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If its all the same to you I'll have the last word.
You've obviously decided and your mind is made
up and Gann is for you. Fine. So don't pretend all I have to do is show a
table of result comparisons. We both know that even if I were inclined I'd
have to run every indicator known to man in every conceiveable scenario with
Gann finishing last to convince you. Its disengenious of you to
suggest all I'd have to do in one apparently innoccous sentence. If I
showed only one occassion where anything was better than Gann it wouldn't mean
anything. To develop the statitiscs to demonstrate that Gann's
inferiority was statistically significant we both know is a mountain of
work.
OTOH as you mention candlesticks, Japanese
candlesticks HAVE been assessed and the markets HAVE changed and the classical
reponses HAVE changed. It doesn't invalidate candlesticks, just changes
how you have to work with them. This is a lot easier to prove. Amibroker
can show it now if any care to look. In fact fading the classic indicators is
more likely just as the MACD(26,12) artifact is used by professional traders to
screw the little guys who never change the defaults in
Metastock.
The square property you try and ascribe tonormal
distribution of prices is incorrect, prices are probably log normal. They
also have long memory (hurst et al). So its at best an approximation -
which is OK so long as its borne in mind while using it.
To completely ignore that since 1950 a HUGE amount
of time (read $) has been spent on time series analysis, and just about anything
else that walks, to make trading systems that work. Normal folk manage by
rotating through indicators/oscillators and time constants slowly with timeas
tried and true lose their effectiveness. Most have a select group for
primary work and maintain a stable of those in waiting that could work or show
promise, rather than seek a Holy Grail indicator. Since Gann died what
developments have there been? Connie notwithstanding. Mocking my
comments about age is not arguement. You are suggesting that in 2050 Gann
as-is will be used, 2150 etc. The fact Connie spent a whole chapter trying
to condense the ramblings of Gann, and she's spent a career on it, from which
you pick two simple ideas, should be warning enough that traders shouldn't waste
time with Gann looking for the hidden secret. A secret powerful enough to
need to be coded and hidden away. The secret isn't there. You've
probably extracted about as much as is worth using - a technique and
MM.
Enough for now. I hope this discussion has
provoked some thought from others at least. While not about Amibroker,it
is about trading, and some of the power of Amibroker can be used to check some
of the flakier ideas out fast without wasting time.
In the meantime I'm sure if something you deign is
earth moving happens, worth discussing and of great importance you'll
tell us.
P
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
wavemechanic
To: <A title=amibroker@xxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Friday, May 25, 2001 11:44 AM
Subject: Re: [amibroker] Vertical
Lines
<BLOCKQUOTE
>
From: <A title=winchp@xxxxxxxxxxxx
href="">server not recognized
<BLOCKQUOTE
>
<BLOCKQUOTE
>
To: <A
title=amibroker@xxxxxxxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Thursday, May 24, 20017:49
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
OUT when it doesn't go you way from the start. I'm my own worst
adherent of this one. Why is it so important to be able to
get a time and price from a single high or low? Would anybody
seriously invest 5% 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 Gannis
just one of many tools, and like Fibonacci is used as a heads up
indicator. I do not invest on the basis of any single
indicator. And yes, money management is important, but I liketo
start with the best indicator base that I can
find.
WE AGREE.
I've had a go at Gann and the problem is for me
that its not IMNSHO even as useful as my favourite P&F. Not
only 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 ata
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 mixing up
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 not
seen 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 <A
href="">www.deja.com and and see Hershey for
example.
Most, like yourself, donot
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, aswell
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. 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 nature of
the tool/indicator/oscillator/chicken entrails coupled with MM willdo
the trick more than GANN.
Well as noted above, weagree
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 withus,
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 THERE IS
NOTATION SHOWING PLANETARY MOVEMENT...'. KAUFMANNS NEXT TOPICIS
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. IFYOU
WATCH A RACEHORSE AND NO OTHER RACEHORSE THEN EVENTUALLY YOU'LL SEEIT
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 is
that his Square of 9 has nothing to do with astrology. The fact
that he made such astrological notations on his charts has nothing
to do with 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. As far 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 with any 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 posted by 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 sometimesthey
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 OTHERSHAVE
DONE TO THE CONCEPTS SINCE.
Please try to move beyond
amateur 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 muddy the waters and hide the fact that your opinions
are unsubstantiated. Basic Gann (Square of 9 and Gannsect) isvery
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 enough
to 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 FOR THE 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
that they 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 know
that 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 something
of great importance to be said. At this point, we are
going in circles, using up a lot of space, and devoting too
much valuable time to this issue. You or anyone else arefree
to contact me offline at <A
href="">wd78@xxxx, if there is
something short of earthmoving importance to
discuss.
<FONT
color=#800080 size=2>
Cheers.
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