Why does TA not work (for you)?
- Thread starter Xspurt
- Start date
Price or the interpretation thereof, brother Sam?
Quote from the1:
Surf,
You can type til your fingers bleed and the vast majority of ET will proclaim what I great book Edwards and Magee is. It actually is a terrific book but do the strategies in the book lead to profitability? Umm...no.
To the best of my recollection here is what I recently wrote to a PM I received, plus a few extra tid bits.
I use TA and Statistical Analysis, which includes automated data systems that crunch numbers for things like Time Series Analysis, Regression Analysis, Outlier Analysis, and such, but there is one element that any type of analysis cannot detect and that is the human element of "just knowing," which is based on years of watching the market move and an innate ability to read that movement and make decisions that are based on acquired or innate talent. Some people just have a "mind" for trading. This is the closest thing you'll get to the "Holy Grail," which, obviously, doesn't exist.
Edit: There is also one more VERY important aspect of trading a trader needs to know -- what type of market are we in? The answer to that is based on a measure of volatility. This is my MOST valuable tool. I measure the rate of change, or volatility relentlessly. In brief, in a very high volatile market (2007/2008) I will fade and average down into an outlier and in a very mild volatile market (the beginning of this year) I will buy and average up into an outlier because it tends develop a new regression channel, which can include many more outliers. We are currently in a medium volatile market, which is very difficult to trade, but usually requires going with a move rather than against it. Volatility also has to be measured in all time frames and you have to know which results are most relevant to your trading strategy -- i.e. if you trade the 1's (which I do) the most relevant measure of volatility is on the 5-min bars. Other time periods are important but the 5's are golden for me on an intra-day basis.
What fun trading is
Excellent, yes, I concur the1. Studies done on volatility have shown a definite edge --- your outlier method is very close to my system with price drivers added.
Yes, just like math savants, phone book memorizers, silver spoon benders, wizards of every stripe, mesmerizers, and 3 year old Chopin piano prodigies exist.....
Although, I nor my clients would ever invest in this manner.
STILL:
Quote from TheBlackHand:
snip
Now, back to the business at hand.....
So with your fancy database that tells you NOTHING but what has happened IN THE PAST, how on earth is this going to tell you that GSAM are about to dump 10,000 lots on the market RIGHT NOW?
Im sure you have some genius explanation that tells you when and where they will behave before they even know - but thats why you're such value. Even if you are part of the furniture round here.
snip
I was just catching up on my reading.
I note above your struggle.
From what you say, it may be possible that you do not know how the mechanics of order filling works. I can't think of another area of ignorance that applies. You may not understand how a strategy invloving 10,000 lots works either. This is 1 million shares.
GSAM has decided to go the cash from a held positon. They will use any order they wish and it will become a market order pronto.
Avery one has time to handle the GSAM order but people like you.
RE orders:
Either I am in front of them on the same side or they are helping me do my deed if I'm on the other side. Also I have a failsafe that they don't. I limit my positions to 100,000 shares in stocks that trade over 1,000,000 shares a day.
re held positions:
BSAM has to hold first to be able to dump. It has no stops on its holding because the stops would not help them.
Regulations require that a large transation be filed. (I have had to do this in the sports industry be cause I had lifetime skiing priviledges by dint of ownership and a board position).
during the two days left after the intent filing, if I were a hustler, I would put on limit order based shorts of no more then 100K shares or 10% of the 65 day average volume whichever is less.
They would be spread downward to not create a wall nor allow a dirth.
At the sum of the BSAM order plus the cascade values (siding with BSAM and equal to the opposite standing limit orders plus mine,) I would be watching for the bounce.
I get a short position as the BSAM cascade ensues.
Since I always trade by the 10% rule, and market orders are used by the broker staff automatically I would be taking off my filled positions with partial flatenings.
So anyone who follows the fish who own BSAM, sees the intent filing three days before it can be exercised. They may or may not be considred significant holders. (I learned not to be for all things except my special interests). If you want to hustle intents, you do it on the opposite side of the filler and you trigger making your net after the end of the calculated cascade based on the exisiting orders in the FIFO.
Our best cascade in ES was 27Feb a few years ago. It lasted 5 hours and was 98 points per contract. It was before the 6MAY cascade. You may be too young to know.
Quote from marketsurfer:
Yes, just like math savants, phone book memorizers, silver spoon benders, wizards of every stripe, mesmerizers, and 3 year old Chopin piano prodigies exist.....
Although, I nor my clients would ever invest in this manner.
STILL:
Nevermind "wanting to believe", how much will you pay to be shown?
No free lunches in this game.
I will pay nothing, I don't need the details of your system nor do I want them ( blackbox is fine) But if you can show me in a verifiable and non manipulative, scalable manner--that passes our basic quant DD--- I can connect you with more money than you can imagine.
surf