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You bring up a good point,and one which would tell people to spend more time learning to trade and understanding markets/humans than testing systems.I would say that almost all new traders employ stochastics,but how many of them actually understand what stochastic actually is??
Allan
----- Original Message -----
From: sebastiandanconia
Date: Saturday, October 21, 2006 1:09 pm
Subject: [amibroker] Re: Scan for Bulkowski's chart patterns
To: amibroker@xxxxxxxxxxxxxxx
> I wasn't really talking about useless, lofty metaphysical or
> philosophical "whys", but practical ones.:) TA-based indicators can
> be heavily lagged or even fail outright just like economic and
> fundamental ones, which is the reason the "why" is so important.
>
> For example, Jerry said he's been using triangles successfully for
> years. Why do they work? Because they capture a repeating market
> behavior, the tendency of momentum in a particular direction to
> continue. Deeper down, they capture a repeating psychological
> behavior, the unwillingness of certain traders to quickly accept that
> they're wrong. Their slow, gradual acceptance is what maintains a
> trend, and when they're finally all convinced, the trend ends.
>
> My point is that unless a trader understands the underlying principles
> of why something works he may just be following a bogus system that
> works for a while, but will eventually screw him. I'm sure that you
> and other careful, conscientious traders here get this, but not
> everyone reading these posts does.
>
>
> Luck,
>
> Sebastian
>
> --- In amibroker@xxxxxxxxxxxxxxx, "Fred" wrote:
> >
> > While I would agree that for the most part indicators and
> systems are
> > not the cause of price action, imho good indicators and
> systems are
> > designed to recognize high probabilty realities burried in
> noise ...
> > As far as the why's are concerned ... I already know a myriad
> of
> > reasons it's not like all economic and fundamental data which
> by
> > their nature lag not only reality but price as well. One
> could spend
> > a lifetime looking for the answers to the why's and never
> derive
> > anything useful for trading / investing. As a result I'll
> leave the
> > why's to the philosophers and concern myself with the when's
> and the
> > what's.
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "sebastiandanconia"
> > wrote:
> > >
> > > "...I suggest it is not due to limitations of our equipment,
> but
> > simply
> > > a system that is no good as it is explained..."
> > >
> > > That's precisely the conclusion I've come to, and it's all
> Tomasz's> > fault for building AB and making such testing possible.:)
> > >
> > > If I can strain your chess analogy a little bit, the edge that
> > > grandmasters have is that, of all the potential moves
> available to
> > them
> > > they can quickly recognize the critical ones and focus on them,
> > > excluding all the others as unimportant "noise."
> > >
> > > As traders, that's what I think we should aspire to. A
> stock
> > doesn't go
> > > up because a 5-day EMA crosses above a 20-day EMA or because the
> > > directional movement index is positive and the ADX is
> greater than
> > 30.
> > > Those indicators coincide with the stock's uptrend but
> aren't the
> > cause.
> > > Neither is the cause to be found in linear regression, Gann
> angles,> > Fibonnaci numbers, etc. What is the cause, then?
> Theorize, and
> > then
> > > test the theory for validity. That's when we can start to learn
> > > something. Otherwise, all we're doing is testing random
> data for
> > > patterns that are only meaningless coincidences, like the
> Superbowl> > Theory.
> > >
> > > And that's enough sermonizing from me.:)
> > >
> > >
> > > Luck,
> > >
> > > Sebastian
> > > --- In amibroker@xxxxxxxxxxxxxxx, "M Webb" wrote:
> > > >
> > > >
> > > > In the old days, programming a computer to play chess and
> capture
> > the
> > > mind of a Grandmaster, with the instant "pattern
> recognition" they
> > > possessed was very difficult. It took many years before the
> > combination
> > > of computing power and programming finally got rolling. Now
> we have
> > > programs that will beat you like a borrowed mule. It is easy
> to
> > grade
> > > these programs as they have ratings that prove how good they
> are.
> > During
> > > this same time frame, we now have the computers and
> programming to
> > > really back-test and prove a trading theory might have
> worked in the
> > > past. We can go buy a book, program it, and discover it
> doesn't
> > produce
> > > a reward/risk worth trying at all. Now in the old days, the
> > Grandmaster
> > > would say "I only think one move ahead, but it is always the
> best
> > move."
> > > We found a way to mostly brute force find the same move, but
> when
> > we try
> > > to program one of the successful traders systems, the back-
> test
> > does not
> > > pan out. I suggest it is not due to limitations of our
> equipment,
> > but
> > > simply a system that is no good as it is explained.
> > > >
> > > > Although it might be theoretically possible to combine two
> losing> > systems with a magic ranking process that could
> produce an overall
> > > winner, I feel safe in saying no one can come up with an
> example
> > they
> > > would share.
> > > >
> > > > Monty
> > > >
> > > > ----- Original Message -----
> > > > From: allansn@
> > > > To: amibroker@xxxxxxxxxxxxxxx
> > > > Sent: Friday, October 20, 2006 12:44 PM
> > > > Subject: Re: [amibroker] Re: Scan for Bulkowski's chart
> patterns> > >
> > > >
> > > >
> > > > Just out of curiousity,is it possible to have two non
> correlated> > trading techniques that show negative backtest
> results
> > individually,but
> > > when combined produce above average returns...
> > > >
> > > > I am over in Elite trader observing a candlestick
> debate,and
> > trying
> > > to understand how "savvy" traders who fully acknowledge that
> > > candlepatterns fail miserably in backtests insist that they
> are a
> > great
> > > confirming indicator..
> > > >
> > > > Is there a method to this madness??
> > > >
> > > > Allan
> > > >
> > > >
> > > >
> > > > ----- Original Message -----
> > > > From: sebastiandanconia
> > > > Date: Friday, October 20, 2006 10:33 am
> > > > Subject: [amibroker] Re: Scan for Bulkowski's chart patterns
> > > > To: amibroker@xxxxxxxxxxxxxxx
> > > >
> > > > > I've read about this kind of behavior before, and it's
> a
> > problem
> > > for
> > > > > anyone who is trying to emulate the methods of
> successful (or
> > > > > allegedlysuccessful) traders. What is happening is
> that these
> > > > > traders aren't
> > > > > fully conscious of everything in their decision-making
> > process.
> > > There
> > > > > are "soft" factors that are key to their success that
> AREN'T
> > in
> > > their
> > > > > "written down" or "official" methods. And if every
> factor
> > isn't
> > > > > included the method can't be accurately tested for validity.
> > > > >
> > > > > JMO, but I suspect that's one of the reasons it's so
> > difficult for
> > > > > traders to duplicate the success of even legitimate,
> well-
> > meaning
> > > > > system-sellers or "gurus." Maybe they really know something
> > > > > unique, or
> > > > > maybe they just had a run of luck when their "fuzzy"
> thinking> > > > paid off
> > > > > but that particular set of conditions won't ever be
> repeated.> > > >
> > > > >
> > > > > Luck,
> > > > >
> > > > > Sebastian
> > > > > --- In amibroker@xxxxxxxxxxxxxxx, allansn@ wrote:
> > > > > >
> > > > > > Hi Jim,
> > > > > >
> > > > > > What I find interesting about various pattern recognitions
> > > > > such as Edwards and Magee type formations and
> candlesticks is
> > > > > when you
> > > > > backtest them in isolation they simply show no predictive
> > > > > power.I am
> > > > > predominantly refferring to Candlesticks as I have
> done
> > extensive
> > > > > testing in that area.
> > > > > >
> > > > > > Yet,I have friends who strictly trade off them with
> western> > price
> > > > > patterns and trendlines and return well over 50% annually.
> > > > > >
> > > > > > Others I know use them as a filter to their systematic
> > > trading,and
> > > > > they know full well that Candlesticks do not backtest
> well.But> > > > they wont
> > > > > trade without them
> > > > > >
> > > > > > Interesting how the mind works
> > > > > >
> > > > > > Allan
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > > ----- Original Message -----
> > > > > > From: jwmc107
> > > > > > Date: Thursday, October 19, 2006 7:48 pm
> > > > > > Subject: [amibroker] Re: Scan for Bulkowski's chart
> patterns> > > > > To: amibroker@xxxxxxxxxxxxxxx
> > > > > >
> > > > > > >
> > > > > > > Hi Joe, Brian, Alan and others,
> > > > > > >
> > > > > > > Here are Tom's trading results:
> > > > > > > Year 2000 2001 2002 2003 2004 2005
> > > > > > > Tomas 14.80% 18.70% 9.00% 13.50% 29.10% 15.40%
> > > > > > > S&P500 -10.10% -13.00% -23.40% 28.69% 10.88% 4.91%
> > > > > > > Nasdaq -39.30% -21.10% -31.50% 50.00% 8.60% 1.40%
> > > > > > > DJIA -6.20% -7.10% -16.80% 28.28% 5.31% 1.72%
> > > > > > >
> > > > > > > The results speak that the system works. Hope that
> > someone can
> > > > > > > make
> > > > > > > the code available, as I dont have any programming skill
> > > myself.
> > > > > > >
> > > > > > > There are WL codes available, we can just
> translate it to
> > AFL.
> > > > > > >
> > > > > > > Regards,
> > > > > > > Jim
> > > > > > >
> > > > > > > --- In amibroker@xxxxxxxxxxxxxxx, "Joe Landry" wrote:
> > > > > > > >
> > > > > > > > Allan
> > > > > > > > I had to think back a bit. Well I'm schiz'ed, a
> > > > > > > fundamentalist
> > > > > > > and a technician. Making money on fundamentals right
> > > > > > > now(Validea)
> > > > > > > but I know what
> > > > > > > > will preserve it is technical analysis.(or risk
> > management?)
> > > > > > > >
> > > > > > > > What might be an interesting side note, we had Nelson
> > > Freeburg
> > > > > > > of
> > > > > > > Formula Research give a talk to us last Sat. and
> > > > > > > > he related as to how his first investment book
> while he
> > > > > was at
> > > > > > > Columbia was Martin Pring's early TA book. This
> led to his
> > > > > > > development of a first "system" called Primas
> (Pring
> > Moving
> > > > > > > Average
> > > > > > > System). I've got a cam video of his talk on our
> server,
> > let
> > > > > > > me
> > > > > > > know if you'd like to down load it.
> > > > > > > >
> > > > > > > > Best regards
> > > > > > > > JOE
> > > > > > > > ----- Original Message -----
> > > > > > > > From: allansn@
> > > > > > > > To: amibroker@xxxxxxxxxxxxxxx
> > > > > > > > Sent: Thursday, October 19, 2006 7:53 AM
> > > > > > > > Subject: Re: [amibroker] Re: Scan for
> Bulkowski's chart
> > > patterns
> > > > > > > >
> > > > > > > >
> > > > > > > > Joe,
> > > > > > > > I am shocked...I never would have taken you for a
> > > > > > > closet "Edwards and Magee" man :)
> > > > > > > >
> > > > > > > > Allan
> > > > > > > >
> > > > > > > > ----- Original Message -----
> > > > > > > > From: Joe Landry
> > > > > > > > Date: Thursday, October 19, 2006 8:15 am
> > > > > > > > Subject: Re: [amibroker] Re: Scan for
> Bulkowski's chart
> > > patterns
> > > > > > > > To: amibroker@xxxxxxxxxxxxxxx
> > > > > > > >
> > > > > > > > > I just dusted it off Dimitris' program again
> and was
> > > > > > > stepping
> > > > > > > > > through the
> > > > > > > > > selections.
> > > > > > > > > If you're not familiar with it you might want
> to
> > check out
> > > > > > > > > Anthony
> > > > > > > > > Faragasso's charting script
> > > > > > > > > as labelled below and in the program library.
> It's a
> > good
> > > > > > > > > companion for this
> > > > > > > > > exploration.
> > > > > > > > >
> > > > > > > > > I tried my hand at on of his most successful
> patterns> > > > > > called
> > > > > > > > > "pipes" but was
> > > > > > > > > not happy with the results.
> > > > > > > > >
> > > > > > > > > BTW Bulkowski has a newer paperback called
> Getting
> > Started
> > > > > > > in
> > > > > > > > > Chart Patterns
> > > > > > > > > pub within
> > > > > > > > > the last year.
> > > > > > > > >
> > > > > > > > > As far as Thomas is concerned, I would be a
> potential> > > > > > customer
> > > > > > > > > for a set of
> > > > > > > > > Bulkowski pattern recognition
> > > > > > > > > routines if such were to be produced and put
> up for
> > sale.
> > > > > > > > >
> > > > > > > > > Best regards
> > > > > > > > > JOE
> > > > > > > > > SECTION_BEGIN("Pattern Recog. Tony Farragasso");
> > > > > > > > >
> > > > > > > > > // Name and Purpose -----------------
> Faragasso
> > Pattern
> > > > > > > > > Recognition -----------------
> > > > > > > > >
> > > > > > > > > // Date 11/23/03
> > > > > > > > >
> > > > > > > > > // Source Anthony Faragasso
> > > > > > > > >
> > > > > > > > > // Type Indicator, Exploration, AB PT
> > > > > > > > >
> > > > > > > > > // Patterns Wedge, Broad, Upchannel, Bearish.
> > > > > > > > >
> > > > > > > > >
> > > > > > > > > ----- Original Message -----
> > > > > > > > > From: "brian.z123"
> > > > > > > > > To:
> > > > > > > > > Sent: Thursday, October 19, 2006 12:50 AM
> > > > > > > > > Subject: [amibroker] Re: Scan for Bulkowski's chart
> > > patterns
> > > > > > > > >
> > > > > > > > >
> > > > > > > > > > Hello Jim,
> > > > > > > > > >
> > > > > > > > > > Do you mean the chart patterns from Bulkowskis
> > > > > > > encyclopedia
> > > > > > > > > (over 60
> > > > > > > > > > patterns)?
> > > > > > > > > >
> > > > > > > > > > If you want to code them in AFL some have
> been done
> > by
> > > > > > > Dmitiris
> > > > > > > > > > Tsokaki! s (Hello Dimitris, I hope the fish
> are
> > jumping
> > > > > > > into
> > > > > > > your
> > > > > > > > > > boat)....from the AFL library.
> > > > > > > > > >
> > > > > > > > > > Formula name: Pattern Recognition Exploration
> > > > > > > > > > Author/Uploader: Dimitris Tsokakis -
> tsokakis [at]
> > > oneway.gr
> > > > > > > > > > Date/Time added: 2001-09-03 14:03:35
> > > > > > > > > > Origin:
> > > > > > > > > > Keywords:
> > > > > > > > > > Level: medium
> > > > > > > > > > Flags: exploration
> > > > > > > > > >
> > > > > > > > > > DISCLAIMER: Most formulas present in AFL on-line
> > > > > library are
> > > > > > > > > > submitted by the users and are provided here
> on
> > an "as
> > > > > > > is"
> > > > > > > and "as
> > > > > > > > > > available" basis. AmiBroker.com makes no
> > > > > representations or
> > > > > > > > > > warranties of any kind to the contents or
> the
> > operation
> > > > > > > of
> > > > > > > material
> > > > > > > > > > presented here. We do not maintain nor
> provide
> > technical
> > > > > > > > > support for
> > > > > > > > > > 3rd party formulas.
> > > > > > > > > >
> > > > > > > > > > Download formula file | Delete formula
> > > > > > > > > >
> > > > > > > > > > Description:
> > > > > > > > > > Paste the code in Automatic Analysis and
> Explore All
> > > > > > > Stocks
> > > > > > > > > for the
> > > > > > > > > > last date of your data.
> > > > > > > > > > In Results click twice a label , for example
> "a TR"
> > and
> > > > > > > you
> > > > > > > will
> > > > > > > > > > collect all ascending Triangles marked with
> an "1".
> > > > > > > > > > This Exploration recognizes the following
> patterns:> > > > > > > > > +Ascending Wedges "aW"
> > > > > > > > > > +Descending Wedges "dW"
> > > > > > > > > > + ascending Triangles "a TR"
> > > > > > > > > > +descending Triangles "d TR"
> > > > > > > > > > +ascending channel "a ll"
> > > > > > > > > > +descending channel "d ll"
> > > > > > > > > > +almost horizontal channel "ll"
> > > > > > > > > > +Converging Support and Resistance
> > > > > > > > > > +Diverging Support and Resistance
> > > > > > > > > > +N/A, ie examples not belonging to any above
> > category.
> > > > > > > > > > You may decrease sensitivity, changing
> > > > > > > > > > per=3;
> > > > > > > > > > with another percentage higher than 3.
> > > > > > > > > > For Indicator Builder paste the code in Comments
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > > It would be an interesting project to code
> all of
> > the
> > > > > > > major
> > > > > > > patterns
> > > > > > > > > > (if it hasn'! t been d one already).
> > > > > > > > > >
> > > > > > > > > > There is also a formula there for
> identifying candle
> > > > > > > patterns
> > > > > > > > > by Top
> > > > > > > > > > Gun Herman van den Bergen....
> > > > > > > > > >
> > > > > > > > > > Converting candles to bar chart patterns
> would be
> > > another
> > > > > > > > > > interesting project.
> > > > > > > > > > I'll do both projects if I run out of things
> to do.
> > > > > > > > > >
> > > > > > > > > > I haven't tried either of the formulas....I
> just
> > noticed
> > > > > > > them there
> > > > > > > > > > the other day so passing it on to you.
> > > > > > > > > >
> > > > > > > > > > BrianB2.
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > > --- In amibroker@xxxxxxxxxxxxxxx, "jwmc107" wrote:
> > > > > > > > > >>
> > > > > > > > > >>
> > > > > > > > > >>
> > > > > > > > > >> Is there any AFL code to scan for
> Bulkowski's chart
> > > > > > > patterns and
> > > > > > > > > > to
> > > > > > > > > >> share with?
> > > > > > > > > >>
> > > > > > > > > >> Thanks,
> > > > > > > > > >> Jim
> > > > > > > > > >>
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > > Please note that this group is for
> discussion
> > between
> > > > > > > users
> > > > > > > only.
> > > > > > > > > >
> > > > > > > > > > To get support from AmiBroker please send an
> e-mail
> > > > > > > directly
> > > > > > > to
> > > > > > > > > > SUPPORT {at} amibroker.com
> > > > > > > > > >
> > > > > > > > > > For other support material please check also:
> > > > > > > > > > http://www.amibroker.com/support.html
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > > Yahoo! Groups Links
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
> > > > > > > > > >
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> > > > >
> > > > >
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> > > > >
> > > >
> > >
> >
>
>
>
>
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