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From: <A title=winchp@xxxxxxxxxx
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To: <A
title=amibroker@xxxxxxxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Thursday, May 24, 2001 7:49
AM
Subject: Re: [amibroker] Vertical
Lines
This is not the place to go into these things. As
a generality any horse can make it around the track. Some are better
than others. The fact that almost any method scrutinised to an inch
of its life coupled with money management speaks volumes for money
management. By money management I mean simply GET OUTwhen
it doesn't go you way from the start. I'm my own worst adherentof
this one. Why is it so important to be able to get a timeand
price from a single high or low? Would anybody seriously invest5%
of their wealth on a single data point? So what's the
point?
As you note below, mutiple inputs
are important, although you incorrectly assume that I use only Gann.
Gann stuff is one approach that I use. Fibonacci is another,
Momentum is another. Etc. So for me Gann is just one of many
tools, and like Fibonacci is used as a heads up indicator. I donot
invest on the basis of any single indicator. And yes, money
management is important, but I like to start with the best indicator base
that I can find.
WE AGREE.
I've had a go at Gann and the problem is forme
that its not IMNSHO even as useful as my favourite P&F. Notonly
does it not have timing but it doesn't give any sense of "storing of
energy". I've thought that a 3D square where time spent at a price
accumulated vertically might be useful. But my biggest problem is
that it doesn't seem grounded in anything substantial. Even
Fibbonacci seems to be reflected or grounded in some natural mathematical
order. At best if Gann provides a set of definite rules that are
adhered to maybe that's its strength or best point.
You clearly do not fully
understand Gann when you say it does not have timing. Please refer
back to the Gold chart. But your biggest problem is mixingup
correlation with cause. There is nothing you or I use that has a
known cause. Correlation? Yes, but not cause. As one
learns in Logic 101, establishing a cause requires a theory that accounts
for observations better than alternative theories. As a result,
everything we do is in the "voodoo" category since there are no valid
theories (not correlations) for MACD, RSI, Gann, Fibonacci,
etc.
WHO MENTIONED CAUSE?
I presume that "grounded in
anything substantial" is a cause, certainly not a
correlation.
I've read almost "Truth of the Stock Tape" & "Wall
Street Stock Selector" by Gann. My conclusion was that the markets
in his day were different and he applied a great deal of unknown but
appreciable sub-conscious pattern recognition and judgement to his work -
at least I think so. Interpretation still has plenty of scope.
Gold may well have fit within $0.50 but I'm also sure that someone's RSI,
or MACD or whatever had settings that hit it too.
I have read very few of
the original works of any indicator/system developer, including Gann,and
just sponge off of the digested output of the TA writers, as most
do. But you are exactly right about the value of other
methodologies. That is why no tool should be used alone, including
RSI, MACD, Gann, Fibonacci, etc. Very few use only one thing, but
look for verification from many. In my experience, Gann is one that
is useful in this regard, and so far all you have said that is that
you do not believe. I have shown you evidence that it does
work. Always? No, but nothing does. I have notseen
anything presented by you that indicates that Gann has a poorer
win/lose ratio than any other indicator. Do you have such
evidence?
I CAN SENSE THAT NOTHING SHORT OF
A TREATISE WILL WORK FOR YOU. THEN I FACE THE CHALLENGE PROCESS. AND
THEN OF COURSE ITS STILL ONLY A THEORY SINCE THERE IS NO PROOF.
Since you have knocked Gann so
hard, I have no doubt that you have statistically valid data to justify
such a position. Please share that so that we can all benefit.
I certainly do not expect a treatise. How about graphical or tabular
results demonstrating the futility of using the Square of 9 or Gannsect
versus other methodologies? If this cannot be done, then there
is no objective basis for rejecting these
approaches.
I spent a bit of time in misc.invest.technical and
misc.invest.futures newsgroups and of those whose opinions and experience
I came to believe was based on solid years of experience, they didn't
have much kind to say about Gann compared to other approaches. I
suggest a vist to www.deja.com and and
see Hershey for example.
Most, like yourself, do not really
understand how to properly use Gann. As a result, their opinions are
not particularly important. Like you I used to spend time
on the "misc" boards, but did not find them worth the effort of
shifting through the "junk." There are much better
places.
THIS TRUE ESPECIALLY LATELY OVER
THE LAST 6-8 NTHS ESPECIALLY. HOWEVER SEVERAL YEARS AGO THE GROUPS I
MENTIONED WERE ESPECIALLY ACTIVE AND ABOUT 10-15 POSTERS WERE EXTREMELY
EXPERIENCED IN TIME, MARKETS AND TECHNIQUES. THESE ARE PEOPLE WHO
KNOW ABOUT ARCH AND GARCH AND EVEN MORE ADVANCED TIME SERIES ANALYSIS
TECHNIQUES. SOME DEVELOPED TRADING SYSTEMS FOR MEGA MILLION FUNDS.
AS A RETORICAL SUGGESTION - WOULD YOU BE HAPPY WITH YOUR SUPERANNUATION
FUND USING GANN TECHNIQUES?
What do
you mean by Gann techniques? I use only two - Gann Square of 9 and
Gannsect. Yes I would be happy using them with my IRA, as well as
with any of my trading. In fact, I do. I do not use different
methodologies for different types of accounts. Why would I?
The trading vehicles differ, but not the methodologies. <FONT
color=#008080>I suppose that one could envision using different techniques
for short- and long-term trading, but that would reflect use of systems
that are specifically aimed at certain time frames, which mine are
not.
I suggest that multiple tools operating in different
time frames, an awareness of the inherent lags or anticipatory natureof
the tool/indicator/oscillator/chicken entrails coupled with MM will do the
trick more than GANN.
Well as noted above, we agree
about multiple tools and time frames. But MM? You obviously
are not aware that MM is based on Gann's Square of 9. Time for a
little homework. Once again, please provide evidence for your
statements about the value of one methodology over another. You
speak with such certainty that I am sure you must have a valid statistical
basis for your statements. Please share them with us, or by
direct e-mail, if you do not want to post. Absent this enuf
ced.
OK. READ P. KAUFMANN PP366
-371 FOR A DESCRIPTION. NOTHING STARTLING OR DEROGATORY ABOUT WHAT HE
SAYS. THE LAST FEW SENTENCES ARE 'ON MANY OF GANNS CHARTS THEREIS
NOTATION SHOWING PLANETARY MOVEMENT...'. KAUFMANNS NEXT TOPIC IS
FINANCIAL ASTROLOGY. I'M NOT USING GUILT BY ASSOCIATION, BUT
REFERING ABOVE WOULD YOU BE HAPPY IF YOUR SUPERANNUATION FUNDS INVESTMENT
DECISIONS WERE RULED BY ELEMENTS OF ASTROLOGY. IF THEY MADE MONEY
NO-ONE WOULD COMPLAIN BUT CAN YOU IMAGINE THE OUTCRY IF THEY LOST MONEY
AND FINANCIAL ASTROLOGY WAS INCLUDED. AGAIN NOT PROOF OF
ANYTHING. IF THE FEATURE OF GANN IS DESCRIBED AS AN ATTEMPT TO GET
CYCLICAL BEHAVIOUR AND AS KAUFMANN DESCRIBES GANN'S APPROACH AS"CONSERVE
YOUR CAPITAL AND WAIT FOR THE RIGHT TIME' I STAND BY MY ASSERTION THAN
'GANN' IS MORE ABOUT MM THAN HIS TECHNIQUE. IF YOU WATCH A RACEHORSE
AND NO OTHER RACEHORSE THEN EVENTUALLY YOU'LL SEE IT IN A RACE THAT IT CAN
RUN A PLACE AND YOU'LL PUT A BET ON AT THAT TIME.
Gann, as
you note, believed in astrology. But the point you miss isthat
his Square of 9 has nothing to do with astrology. The fact thathe
made such astrological notations on his charts has nothing to dowith
the mathematical validity of squaring price and time, or whether
or not he believed that there was an astrological basis for the
charts. One does not have to know the slightest bit about astrology,
and I don't, in order to use the techniques. The Square of 9 chart
is nothing but a square root table, which by the way, if you are
concerned about cause, one can argue is assocated with prices that
are normally distributed and that should be related by a square
relationship. To understand that astrology is not involved you will
have to understand the construction of the Square of 9. Asfar
as your rejectioin of the Square of 9 (and Gannsect) is concerned you
are offbase when you reject them on astrological grounds. And to be
sure, Gann undoubtedly used money management, as any trader does withany
system. However, going back to correlation and cause, I personally
have no problem using astrological stuff if a valid correlation can be
demonstrated. Actually, I have seen one on another board postedby a
respected trader that does give me pause whenever there is a new and full
moon.
MURPHY SAYS'GANN LINES (REFERRING
TO FAN LINES)ARE SOMEWHAT CONTROVERSIAL. EVEN IF ONE OF THEM WORKS YOU
CAN'T BE SURE IN ADVANCE WHICH ONE IT WILL BE. SOME CHARTISTS QUESTION THE
VALIDITY OF DRAWING GEOMETRIC TRENDLINES AT ALL.' AND THAT IS ALL HE
HAS TO SAY ABOUT GANN IN 500 PAGES. DRAW YOUR OWN
CONCLUSIONS.
No conclusion to be drawn.
As with Fibonacci fan lines, etc. they sometimes work and sometimes they
don't. I personally do not use them, but as you know many traders
use them all the time, presumably successfully. My conclusion about
the trendline statement is that based on the experience of the vast
majority of traders it is nonsense.
SCHWAGER DOESN'T EVEN MENTION GANN
IN 700 PAGES. READ ELDER 'TRADING FOR A LIVING" P23. REGARDING
GANNS ALLEDGED $50M...WHY ALL THE SECRET CODES, O/SEAS BANK ACCOUNTS,
KEEPING MONEY FROM FAMILY ETC...YOU'D BELIEVE A LAWYER? THAT SORT OF
BEHAVIOUR SMACKS OF PARANOIA OR AND GURUISM. IT SEEMS TO ME TO
REFLECT ON THOSE SELLING SYSTEMS AFTER HIS DEATH TO MAINTAIN GANN AS A
SEMI MYSTIC SO THEY CAN SELL A SYSTEM THAT THEY HAVE TO EXPLAIN BECAUSE IT
WAS ALL WRITTEN IN CODE.
'THE COMPLETE CRAP' COMMENT
RELATES TO USING AN APPROACH THAT IS 60 YEARS OLD, THAT CONTAINS SOME
ELEMENTS RECOGNISED AS IMPORTANT SUCH AS MM & BEHAVIOUR AND WERE AHEAD
OF HIS TIME. BUT SO WAS HENRY FORD AND LOOK WHAT OTHERS HAVE DONE TO
THE CONCEPTS SINCE.
Please try to move beyondamateur
psychology to providing solid evidence that Gann's Square of 9 (or
Gannsect) does not work. Absent your willingness or ability to
do so, you appear to be "beating the air" in an attempt to muddythe
waters and hide the fact that your opinions are
unsubstantiated. Basic Gann (Square of 9 and Gannsect) is very
simple and available in "decoded" form for any who want to learn the
techniques. These techniques, I should mention, are "decoded," as I
understand because some took the time to figure out what Gann was
doing. I agree that the weakness in using Gann is that it is 60
years old and has not changed since then. That is a valid
point, and as a result I will throw out my Japanese candlestick books
based on an essentially unchanged approach that is 350 years old. If
I live long enough, I guess MACD, RSI, etc., etc., will be old enoughto
be dumped. Probably should also throw out all the stuff about
Newton, calculus, chemistry, etc. Gads, even I have to
go! You are right, old is "crap." LOL.
But the beauty is....its your money...anyone can play
....nobody is right absolutely...
I STAND BY THIS AND WISH YOU THE
BEST. I'M NOT TRYING TO DISSUADE YOU BUT PUT A POINT OF VIEW.
I SUSPECT THAT USUALLY WHEN PEOPLE FOLLOW PERSONALISED SYSTEMS
(MEANING BASED ON PERSONALITIES) THEIR ADOPTION BEGINS TO BORDER ON A
RELIGIOUS BELIEF AND A REBEL ATTITUDE THAT SEEKS TO BE CONTRARIAN FORTHE
SAKE OF IT. THIS COMMENT IS NOT DIRECTED AT YOU SINCE I DON'T KNOW
YOU. GOOD LUCK WITH GANN BUT I WISH TOMASZ DIDN'T PUT IT IN
AMIBROKER BECAUSE IT PERPETUATES A MYTH AND CONTINUES TO LEND CREDIBILITY
TO SOMETHING THAT SHOULD HAVE BEEN INSTALLED IN THE HALL OF FAME
YEARS AGO, AND THE REST OF US HAVE MOVED ON. JUST MY OPINION OF
COURSE. YOU COULD ALSO SEE GARY SMITHS COMMENTS "HOW I TRADE FOR A
LIVING" ON P31 & 61. YOU MIGHT BE MORE ALIGNED WITH HIS
SUGGESTION OF PERCEPTUAL FILTERS. THIS IS A VIEW A LONG WAY FROM
USING GANN TO TRADE WITH.
You might try knocking Gann
with successful traders that keep Gann in their toolbox. For
starters, I suggest you contact Connie Brown and/or Bryce Gilmore and
bounce your view of Gann off them. I think you would agree thatthey
qualify as successful traders, and I am sure that they would confirm
(as they do in their books and on their websites) use of Gann in
conjunction with other stuff. Whether you contact these
traders or others, be prepared for your unsubstantiated
viewpoint to be rejected without much fanfare. I knowthat
my rejecting your viewpoint is of little consequence, but I would hope
that rejection by acknowledged traders would give you pause. As
for AmiBroker, it is stronger because it incorporates some of these tools,
and I have suggested to Tomasz that more be done along these lines.
Hopefully that will come to pass.
Finally, I do
not intend to comment further on this issue unless there is somethingof
great importance to be said. At this point, we are
going in circles, using up a lot of space, and devoting toomuch
valuable time to this issue. You or anyone else are free to
contact me offline at <A
href="">wd78@xxxx, if there is
something short of earthmoving importance to
discuss.
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color=#800080 size=2>
Cheers.
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size=2>
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