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It depends on your own psychology. Whether you believe in mean
reversion, or whether you believe price is a train, and how strongly,
will dictate what is easier for you.
This is the basic dichotomy: mean-reversionists versus "price is a
train" people.
And of course both are right; just never at the same time.
Yuki
Thursday, May 8, 2008, 2:50:32 PM, you wrote:
s> Which is more psychologically threatening?
s> 1. Catching a train by running with it and hopping on board?
s> or
s> 2. Standing in front of the train and hoping it stops to allow you on
s> board, knowing very well that you could be on the wrong part of the
s> track and it runs you over instead?
s> #1 requires agility. But it's psychologically easy to do.
s> #2 requires emotional fortitude. It's psychologically difficult to
s> accept.
s> --- In amibroker@xxxxxxxxxxxxxxx, Yuki Taga <yukitaga@xxx> wrote:
>>
>> Gee, then I guess I should give back my ~20 percent a year that is
>> largely based on short-term momentum swings, yes? (I'm sitting plus
>> 13 percent YTD this year already, as of yesterday, versus -9.3
>> percent for my Nikkei 225 benchmark.)
>>
>> You do have to be agile however. And you cannot overstay your
>> welcome. But the money is there for momentum systems if designed
>> and tested properly.
>>
>> "Support" exists, but everyone knows where it is. Exactly where it
>> is. And somebody (I'll leave it to you to guess who) is going to
>> ring the bell and tell you that (resistance failed) or (support
>> failed). What are you going to do, then? You're going to stop
>> yourself out of course. With a loser.
>>
>> Which is likely to be more profitable, and for a longer period of
>> time? Systems that compel you to do the psychologically difficult,
>> or systems that suggest that you do the patently obvious?
>>
>> Is there anyone beyond 7th grade that doesn't know where support and
>> resistance is? Are there great systems that rely on widely known
>> community knowledge?
>>
>> Look for a system that has good metrics, but a system that also
>> suggests that what you need to do will be psychologically difficult
>> for you to do, in spite of having back-tested results indicating
s> that
>> you are foolish if you *don't* do it. Then you are good to go, as
>> they say. Good to go as long as you do it, of course.
>>
>> If your system is easy to follow (by that, I mean that it's
>> psychologically easy for you to make the trades), it's probably a
>> loser. And vice-versa. The best systems have good metrics, yet
>> despite that they almost defy the trader (psychologically) to make
>> the trades. There is no free lunch.
>>
>> Yuki
>>
>> Thursday, May 8, 2008, 11:50:01 AM, you wrote:
>>
>>
>> s> Anthony,
>>
>> s> Do yourself a big favor. Don't waste your precious time on this
>> s> earth with this kind of drivel. Chasing price with momentum
>> s> indicators is not going to get you where you want to be.
>>
>> s> Coming up with a support/resistance system is all you need to
s> make
>> s> whatever you want from the markets.
>>
>> s> I've seen hundreds of traders get wiped out trying to go on the
s> path
>> s> you're following and all of the successful traders I've been
s> around
>> s> in the e-mini futures have used S/R as the foundation of their
>> s> trading methodology.
>>
>> s> And, above all, embrace your emotions in trading because they
s> teach
>> s> you what you should and shouldn't do going forward. Computers
s> learn
>> s> nothing while you learn from every win and loss you make.
>>
>> s> Finding an edge in trading is easy. It's only hard if you're
s> using a
>> s> computer to find a needle in a haystack because you didn't make
s> a
>> s> good enough investment in real-time observations of the markets
s> while
>> s> researching an edge you'd like to trade.. That makes all the
>> s> difference in the world for knowing what works and what doesn't.
>>
>> s> You'll come up with 10 edges to trade if you put the time in to
>> s> experience a live market on a regular basis without trying so
s> hard.
>> s> It will bring out your imagination and creativity to find what
s> you're
>> s> looking for.
>>
>> s> I wish someone had told me that 4.5 years ago when I started
s> trading
>> s> the ER2 e-mini. It would have saved me a lot of time chasing
>> s> nonsense.
>>
>>
>> s> --- In amibroker@xxxxxxxxxxxxxxx, "ihsaham" <ihsaham@> wrote:
>> >>
>> >> Hai Tomasz,
>> >>
>> >> This is simple Jake Bernstein Momentum Formula for chart and
>> s> scanner.
>> >> Please help me give arrow buy and sell. Buy arrow is Green
s> colour
>> s> and
>> >> Sell Arrow is Red Colour.
>> >>
>> >> I really appreciate and thanks for you in advance.
>> >>
>> >> Best Regards,
>> >> Anthony Idic
>> >>
>> >>
>> >>
>> >> _SECTION_BEGIN(" $ Momentum ");
>> >>
>> >>
>> >> /* Bernstein Momentum Indicator */
>> >> /* Set Scaling to Automatic, Show dates On, Percent On, Middle
s> On */
>> >>
>> >> Title = "Bernstein MOM Close - Ref(Close,-7)";
>> >> GraphXSpace = 5;
>> >> Graph0 = MA(Close - Ref(Close,-7),1);
>> >> Graph0Style = 5;
>> >> Graph0Color = 29;
>> >> Graph1 = MA(Graph0,5);
>> >> Graph1Style = 1;
>> >> Graph1Color = 32;
>> >>
>> >>
>> >> DaysAgo =Optimize("DaysAgo",-28,-40,-16,4);
>> >> Fast = Optimize("Fast", 1, 1,5,1);
>> >> Slow = Optimize("Slow",28,16,40,4);
>> >> /* Note: It is merely a coincidence that DaysAgo and Slow use
s> the
>> >> same parameter set. */
>> >>
>> >> Buy = Cross( MA(Close - Ref(Close,DaysAgo),Fast),
>> >> MA(Close - Ref(Close,DaysAgo),Slow) );
>> >>
>> >> Sell = Cross( MA(Close - Ref(Close,DaysAgo),Slow),
>> >> MA(Close - Ref(Close,DaysAgo),Fast) );
>> >>
>> >>
>> >> Short = Cross( MA(Close - Ref(Close,DaysAgo),Slow),
>> >> MA(Close - Ref(Close,DaysAgo),Fast) );
>> >>
>> >> Cover = Cross( MA(Close - Ref(Close,DaysAgo),Fast),
>> >> MA(Close - Ref(Close,DaysAgo),Slow) );
>> >> _SECTION_END();
>> >>
>>
------------------------------------
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