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Bill,
If we can set aside the idea that we are in opposition perhaps you
can help me.
I haven't thought about the topic very much, in the past, but digging
into the topic, via this thread, I find:
- it is a all a storm in a teacup
- it is mainly a reflection of prejudicial viewpoints
- people are ever so politely sugar coating and trying to camouflage
their prejudices
- the Larry Connor articles are hackneyed, lame and lack intellectual
vigour (typical of the type of stuff that circulates around the
trading traps)
- there is very little that we can get out of the discussion, that is
any use at all for trading, (except perhaps that those who define
themselves as DT's, and try to defend their position, would be better
off not bothering)
- there might be some trading benefit in the analysis, for the few
who can squeeze something out of the nuances
So that I might get some tangible of benefit out of the discussion
could you explain to me how
- an observed 4 day/week * 200 tick * 10.45AM move
- based on market behaviour
- 90% Wins
- actually traded until the market behaviour was rubbed out by
regulators
is Discretionary Trading?
If I can understand what DT is I would like to try it out for myself -
it sounds like it can be very profitable.
So far I just can't understand exactly what it is that I have to do.
brian_z
--- In amibroker@xxxxxxxxxxxxxxx, "bilbo0211" <wjdandreta@xxx> 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@>
wrote:
> >
> >
>
http://www.tradingmarkets.com/.site/stocks/commentary/lcbattlep/082720
04-39801.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
> > > >
> > >
> >
> >
> >
> > ------------------------------------
> >
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> >
> > To get support from AmiBroker please send an e-mail directly to
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>
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