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Sidhartha,
I have not really done much with reading books on the subject. I have
learned the geometry from playing with different studies over the
years and then trying to relate them back to what theory of human
behavior or statistics would account for the observed relevance to
predicting the future prices. Like you, I started strictly from
programming based on statistics and only learned the power of geometry
in the last few years. Many traders look at price charts and based on
some internal hard wired pattern recognition, and perhaps some
fundamental information, make an estimate of where they think prices
will go in the future. It is these kind of chart traders that move
the markets in the short term. However, for every positive
interpretation of a chart, there is also a negative interpretation,
and then there is also the unpredictable news events that create the
momentum for price changes in the overall market and in individual
sectors and companies. Those affect the mood and opinions of the
traders. It is quite a volatile mess of opposing forces. Prices
reverse when one side gives up the struggle. Charts of price and
volume at the minute timeframe can reveal when that happens. Prices
will then move to the point where the others side gives up.
Generally speaking, simple mechanical systems I have tried to program
have little edge without including some money management techniques.
I am still working on understanding these. Another thing is that a
greater edge comes from combining many different simple things that
traders use into a combined signal. Also the market is ever
evolving. The various cycles are like adding many sine waves of
different frequencies and amplitudes.
I have used web searches to learn a little about different studies,
but I think I have learned the most useful information from day
traders that have shared their ideas on a stock picking board that I
subscribe to. The board also has some free tutorial videos just
released. They have a 2 week free trial period where you can review a
host of archives, but I must caution that it contains all the jabber
of the day along with a few tutorial posts. Posts by Kezha, Gary, and
recently Geo are usually tutorial in nature.
If you want to look at their free videos: http://www.leavittbrothers.com/chartspeak/
Best regards,
Dennis
On Jun 28, 2008, at 7:03 AM, sidhartha70 wrote:
> Dennis,
>
> I read your posts with interest. You seem to have a very different set
> of skills than myself and I find that interesting. I come from a very
> programming orientated background... developing statistical arbitrage
> strategies etc..etc... So I guess I'm more of an AFL geek by nature
> rather than a 'studies on charts' guy.
>
> However, I'm very interested to learn more on this side of trading.
> Can you recommend any references, material or books on this angle of
> trading...?
>
> Many Thanks
>
> --- In amibroker@xxxxxxxxxxxxxxx, Dennis Brown <see3d@xxx> wrote:
>>
>> Mark,
>>
>> The only way I know to draw a square or circle that remains true is
>> with Gfx commands. They will stay true to the pixels on the screen.
>> You would have to use parameters to actually draw them on the screen
>> at any chart date and price.
>>
>> However, they will not be related dimensionally to the time or price
>> axis, only the starting position. These might be useful for
>> information boxes, but useless for trading.
>>
>> As Tomasz stated, any study that changes its relative dimensions to
>> the price and time axis (as a square must do to stay square) is not
>> mathematically valid for trading.
>>
>> That being said, even straight trend lines on a linear price scale
>> are
>> not theoretically valid. They must be on a Log scale to actually
>> be a
>> straight line gain at any investment date. However, since small
>> percentage changes in price are usually the norm, they can be used as
>> a reasonable approximation. Especially since so many traders do
>> use a
>> linear scale.
>>
>> It pays to understand the theory of why we want to draw a study. The
>> statistical relationship between a study and its ability to predict
>> something about future prices is the only thing that matters. For
>> instance, a price will return to a properly drawn median line using
>> the fork study 80% of the time.
>>
>> When someone uses mathematically invalid studies to trade, the only
>> way they succeed is by excellent money management. The study itself
>> is at best no better than a random number. However, even random can
>> be traded profitably as long as you use statistics to guide you with
>> money management. The other reason a bad study may work better than
>> no study is because it forces some discipline against emotional
>> reactions. One sure way to lose money is to trade on your own
>> emotions. It is better to trade against your emotions than with
>> them.
>>
>> Best regards,
>> Dennis
>>
>>
>> On Jun 27, 2008, at 8:12 PM, Tomasz Janeczko wrote:
>>
>>> You don't understand what I am talking about.
>>>
>>> I know how to draw circle on computer screen, but that is not the
>>> point.
>>>
>>> The point is that the perfect circle drawn today will not be a
>>> circle tommorrow when
>>> you scroll the chart.
>>> Why?
>>> Because in PRICE CHARTS X and Y scales are in UNRELATED
>>> units - TIME and PRICE.
>>>
>>> There is NO fixed connection between time and price.
>>>
>>> Corel draw uses SAME UNITS (pixels or inches).
>>>
>>> All Gann theories are simply invalid because he "assumed" certain
>>> relationship
>>> between DAY and PRICE say one dollar equals one day.
>>> He drawn his charts ON PAPER and ASSUMMED constant Y scale vs X.
>>> Even such simple fact as inflation makes such constant relationship
>>> invalid.
>>>
>>> This the relationship is not fixed on computer where you can zoom
>>> in/
>>> out all the way all the time.
>>>
>>> How would you define one day in EURUSD and how in say ES contract?
>>>
>>> Best regards,
>>> Tomasz Janeczko
>>> amibroker.com
>>> ----- Original Message -----
>>> From: "bruiserbbq" <mark.clavell@xxx>
>>> To: <amibroker@xxxxxxxxxxxxxxx>
>>> Sent: Saturday, June 28, 2008 2:02 AM
>>> Subject: [amibroker] Re: In regard to drawing studies...is it
>>> possible to draw an exact circle or square
>>>
>>>
>>> TJ, thanks for the quick reply...in programs like CorelDraw if you
>>> hold down the shift key while drawing a circle or square...that's
>>> exactly what you get.
>>> Let's use a square for example..if I draw a square in AB.how do I
>>> know it is "square"...a true square has 4 equal sides..how do I know
>>> if the square I have drawn in AB is "square" and that the 4 sides
>>> are
>>> equal?
>>>
>>> I notice the same with the gann square tool in AB..there's no way
>>> that I can see that ensures the Gann square is an actual "square"
>>>
>>>
>>> Cheers Mark
>>>
>>>
>>>
>>> --- In amibroker@xxxxxxxxxxxxxxx, "Tomasz Janeczko" <groups@>
>>> wrote:
>>>>
>>>> Hello,
>>>>
>>>> I am not sure what "exact" circle or square means when both X and Y
>>> axes scaling
>>>> is DYNAMIC in any program, which means that "exact" circle becomes
>>> oval (ellipse-like)
>>>> when you resize Y or X (which happens automatically as new data
>>> come in).
>>>>
>>>> Best regards,
>>>> Tomasz Janeczko
>>>> amibroker.com
>>>> ----- Original Message -----
>>>> From: "bruiserbbq" <mark.clavell@>
>>>> To: <amibroker@xxxxxxxxxxxxxxx>
>>>> Sent: Saturday, June 28, 2008 12:42 AM
>>>> Subject: [amibroker] In regard to drawing studies...is it possible
>>> to draw an exact circle or square
>>>>
>>>>
>>>> In regard to drawing studies...is it possible to draw an exact
>>> circle
>>>> or square in AB?
>>>> In some software programs.if you hold down the shift or control key
>>>> while you draw a circle or square...it ensures its an exact
>>>> circle/square and not an elipse or rectangle.
>>>>
>>>> I have tried different keys in AB.but with no luck..is there a way
>>> to
>>>> do this in AB?
>>>>
>>>>
>>>>
>>>> Cheers Mark
>>>> PS: if not.can this feature be added please TJ.
>>>>
>>>>
>>>>
>>>> ------------------------------------
>>>>
>>>> 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 NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
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>>>> For other support material please check also:
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>>>> 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 NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
>>> http://www.amibroker.com/devlog/
>>>
>>> For other support material please check also:
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>>> 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 NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
>>> http://www.amibroker.com/devlog/
>>>
>>> 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 NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
> http://www.amibroker.com/devlog/
>
> For other support material please check also:
> http://www.amibroker.com/support.html
> Yahoo! Groups Links
>
>
>
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