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Natasha,
I thought we ended this thread. But here we go again on an endless
quest for the elusive holy grail. You are a bit off-track there
regarding Ayn Rand. What she offerred is a philosophy of life based
on reason and *reality* as opposed to the traditional religion which
is based on faith and on the existence of a supernatural power over
man. But, "faith" is a short-circuit to knowledge and destroys your
mind. All the so called robber barrons of the the 20th century and
men like them are the personification of the men in her novels. But
that is a different subject.
Regarding holy grail, let me furnish some testimonials to explain it:
Actually, the what is a pullback what is a trend thing was a feeble
attempt at a joke. I continue to be impressed by the ability of
beginners and not-so-beginners alike to make complicated what are the
simplest concepts imaginable. And yet it goes on.
For a very long time, I held fast to my conviction that the problem
was one of simple ignorance, and that if the trader studied hard
enough and practiced long enough, he/she would eventually grasp the
difference between "up" and "down".
Occasionally, this has turned out to be the case. Far more often,
however, the trader never gets it, and I'm left with no choice but to
assume that most of these people are just plain stupid. Not ignorant.
Stupid. Oh yeah, and lazy.
As you know, I'm not a fan of indicators. I really couldn't care less
about anything but price. You think that I think that my way is the
only way, but that is not the case. Be that as it may, what bothers
me most about indicators is that so many people -- as can be
witnessed by this and the previous Woodie thread -- expect these
indicators to do everything for them from signal their entries and
exits to cure their eczema. They haven't the slightest interest in
assuming any responsibility whatsoever for their trades, much less
their trade management. And as for accountability? Hah!
At least with price alone, one is naked before the buying and selling
pressures which move price, and he has few excuses for his own
incompetence other than a lack of preparation, which technically is a
reason, not an excuse. Granted, some (many) traders who trade price
will blame "them" for their own inadequacies, but the
rationalizations tend to be fewer amongst price traders.
These Woodie people are just as screwed as the Jack people, and for
the same reasons. And as long as they continue to seek the answers
outside themselves and relinquish the responsibility for their
fortunes to indicators and patterns and systems and gurus and chat
rooms and whatever the hell else, they will continued their screwed
existence, whining all the way.
An indicator, a pattern, a system, is a tool. A tool does not work. A
tool simply is. It is the person who uses the tool who works. If
anything doesn't work, it is the person who is supposed to be doing
the work, not the tools themselves. To say the (fill in the
blank) "doesn't work" is a stupid thing to say.
Stop whining and start doing something with yourselves.
Your experiences have forced you to focus, to define your setups, to
develop a detailed trading and trade management plan, and to acquire
the discipline to see it all through. The particular indicators and
the particular setups and the particular trading plan are largely
immaterial as long as they provide you with a greater profit than
loss. There's no reason to believe that you would not do equally as
well, if not better, with different setups and a different plan,
perhaps one that didn't incorporate indicators at all. Your success,
in other words, lies within you and in what you've done to readjust
yourself to market realities.
- dbphoenix of EliteTrader
Having said all this, I believe that every method and every indicator
out there can be made profitable with the right trader. So with 600
people in Woodie's room, there are bound to be quite a number of
successful traders. It's just not as simple, nor as mechanical, as
everyone there wants to believe. The testimonials above, and my
backtesting, bears that out.
- trader416 of EliteTrader
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Quote from ChiBondKing of EliteTrader:
It may work for me NOW.. But who is to say that come November, I've
moved on to a different 'strategy' if you will. Isn't
that what this game is all about? Adapting to change?
----------------------------------------------------------------------
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Exactly. You have, in so many words, come out the other side.
Therefore, it makes no difference whatsoever what indicators
you use, or even if you don't use any at all. Nor does it matter what
system you use, whether it turns out to be mechanical or
discretionary, because you'll do what's necessary to make it
profitable.
Now, of course, you'll be swamped with Gimmees, but that's the price
you have to pay . .
- dbphoenix of EliteTrader
Trend following is basic to life. Frances Bacon noticed runs and
consolidations 400 years ago. The aim of diversification is to cancel
out the short term noise and enjoy the overall signal.
1. By definition, if you make money in the markets, you are on the
right side of a trend. No trend, no profit, period.
So it comes down to how do you get on and off a trend at the right
time, and how heavy do you bet so you don't stub out during the
corrections.
Buffett uses fundamentals ... and missed the great run up in tech
stocks. Of course, you can use many methods to miss
markets, so I don't think he has any unique ability in that area.
Mostly, Buffet has a great attitude; he has the
seemingly infinite patience, courage and humility of, well, a Warren
Buffett. Plus he has a secret advisor.
2. There are at least as many ways to approach the markets as there
are traders. I feel every successful strategy has to
exploit some or another trend.
Trend followers look for trends directly in the price (and get some
whipsaws).
Fundamentalists look to predict inevitable trends by looking at
underlying factors (and are often early and / or wrong).
Arbitrageurs and swing traders feed on small imbalances (and
sometimes find out these imbalances are just the start of
a bigger trend.)
Contrarians look to take the opposite side from the public (and
sometimes find the public just keeps the trend going and
going.)
2) Also, does a trend follower need to be in the market all the time
in order to catch the big move
2. No, he just needs to be in for the big moves, and it's also nice
to be out during choppy whipsaw markets.
3. The trend following strategy does not anticipate anything. The
trader might anticipate a top or a bottom, and stick
to his system anyway.
Well, if it's on the news, then you can bet on it. Of course, you
might very well lose your bet, or miss a good one.
Trend followers do not trade in anticipation of anything, nor do they
try to figure things out. They simply go with the trend.
Figuring-out and anticipating events are things that fundamentalists,
and weathermen do. They engage the processes of analysis and
anticipation, with similar results. The best ones learn simply to
predict the trend will continue for a while.
Long-term trading has an advantage, in that the transaction costs are
small relative to the average move. Some traders might find it
difficult to sit tight through prolonged corrections.
Sounds like you are coming around to the idea of trading moves,
rather than markets. Some traders hold on to a position,
and keep changing their systems to fit it - other traders hold on to
their systems and keep changing their portfolios to
fit it.
Most markets creep along most of the time and then make a nice move,
sooner or later.
- Ed Seykota
Quote from bsd23:
"This sort of brings up what I consider the two most fundamental
questions.
1) Do trends exist? This is as important a question as "does Free
Will exist", because if trends do not exist, then
everyone except the statistical anomalies are going to lose money -
and we should all quit and just buy lottery tickets.
2) Do trends have a gaussian distribution? If so, then you can wait
for a trend to emerge and become obvious before you
get on it. Since most trend runs will land in the middle of the
distribution, your best bet will always be that you are
only halfway through the run. The longer it has gone, the more likely
it will be to continue. I think I read this in
Mandlebrot's recent "The (mis)behavior of markets".
If these two things are true, we should be able to make money. If
not, we will not be able to. We can only take what the
market gives us, and if nothing is given, there is nothing to take."
The chief reason why so many people find this difficult is that they
want to catch the very tick of the turn. But that's the trader's
problem, not the market's.
Of course, it's axiomatic that one "believe" in trend in order to
trade it. Otherwise, there's no point. - dbphoeix of EliteTrader
Somebody also said that a paint brush in our hands is just a tool,
but in the hands of a monet, it is virtually priceless.
We by nature are gamblers and trend-following is just the opposite....
-- forex_king of EliteTrader
By the way, I should mention that all (profitable) systems are trend-
following. The only difference is whether you catch the trend when
it is just starting or when it is in full swing.
Hope this helps.
rgds, Pal
--- In amibroker@xxxxxxxxxxxxxxx, Natasha !! <dynomitedoll_ddd@xxxx>
wrote:
> Hi Pal,
>
> > I would like to apply the exact science to
know about the holy grail as an interested party in this business of
investing .I have come across this grail on numerous occasions as a
holy grail system ,holy grail indicator,holy grail trading
platform,or just simply the holy grail.The exact characteristics of
the grail are missing and the main aim of most investors on any
trading platform seems to be to hunt for the holy grail. A search of
the Bible, which i believed would give me some sort of clue the grail
being holy, by a google search from page to page on various different
copies on different websites did not give me any mention of the holy
grail and i think nowhere is the grail mentioned in the bible.
> Ayn Rand as like all the rest has just made a mention of
the holy grail in her novels.Nowhere has she defined it.Her books
were published in the late fifties and as of date i have never yet
come across any living being who has lived up to her primary
characters either in the methods of creating wealth or in her brand
of capitalism.My personal opinion is that she has put far too much
faith in the goodness of man and her books are hyped more on hope and
dreams for mankind and a utopian world than on reality.(The closest
she came to reality was in "The virtue of selfishness").
> I found these statistics on a website called
warrenbuffettsecrets: In 47 years, Buffett's investment company,
Berkshire Hathaway has achieved returns of 259,485% versus the S&P
500 returns of 4,783%. The difference in results is an astonishing
254,747%!
> Thats the main reason i responded to the holy grail
question asked by Mr Davis under this subject . Does the holygrail
connote unlimited riches beyond the dreams of avarice.Are these
riches in monetary terms or living in a castle or in some luxurious
villa in tahiti as was mentioned by some on this group or is it
simply a new way of life or something else and what is the price to
be paid for it.Do we after attaining it become a king Midas who
finally turned his daughter into gold.Newtons laws say for every
action there is an equal and opposite reaction .Is that reaction
sleepless nights, big drawdowns,loss in reputation or is it some of
what is mentioned above. I would be interested if someone finds out
what is exactly meant by the holy grail.Any website, book,pamplet
giving formation or any investors personal opinions.I mean we are all
after the grail.
>
> Meanwhile i am back to using the exact sciences for my
trading activities.
> Have a nice weekend.
> Warm regards,
> Natasha !
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