|
PureBytes Links
Trading Reference Links
|
Hi,
Yes, it is possible to extract information (make a rule) from past
prices that allows to make extra profit. Yes, the nature of the
markets (competition) would clear it out fast, but not that fast that
it happens immediately. It takes time for the prices to achieve an
equilibrium where they equalize supply and demand. Why? because time
is the mechanism used by nature to prevent things from happening all
at once. Time can be your friend as well as your enemy, depending on
whether you are involved in day-trading (gambling) or swing-trading or
longer-term trading. Yes, it would be curve fitting of data, but only
if you are constantly optimizing your parameters to changing market
conditions instead of using adaptive parameters which can adapt to any
market condition.
I use systematic trading as the foundation (framework) for my
discretionary trading architecture and I must say, I will not be
successful without a solid foundation and would literally be a fish
out of water.. My framework is extremely consistent. It is so
consistent that I do not even have to listen to news, annual reports
and questionable fundamentals, though I do make a note of the exact
time when the news or report is due, so that I can take a position
before it occurs for precise market timing. But equally important is
money management and selecting the markets appropriately which is an
inherent part of market timing. These 3, selecting the markets
appropriately (market-timing), money management and mind psychology
which is directly affected by how much money you have to work with and
selecting the markets appropriately form the discretionary trading
architecture.
rgds, Pal
--- In amibroker@xxxxxxxxxxxxxxx, Franco Gornati <francogornati@xxxx>
wrote:
> Hi Pal,
> I understand your point but the concept of efficiency, in the weak form,
> in financial markets is intended in another sense. It means that it's
> not possible to extract information (make a rule) from past prices that
> allows to make extra profit. If there were, the nature of the markets
> (competition) would clear it out very fast.
> This would make any positive backtesting result (against a benchmark and
> adjusted for the risk) a case of curve fitting.
> But the fact that both logically and empirically (with reserves) it
> seems acceptable doesn't mean it's true. So I would have liked to know
> if systematic traders, like Fred, were consistently satisfied of their
> approach.
>
> Pal Anand wrote
> >Markets are efficient, but prices are not. Prices move wherever the
> >markets lead them to in response to supply and demand. Prices tend to
> >equalize supply and demand, in order to maintain the markets
> >efficiency, ie., a free market's. But it does take time to maintain a
> >markets efficiency. During this time, a seemingly random movement of
> >the prices is a tug of war between bulls and bears responding to
> >supply and demand.
> >
> >A market that is not free is not efficient because the prices are
> >artificially controlled by a state monopoly (with no regard to profits
> >and losses except the alledged public good) and not by the competition
> >created by free market. In a fully free ("laisez-faire") market,
> >monopolies cannot exist but for a brief duration in time before other
> >producers enter the market and depress prices...
> >
> >rgds, Pal
> >--- In amibroker@xxxxxxxxxxxxxxx, Franco Gornati <francogornati@xxxx>
> >wrote:
> >> Fred wrote
> >> >Personally I prefer my braille trading system so I can "feel" it.
> >>
> >> Is it profitable? Are you doing better than the market? Don't
> >> misunderstand me, i know you are consistent in your approach so you
> >> can say better than anyone else if there is such inefficiency in the
> >> market to allow extra profits from past prices only.
> >>
> >> --
> >> Franco
> >
> >
> >
> >
> >
> >
> >Check AmiBroker web page at:
> >http://www.amibroker.com/
> >
> >Check group FAQ at:
http://groups.yahoo.com/group/amibroker/files/groupfaq.html
> >Yahoo! Groups Links
> >
> >
> >
> >
> >
> >
------------------------ Yahoo! Groups Sponsor --------------------~-->
$9.95 domain names from Yahoo!. Register anything.
http://us.click.yahoo.com/J8kdrA/y20IAA/yQLSAA/GHeqlB/TM
--------------------------------------------------------------------~->
Check AmiBroker web page at:
http://www.amibroker.com/
Check group FAQ at: http://groups.yahoo.com/group/amibroker/files/groupfaq.html
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/amibroker/
<*> To unsubscribe from this group, send an email to:
amibroker-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|