equal) the phenomenal success Mr Seykote has obtained (if the stories are true that is).
...
freealways

Yes, he did mention that he used pattern recognition as well.

 

[wally_]

Quote from FishSauce:

Paul Tudor Jones in the same book said that trends only occur 15% of the time.

Food for thought.

This can be a problem if you trade only one market, but if you trade 7-8 or more then there is a high probability that there is always a trend that you can ride.