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First, for the tools that you are using you have to adjust periodicity to the time frame. With these tools, if you are going to analyze long periods of time larger periodicity should be used. It makes no sense to use a toolsuch as Fibonacci time when it is preset at a maximum number that cannot reach the end of the move, as well as being relatively insensitive at the longer times. In addition, as you change periodicity (and sometimes even markets) you will have to learn what parameters to use for the indicators. Unfortunately, I do not seem to be able to adjust the parameters for two MACDcharts independently, so in the attached daily example I only show one, but you can check the standard 12/26/9 setting versus the one below. In addition, you will have to learn what indicators work best, especially for daily and intraday trading, including a number that are not standard in AB. Also, at least in my experience, the lower the periodicity the more refined the Fibonacci and similar studies have to become, extending beyond what is currently available. For example, using standard Fibonacci time analysis from 3/24/00 to 9/1/00 produces a 1.618 time target of 5/22/01 (on target). In practice, one runs a number of such segments and looks for time clusters. Similarly, one can look for price clusters. One also needs to be able under some conditions to do the analysis with calendar days, not trading days - particularly for Gann studies, which have the advantage of being able to project from a single point. In all cases, one looks for price and time to converge in conjunction with indicator reinforcement. When that occurs you are probably at a critical point. This is not a systems approach to trading, but rather one based on line-type studies that many find work quite well.
In your example, there is no attempt to project price, just time with a relatively crude study (Fibonacci time study) that is mismatched for the periodicity and time frame chosen. Given time and price projections, appropriate use of indicators will help pick out the critical point when more than one is present, which is often the case. Most find that they have to spend afair amount of time studying various aspects of this approach, as it is not a cookbook approach to trading. So do not be surprised it you do not succeed the first time, especially if all of the required tools are not available to you. The current tools, however, are most probably OK for the type of mutual fund trading that I think Nate does, and the previous example is right up those lines. In that example, Nate would have traded 3-4 times during the year and captured a good part of the move from 120 to 34. Not bad.
Bill
----- Original Message -----
From: Dimitris Tsokakis
To: amibroker@xxxxxxxxxxxxxxx
Sent: Sunday, July 29, 2001 2:35 PM
Subject: [amibroker] NDX, Fib time and MACD
If I begin from the March 2000 High, I am quite out of April 2001 low.
(27 days and the worse thing is that the next vertical line will be much later)
If I begin from minor Sept 2000 high, I buy 5 days before April 2001 low.
(There is a simple question here: Why I have to buy? Shall I buy in any
Fib vertical line?)
As for MACD, what is the proposal?
Buy at A, sorry, a whipsaw, buy again at B, sorry, sell at C, sorry, buy
again at D and this will be your lucky time?
This is not serious.
In other words, the main problem with MACD is the well known
whipsaws which may cause a great damage, especially if you are the type
of day-trader who would risk to buy the day before.
My question for Fibonacci sequences is simple :Where is the begining of
"time". As I read, at a distinct high or law. Is this correct?
Any answer appreciated.
Best regards
Dimitris Tsokakis
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<DIV><STRONG><FONT size=2>Dimitris:</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>First, for the tools that you are using you have to
adjust periodicity to the time frame. With these tools, if you are going
to analyze long periods of time larger periodicity should be used. It
makes no sense to use a tool such as Fibonacci time when it is preset at a
maximum number that cannot reach the end of the move, as well as
being relatively insensitive at the longer times. In addition,
as you change periodicity (and sometimes even markets) you will have to learn
what parameters to use for the indicators. Unfortunately, I do not seem to
be able to adjust the parameters for two MACD charts independently, so in the
attached daily example I only show one, but you can check the standard 12/26/9
setting versus the one below. In addition, you will have to learn
what indicators work best, especially for daily and intraday trading, including
a number that are not standard in AB. Also, at least in my experience, the
lower the periodicity the more refined the Fibonacci and similar studies
have to become, extending beyond what is currently available. For example,
using standard Fibonacci time analysis from 3/24/00 to 9/1/00 producesa
1.618 time target of 5/22/01 (on target). In practice, one runs a
number of such segments and looks for time clusters. Similarly, one can
look for price clusters. One also needs to be able under some conditions
to do the analysis with calendar days, not trading days - particularly for Gann
studies, which have the advantage of being able to project from a single
point. In all cases, one looks for price and time to converge in
conjunction with indicator reinforcement. When that occurs you are
probably at a critical point. This is not a systems approach to
trading, but rather one based on line-type studies that many find work
quite well. </FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>In your example, there is no attempt to projectprice,
just time with a relatively crude study (Fibonacci time study) that is
mismatched for the periodicity and time frame chosen. Given time and price
projections, appropriate use of indicators will help pick out the critical
point when more than one is present, which is often the case. Most find
that they have to spend a fair amount of time studying various aspects of this
approach, as it is not a cookbook approach to trading. So do not be
surprised it you do not succeed the first time, especially if all of the
required tools are not available to you. The current tools, however,
are most probably OK for the type of mutual fund trading that I think Nate does,
and the previous example is right up those lines. In that example, Nate
would have traded 3-4 times during the year and captured a good part of the
move from 120 to 34. Not bad.</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<DIV><STRONG><FONT size=2>Bill</FONT></STRONG></DIV>
<DIV><STRONG><FONT size=2></FONT></STRONG> </DIV>
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=TSOKAKIS@xxxx href="mailto:TSOKAKIS@xxxx";>Dimitris
Tsokakis</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=amibroker@xxxxxxxxxx
href="mailto:amibroker@xxxxxxxxxxxxxxx";>amibroker@xxxxxxxxxxxxxxx</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Sunday, July 29, 2001 2:35 PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [amibroker] NDX, Fib timeand
MACD</DIV>
<DIV><BR></DIV>
<DIV><FONT size=2>If I begin from the March 2000 High, I am quite out of April
2001 low.</FONT></DIV>
<DIV><FONT size=2>(27 days and the worse thing is that the next vertical line
will be much later)</FONT></DIV>
<DIV><FONT size=2>If I begin from minor Sept 2000 high, I buy 5 days
before April 2001 low.</FONT></DIV>
<DIV><FONT size=2>(There is a simple question here: Why I have to buy? Shall I
buy in any </FONT></DIV>
<DIV><FONT size=2>Fib vertical line?)</FONT></DIV>
<DIV><FONT size=2>As for MACD, what is the proposal?</FONT></DIV>
<DIV><FONT size=2>Buy at A, sorry, a whipsaw, buy again at B, sorry, sell at
C, sorry, buy</FONT></DIV>
<DIV><FONT size=2>again at D and this will be your lucky time?</FONT></DIV>
<DIV><FONT size=2>This is not serious.</FONT></DIV>
<DIV><FONT size=2>In other words, the main problem with MACD is the well
known</FONT></DIV>
<DIV><FONT size=2>whipsaws which may cause a great damage, especially if you
are the type</FONT></DIV>
<DIV><FONT size=2>of day-trader who would risk to buy the day
before.</FONT></DIV>
<DIV><FONT size=2>My question for Fibonacci sequences is simple :Where is the
begining of</FONT></DIV>
<DIV><FONT size=2>"time". As I read, at a distinct high or law. Is this
correct?</FONT></DIV>
<DIV><FONT size=2>Any answer appreciated.</FONT></DIV>
<DIV><FONT size=2>Best regards</FONT></DIV>
<DIV><FONT size=2>Dimitris Tsokakis</FONT></DIV><BR><BR><TT>Your
use of Yahoo! Groups is subject to the <A
href="http://docs.yahoo.com/info/terms/";>Yahoo! Terms of Service</A>.</TT>
<BR></BLOCKQUOTE></BODY></HTML>
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