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Hi Yuki,
Thanks for your comments.
I agree with you completely. However....
What I'm really looking for is what people found
to be the best indicator to help identify the
current situation (not the future).
I was basicaly throwing out a question to everyone to
see if anyone has had better success than me when
developing a transitional system that identifies
when it is necessary to change to a different indicator.
I have had success with such a system. The problems
arise during the transition phase from Trading to Trending.
(Some losses due to ambiguity/confusion.)
Once the transition is completed and the system automatically
changes to the appropriat indicator, it works fine.
I was trying to see if anyone else had played with this
and perhaps found a better way.
I am familiar with many indicators which can help with this
but I'm always open to others.
Jayson was very helpfull in pointing out the R-Squared and
Twiggs-Money Flow.
Thanks again,
gosub283
--- In amibroker@xxxxxxxxxxxxxxx, Yuki Taga <yukitaga@xxxx> wrote:
> Hi gosub283,
>
> Thursday, March 27, 2003, 2:08:16 AM, you wrote:
>
> g> When a human looks at a chart, he/she can immediately determine
if
> g> a market is in a TRENDING mode or a RANGING mode. It is a most
> g> amazing feat of human visual data analysis that takes place in a
> g> matter of seconds. Trying to get computers to "visually" analize
> g> anything takes major computing power. Unfotunately computers and
> g> trading system have a much more difficult time of determining
> g> these market modes than us humans.
>
> I am not so sure humans do a much better job of this analysis than
do
> computers. When we look at charts, we are looking at 100 percent
> history. It is indeed rather easy to "segment" this history into
> trending and ranging periods using analytical abilities. Yes, it
> does happen in seconds, and seems almost effortless.
>
> However, the most important time period for any trader is that
period
> of time which is NOT VISIBLE on the chart -- namely, the future. We
> can "see" the ranging and trending periods, but only in retrospect,
> where our minds make nice, neat visual categories for us based on
> what we *see*. But at the "real time" turning points, when the
> actual transition is in the future, out of sight, I doubt if either
> human or computer can reliably identify these transitions in
advance.
> (Reliably to me would be with some statistical edge that clearly
> beats random guessing.)
>
> In hindsight, it is all so clear of course -- so clear that it is
> tempting to believe that one can find some mathematical formula that
> will reveal all. But this is a sect in the cult of "Holy Grail-ism"
> in my opinion. To test my theory that human beings are not any
better
> at identifying the transitions in "real time" than computers, scroll
> a chart very slowly (bar by bar) from left to right, with the future
> always off the screen, just as in real life. Make sure the chart is
> a completely unknown issue or index, and preferably one with the
> dates entirely removed or obscured (to do this test correctly
someone
> else will probably need to set up a blind test for you, I don't
think
> you can truly set up a valid blind test yourself). Now see
how "good"
> your human brain is at identifying the transitions in "real time".
> And good luck! ^_-
>
> Yuki
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