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Ok Server, you sucked me, but not to respond toyour
unsubstantiated claims about Gann that you continue to try to wiggle out
of.
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----- Original Message -----
<DIV
>From:
server
not recognized
To: <A title=amibroker@xxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Friday, May 25, 2001 9:06 AM
Subject: Re: [amibroker] Vertical
Lines
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 mountainof
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 showit
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 screwthe
little guys who never change the defaults in Metastock.
The square property you try and ascribe to normal
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.
The Black-Scholes model of option
pricing is based on a normal (random walk) distribution of price
movements. Random walk (Brownian motion) models result
in an expected price excursion that varies with the square rootof
time. Over time, stock price movement have been shown to randomly
distributed, so the fact that the square root factor pops up in both theory
and practice is not surprising. So to directly address your comment,
prices are probably not log normal distributed. I have not read theMIT
studies for sometime, but I believe that was their conclusion
also.
To completely ignore that since 1950 a HUGE amount oftime
(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 time as
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 orshow
promise, rather than seek a Holy Grail indicator. Since Gann died what
developments have there been? Connie notwithstanding. Mockingmy
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
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----- Original Message -----
<DIV
>From:
wavemechanic
To: <A title=amibroker@xxxxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Friday, May 25, 2001 11:44
AM
Subject: Re: [amibroker] Vertical
Lines
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>
From: <A
title=winchp@xxxx href="">server
not recognized
<BLOCKQUOTE
>
<BLOCKQUOTE
>
To: <A
title=amibroker@xxxxxxxxxxxxxxx
href="">amibroker@xxxxxx
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 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 Gann is
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 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 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 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'sits
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 problemis
mixing up correlation with cause. There is nothing you or Iuse
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 Hersheyfor
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 POSTERSWERE
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. 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 MMwill
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 THERE IS 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 CANYOU
IMAGINE THE OUTCRY IF THEY LOST MONEY AND FINANCIAL ASTROLOGY WAS
INCLUDED. AGAIN NOT PROOF OF ANYTHING. IF THE FEATUREOF
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 RUNA
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 haveto
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 faras
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
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 EVENMENTION
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 THEYCAN
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 beyond
amateur psychology to providing solid evidence that Gann's Squareof 9
(or Gannsect) does not work. Absent your willingness or
ability to do so, you appear to be "beating the air" inan
attempt to muddy the 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 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, oldis
"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 DIRECTEDAT
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 HAVEBEEN
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 surethat
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
are free to contact me offline at <A
href="">wd78@xxxx, if thereis
something short of earthmoving importance to
discuss.
<FONT
color=#800080 size=2>
Cheers.
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