The Surf Report--part 2

Quote from bwolinsky:

You can google "Beau Wolinsky."

I've not read that book. I don't trust any chart that hasn't been quantified to the nth degree. You cannot determine your level of risk without it nor know how profitable your strategy is. I guess I just prefer to have all of my plans.

Trading fundamentals does not help you making good timing decisions. Financial statements and macroeconomic data can be the same for many days and until new data comes up, what goes up one day should not be assumed that it will keep going up, and until I understand what marketsurfer is basing his decisions on, we will just have to agree to disagree.
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I understand. I just read your blog bio. I now understand your need to quantify and test. To each his own. There are many ways to approach the market. I think I threw about 30 ideas at the wall for my automated systems and 3 stuck...but they only stuck after a lot of tweaking. 2 have been running profitably for quite some time and the other is relatively new.

My discretionary trading is all chart based. No indicators. My winning percentage isn't very high and I'm comfortable with that. But when I lose, I lose pretty small. It's just the classic trading principle "cut your losers, let your winners run".

In college I really wanted to trade. So of course I consumed the classic Graham and Dodd bible in about 2 weeks. After I finished it, I was very, very excited and went to research stocks and I realized quickly that I had nothing. A neighbor of mine let me borrow his copy of "How To Make Money In Stocks" and about a month later I placed a trade in GURU (Answers.com) based off what I read there and made 6+ points in about 5 days. After that, my backtesting involved using my college's ample ink and printing resources to print out hundreds of charts (monthlys, weeklys, dailys). My 'backtesting' was going thru each of those charts by hand and marking them up. I guess it always made sense to me. Price tells me more than a balance sheet ever could.

We all have our methods and Surf has his magic.
 
Quote from Pekelo:

Since I will be on vacation and traveling through August, someone else has to run the P/L. At 1250 with this current position open it is:

172 + 46 = 218 pts per unit

If Surf doesn't average down, it is going to be hard to blow this for the whole year....
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Credit where it's due...even if it's "random", the Ol' Surfinator damsure caught some points.

Great trade Surfeur!

:cool:
 
I was talking about Peter Brandt earlier. He's a great trader. Since I mentioned him earlier, I'll post a quick look at his most recent blog as of tonight. If it the pattern holds, then it could be huge for Surf and good fun us/me if the VXX can catch a serious bid over next few weeks/months....

Brandt's no big deal. He's only (sarcasm implied) returned an average annual rate of return of 68.1% (1981-1997, 2007). His blog post doesn't mean the pattern will hold or that he's even right. But it's definitely worth being aware of.

Chart Breakdown Ushers in Bear Market in U.S. Stocks

Posted by PeterLBrandt
on August 2nd, 2011

The trendline from the 2009 low has been broken and a H&S top has been completed on the closing price chart

This post is a follow-up to my posts of recent days here and here.

Today may go down as one of the most technically significant trading days in years in the U.S. stock market ($SP_F, $SPY).

http://peterlbrandt.com/chart-breakdown-ushers-in-bear-market-in-u-s-stocks/
 
Holding the course here with SHORT es SEPT.

Markets never go straight down--- prepare for rallies, even sharp severe ones on the way into the abyss---the tides have turned, ride the wave.

surf
 
Quote from bwolinsky:

You can google y."

I've not read that book. I don't trust any chart that hasn't been quantified to the nth degree. You cannot determine your level of risk without it nor know how profitable your strategy is. I guess I just .
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What's a "quantified chart" ? Last I checked there were not even testable definitions to chart patterns---

if you have quantified the patterns somehow, then what is the purpose of the chart? Wouldn't a buy/sell red light/green light signal or automation make more sense?

Unless, of course, as i contend-- charts need subjective interpretatation regardless of what the gurus say.

surf:confused:
 
Quote from bwolinsky:

PP do not use stops, as they immediately trigger a re-entry, but that's just my version.

I guess my strategies are heavily influenced by what I've read about trading. After breaches, there could come more breaches, but more often, lower highs, or higher lows. If you define these quantitatively, you'll always be comfortable in your position because that is how the market works.

The ES trades at the end of the day will be closed when it identifies a lower high, which could come anytime between now and 70 points from now, but not much higher.

Betting that the breach continues, that particular price action does not happen very often, but both NQ and ES charts say we're in a bear trend, so sometimes I wish it wouldn't take those trades, but caught between a move lower and more moves lower I would not bet we continue to make these lows. It's simply unlikely, not definite.
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Unlikely, not definite, seems to be an apt description of your strategy. And the fact that you don't use a stop with this strategy points to a flaw in your strategy.

I am not a fan of backtesting. I think backtesting creates a false sense of confidence in what the markets can and will do. In my 40+ years of trading the guys still standing are not the backtesters, but the guys who control risk. Yes, when you try to pick a bottom, your risk is that price extends, and that you end up getting caught in the bottom if you're using a stop. So what? Trades don't work sometimes. In 1987, if you tried to pick a bottom, and took a quick loss when it didn't work, it saved you. If you failed to take the quick loss, it was a career ender. Turns out it's more important how you control risk, not when you got in. Personally I use wide stops, but I use them.

Backtesting only means that you have optimized a strategy to the past markets. It does not mean the markets will continue to trade that way in the future. Good luck though with the trade. Hopefully it works the way you intended it.

OldTrader
 
Staying short-- this volatility is to be expected as the final vesages of bullishness are squeezed from the marketplace. the death shot has been fired, keep the course.
 
For the none believers....that say H&S patterns don't work when done by chartists that know what they're doing....I think you're wrong. Just a guess.
 
Quote from ElecEquity:

For the none believers....that say H&S patterns don't work when done by chartists that know what they're doing....I think you're wrong. Just a guess.
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of course they work, HS only exist in the past, so in order for the pattern to exist it had to have "worked". Hindsight bias is the number one killer in trading.

surf
 
Quote from marketsurfer:

of course they work, HS only exist in the past, so in order for the pattern to exist it had to have "worked". Hindsight bias is the number one killer in trading.

surf
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It's got nothing to do with hindsight bias. They exist in real time. They only matter once they're confirmed...that's when the neckline breaks.

http://peterlbrandt.com/charts-indicate-a-75-decline-in-the-u-s-stock-market-is-possible/ (read the date...this isn't something people just decided to call out ever since the break yesterday)

EDIT: Yes, hindsight is a major killer in trading. It's not an appropriate label in this case. I'm not gonna argue though surf.
 
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