|
Title: Re: [amibroker] Re: 'Rule Based' versus 'Discretionary' trading...
This type of anomaly is EXACTLY what I think traders should be looking for. Such market behaviors still exist and you can often trade these phenomena without knowing anything about the market, without following financial reports, without sleepless nights (short trades!), without great DDs (short trades), etc. However... you may have to become proficient in afl... which I think is a good investment of time anyway.
I think there is not enough experimentation, not enough original research, not enough out of the box thinking. Contrary to the general belief; to try something new and fail is NOT a waste of time. Most TA is stale. Look at the books in the book stores, over the years I must have tried hundreds of systems that have been published and that were supposed to make money at some point in time. I never found one that could be traded mechanically without great DDs, or did any better than something I would cook up myself. To me that means that to trade traditional ideas profitable requires either special expertise or just plain luck - both of which is something that most of us do not have.
Coming from someone who prefers playing with code to trading, the above may not carry the weight you are looking for :-) But think about it and have some fun looking for the unusual. You may be surprised at what you may find.
Good luck,
Herman
Thursday, August 21, 2008, 2:19:45 PM, you wrote:
> Bill,
> Those are interesting articles. Connors has some unusual views (and
> very expensive books <g>).
> Below is an example of how a perspicacious DT can gain a trading edge.
> It's a quote from Joe Ross' Trading Tidbits.
> IIRC, the S&P contract in 1997 had a tick size of 0.05 worth $25 and
> Joe's normal trading size for the S&P was 25 contracts (from "Trading
> By The Minute").
> How much money was Joe making?
> " In 1997 I experienced a fantastic winning streak day trading the S&P
> 500, prior to electronic trading, and prior to the e-mini S&P 500.
> In January of 1997 I noticed that at about 10:45 EST the market
> moved up about 200 ticks, four days each week, better than 90% of
> the time. It never happened on Friday, but Monday through Thursday
> were great. I had no clue as to why it did it or who or what caused
> it. All I knew is that it worked. So at about 10:40 EST I would
> begin watching. Within minutes the attempt to move up those 200 or
> so ticks would take place, and I would grab off about 100 ticks,
> call it a day, and head for the Bahamian beach.
> Then, sadly, in August of that year it stopped working. The exchange
> cut the S&P in half and introduced the E-mini. I have never again
> seen that phenomenon work, but believe me I have looked. "
> Bill
> --- In amibroker@xxxxxxxxxxxxxxx, "wavemechanic" <timesarrow@xxx> wrote:
> http://www.tradingmarkets.com/.site/stocks/commentary/lcbattlep/08272004-39801.cfm
> http://www.tradingmarkets.com/.site/swingtrading/commentary/lcbattlep/09022004-39899.cfm
>> ----- Original Message -----
>> From: sidhartha70
>> To: amibroker@xxxxxxxxxxxxxxx
>> Sent: Wednesday, August 20, 2008 10:52 AM
>> Subject: [amibroker] Re: 'Rule Based' versus 'Discretionary'
> trading...
>> I think you're right Brian. We do all use rules of some sort.
>> But I guess discretionary traders don't use 'hard and fast' rules and
>> can't always define the same set of rules by which they choose to
>> define an entry or exit.
>> For example, as we all know, something as simple as defining a trend
>> programatically can be more problematic as you might at first think.
>> However, a good trader can see very quickly what state the market is
>> in by looking at various time frame of chart.
>> Likewise, divergences of various sorts can be easy to see with the
>> naked eye but difficult to code in their entirety.
>> Like driving a car, or a golf swing, you learn the 'rules' but when
>> you get really good you are no longer thinking rules... you've
>> effectively let go of the rules and are just 'doing'...
>> --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@> wrote:
>> >
>> > Here is my definition:
>> >
>> > We are all rule based traders.
>> >
>> > Mechanical Traders are a specialist group who have programmed
>> > computers to autotrade their rules OR automatically announce their
>> > rules via computer communications (audio, email, chart prompts,
>> > spoken text etc).
>> >
>> > I am prepared to continue the discussion with any seers,
> inituitives
>> > etc, who come forward, and adjust my definition to meet anything
> new
>> > that comes out of that.
>> >
>> > In advance I admit to the possibility of exceptions to the rule.
>> >
>> > brian_z
>> >
>> >
>> > --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@> 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
>> No virus found in this incoming message.
>> Checked by AVG - http://www.avg.com
>> Version: 8.0.138 / Virus Database: 270.6.6/1623 - Release Date:
> 8/20/2008 8:12 AM
> ------------------------------------
> 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/
__._,_.___
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
![]()
__,_._,___
|