|
PureBytes Links
Trading Reference Links
|
>>In the meantime I will stick to my guns by saying that "except for
people who KNOW what the price is going to do everyone else is a rule
based trader and categorizing traders, as DT's or MT's, is arbitrary".<<
I agree that every trader uses rules, I completely disagree with your
final phrase. You don't 'get' what DT's do. Often times the rules DT's
use are fuzzy and require judgement. MT's rules are mechanical.
Let's look at something as basic as trend. 1st you have to determine if
there is a trend and then whether or not it is a strong or weak trend.
All 3 conditions are treated differently.
Here is a quote I am sure you have heard:
"The trend is your friend until it comes to an end."
Every time prices retreat in a trend, how do you know whether the trend
will resume or there is a new trend beginning or a period of congestion
has started? That's a judgement call. If you wait long enough (i.e., for
too much confirmation), it's no longer a judgement call but the
information is too late to do you any good.
It is important to know, very early on, when a trend has started because
the later in a trend you take a trade in the direction of the trend, the
lower your probability of success since the trend may have come to an
end.
Pay attention to this quote from Ray Barros:
"I believe that markets are chaotic. Consequently, I believe:
* Markets have a discernible structure
* They rhyme rather than repeat i.e. there are patterns we can
exploit but these patterns are repeated' similarly rather than
exactly'.
* The market rhymes because the patterns are a reflection of the
emotional tug-of-war between the buyer and the seller.
* The context in which the patterns occur are critical to the plan.
A discretionary plan is also a reflection of our psychology including
our appetite for risk; this refection is articulated in our trading
philosophy..."
What DT's do is recognize the market's rhymes. It's the 'similarly
rather than exactly' part that makes programming this stuff so
difficult.
Bill
--- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@xxx> wrote:
>
> >Descretionary traders make decisions that are based on personal
> >knowledge and circumstances, perhaps using many factors unknown to
> >themselves. Like which journal they read the night before.
>
> This is the nub of the question for sure, and the point that I am
> investigating.
>
> I suspect that when they (self-nominated DT's) think they are making
> discretionary decisions they are in fact making rule based decisions.
>
> That is why I asked for specific examples of 'discretionary' decision
> making e.g. I haven't seen Bilbo's chart yet but I consider it highly
> unlikely that the decision about whether a trend is in place is a
> discretionary decision - I can define a trend in several different
> ways - all of them can readily be written as a rule (in words or with
> code) - I don't care if the definitions are 'correct' or not as long
as
> the system that they are part of works i.e. my rules for a trend
depend
> on the context.
>
> As Dennis said, our rules might be difficult to program, causing us
not
> to automate the trade, but mentally we are still running the rules and
> if we are honest with ourselves we do know what the rules are.
>
>
> >For a novice traders to try and mimic the techniques (of
Discretionary
> >Traders) without
> >having similar backgrounds merits caution.
>
> What I am suggesting is that, over time, the sub-conscious mind will
> automate what was intially habitual conscious behaviour, and even make
> some improvements on it, so that 'we' can skip the conscious part for
> some 'tasks' e.g. driving the car becomes second nature.
>
> That won't happen for new traders, in a short time, so they do need to
> persevere, be patient and not try to mimic people who have been around
> for years.
>
> IMO formal (written) rules based trading/backtesting/optimization is
> the best place to start - it grinds the basic lessons in very well.
>
> If anyone can look at a chart, and without recourse to any rules, know
> which way the price is going to move and trade successfully (long
> term) on that basis then that is something else altogether.
>
> If it is at all possible to do that then it definitely can't be
taught.
>
> That is why I asked, "Anyone doing it?".
>
> It is just like >100%PA returns - anything is possible but once
someone
> confirms that they have done it then it moves from the realm of
> possibility into reality.
>
> In the meantime I will stick to my guns by saying that "except for
> people who KNOW what the price is going to do everyone else is a rule
> based trader and categorizing traders, as DT's or MT's, is arbitrary".
>
> brian_z
>
------------------------------------
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
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/amibroker/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/amibroker/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:amibroker-digest@xxxxxxxxxxxxxxx
mailto:amibroker-fullfeatured@xxxxxxxxxxxxxxx
<*> To unsubscribe from this group, send an email to:
amibroker-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|