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Hi DT,
I agree with you on these issues.
I am getting a little of topic here but I think
this is an interesting subject.(I realize that I am
stating things that you already know, so I am just
writing this for interesting conversation)
Your example of the RSIobi never exeeding 50
is a perfect example of how we intuatively apply
a statistical measure to a data set. In our brain,
we somehow "sense" that the RSIobi can be used as a
boundry. We can't imperically prove the RSIobi is
about to reverse because we don't think in numbers.
Our "fuzzy" logic applies a loose rule to the data.
A computer could not "think" of this by itself.
The human looks at the data and the brain visually
"scans" for anomolies and repetitive patterns.
Then we get the idea .."Hey, perhaps if I study this
data using math...I can find a pattern or a
set of rules which work with some degree of repeatability."
It is the intstinctive way that our brain asseses the "Picture".
In your example, it would be a statistical anomoly
(an outlier) if the RSIobi exceeds 50. Therefore we
assign an intuative statistcal probability to the
chance of RSIobi going above 50 and use it as a possible
reversal sign. Sometimes, we will be wrong as you know.
Having said that, I still prefer to put these
intutions into hard code because it removes one of the prime
weaknesses thet we humans have (some more than others)which
is EMOTION. My emotions have screwed up a trade far too often.
I now try to rely totally on my system signals.
To quote a famous system trader:
Sometimes I don't use my system and try a trade on my own.
Fortunately, I don't loose enought to cause any great damage.
The I go back to my system. :-)
Have a great day,
Gosub283
--- In amibroker@xxxxxxxxxxxxxxx, "DIMITRIS TSOKAKIS" <TSOKAKIS@xxxx>
wrote:
>
> Let us make something more clear: When a person looks at a chart,
he
> describes that the market WAS trending the last x bars. Nothing
more,
> nothing less. It does not give ANY guarantee that the market will
> keep on for the next y bars. Even if you work with target prices,
you
> never know the time to reach the target.
> On the other side, it is interesting to estimate the end of a trend.
> On this sensitive subject I have some solutions, see the recent
> messages for the 6 or 12 SELL signals, they appeared on critical
N100
> points. Of course, nobody knows if someday the RSIobi will exceed
50.
> It just never did it in the last 40 months. Thatīs why I speak for
> partial profit taking . If you were already long, it would be nice
to
> take some profits. In some cases the trend was not over, another
Sell
> signal appeared some bars later. This repetition is VERY important
> and it would be better to Sell the rest open longs.
> I hope it is more clear now.
> DT
>
> > --- In amibroker@xxxxxxxxxxxxxxx, "DIMITRIS TSOKAKIS"
> <TSOKAKIS@xxxx>
> > wrote:
> > > Look for example at this 5-min ^NDX session chart.
> > > It is very close to the ideal sinusoidal, it could be the
> academic
> > > definition or a non-trendy session.
> > > We know it now. We did not have any idea 8 h ago,only guesses
> > perhaps.
> > > At the peaks of the 10-12 units range, some people buy [to
catch
> > > the "trend"] and some people sell [to define the "range"].
> > > This is the whole story [and this will be].
> > > If we characterise the session as "trading", we refer always to
> the
> > > past and we have no guarantee at all if the next session will
be
> > > extra trendy or not. We can only guess and, believe me, it is a
> > hard
> > > job that needs a lot of study...
> > > DT
> > > --- In amibroker@xxxxxxxxxxxxxxx, "gosub283" <gosub283@xxxx>
> wrote:
> > > > Hi everyone,
> > > >
> > > > I think this issue will become more important
> > > > over the next year or two.....
> > > >
> > > > When a human looks at a chart, he/she can
> > > > immediately determine if a market is in
> > > > a TRENDING mode or a RANGING mode.
> > > > It is a most amazing feat of human visual
> > > > data analysis that takes place in a matter
> > > > of seconds. Trying to get computers to "visually"
> > > > analize anything takes major computing power.
> > > > Unfotunately computers and trading system have
> > > > a much more difficult time of determining these
> > > > market modes than us humans.
> > > > Things become very "fuzzy" when trying to
> > > > put the question of "Ranging vs. Trending" into
> > > > mathamatical algorithms. And...of course.. the
> > > > trading timeframe (long term vs. short term),
> > > > make things even fuzzier. (is "fuzzier" a word ??)
> > > >
> > > > For those of us who program automated systems,
> > > > this is especialy important because it means
> > > > that we can design systems that adjust effortlessly
> > > > between ranging and trending markets. If correctly
> > > > identified, a system can use a particular set
> > > > of indicators for Ranging markets and then switch
> > > > to other indicators when a trend is determined.
> > > > Allowing for a truly autonomous system.
> > > >
> > > > Has anyone found a way to mathamatically (reliably!)
> > > > determine if a market is Trending or Ranging ???
> > > > (An AFL algorithm perhaps)
> > > > In other words, an indicator which can give direction
> > > > as to which set of indicators to use.
> > > > (A hypothetical example of such an indicator would
> > > > have a response from 0=ranging to 10=Trending )
> > > >
> > > > Cheers,
> > > > Gosub283
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