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Re: [amibroker] Re: Scan for Bulkowski's chart patterns



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"Theorize, and then test the theory for validity."

If you want to play in the trading world's "scientific method sandbox," propose a falsifiable hypothesis and let all chew on it.  

Bill

----- Original Message ----- 
From: "sebastiandanconia" <sebastiandanconia@xxxxxxxxx>
To: <amibroker@xxxxxxxxxxxxxxx>
Sent: Saturday, October 21, 2006 11:10 AM
Subject: [amibroker] Re: Scan for Bulkowski's chart patterns


> "...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" <the_bear_98@xxx> 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@xxx
>>   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
>>   > > > > > >
>>   > > > > > >
>>   > > > > > >
>>   > > > > > >
>>   > > > > > >
>>   > > > > >
>>   > > > > >
>>   > > > > >
>>   > > > >
>>   > > >
>>   > > >
>>   > > >
>>   > > >
>>   > >
>>   >
>>   >
>>   >
>>   >
>>
> 
> 
> 
> 
> 
> 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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