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Tom,
That's a big thanks from me too.
Collectively the forum beats trading books, hands down!
brian_z
--- In amibroker@xxxxxxxxxxxxxxx, <professor@xxx> wrote:
>
> Brian_z
>
> I had Graham write me a program using my rules with arrows and
alerts. I traded that program manually using EOD data for about 6
months. During that time, I was testing my program using hourly data.
I found that it was more profitable, but I didn't want to be watching
the computer all day, so I decided to try auto trading. I had Barry
write the program which I love. However, during the testing of the
auto trading program, I found a few problems with the way my rules
for buying and selling were trading. After correcting a few problems,
it works great.
>
> I was manually trading my other program during all the testing of
the auto trading program, but I made the changes to my manual trading
as I found how well the corrections to my auto trading program were
working.
>
> Since I only trade 3 times a day and I have access to my home
computer using my laptop and teamviewer software when I am away, I
really could trade manually most of the time. However, I might be
forget to be at my laptop on time or be traveling without internet
access, so I find that auto trading fits my needs. For instance, I
was in a trade and I was leaving for Europe for 2 weeks. I didn't
have a sell signal, but didn't want to be in a trade while I was on
the plane without internet access, so I had to sell my position. If I
had been able to follow my program instead of selling early, I would
have made $3000 more profit as gold went up $30 more before I
recieved a sell signal.
>
> I don't know if it is possible to day trade and have your backtests
match your trading, but by having my trading times match the times on
the backtest really helps me. I can tell if my program is trading
correctly by matching my trades to a backtest. That is how I noticed
one problem with my program. I ran a backtest with my old program and
compared it to my test trading using my auto trading program. When I
saw a trade was made on one and not the other, I knew that there was
a problem. Now, whenever I have a trade, I run a backtest to see if
the trade was made in the backtest. So far, everything is great.
>
> Tom
> ----- Original Message -----
> From: brian_z111
> To: amibroker@xxxxxxxxxxxxxxx
> Sent: Monday, August 25, 2008 1:59 AM
> Subject: [amibroker] Re: 'Rule Based' versus 'Discretionary'
trading...
>
>
> That's interesting.
>
> Thanks for sharing.... IMO personal testimonies contibute a lot
to
> helping people develop as traders....a lot will take heart from
your
> >100% performance ...well done.
>
> For research purposes ;-)
>
> ... to see if my 'model' predicts your behaviour correctly.
>
> Before you autotraded did you trade it with programmed alerts,
> written rules, by remembering the rules or any combination of the
> above?
>
> I understand you went to AT for convenience (so you don't have to
> stay awake in the middle of the night).
>
> Since you have been autotrading for a while..... have you found
any
> additional benefits from it .... any pros and cons?
>
> brian_z
>
> --- In amibroker@xxxxxxxxxxxxxxx, <professor@> wrote:
> >
> > Brian_z
> >
> > I have modified my trading formula several times as I have
found a
> few problems where a trade was made that I didn't think should
have
> been made by looking at the charts or a trade wasn't made when I
> thought that it should have been made. I am trading automatically
so
> I am just checking on the trades that have been made.
> >
> > I have set up a backtest that trades within a minute of my
actual
> real time trading. I have accomplished this by a having trading
> window that only trades at specific times for 2 minutes.
> >
> > What I have found it that my results get better with each
change.
> These changes are small changes like I changed my trading times.
I
> changed the parameters on one indicator. I added a stop loss and
a
> stop profit.
> >
> > The amazing thing is that I am not attempting to optimize my
> formula, I am only trying to have it trade exactly as I want it
to
> trade and at the best time when the markets are closing. I make a
> change and backtest it. My results have quadrupled on my
backtesting
> and on my actual trading. I check my actual trading results by
> backtesting because they should be the same. So when I get an
> automatic real trade, I run the backtest to see if it also shows
a
> trade. Of course, the price is slightly different most of the
time,
> but not enough to really affect my results. Oh, I use a market
trade
> to insure that it is filled as fast as possible.
> >
> > I only make 5 to 10 trades a month. If I told you my annual per
> cent of profit, you would not believe it, but it is well over
100%
> return. I have been trading this system for about a year, but I
have
> only been auto trading it for about a month. I only trade gold
> futures both long and short.
> >
> > Now that you know the background about my formula, I want to
tell
> you that it is so simple. It only has 3 buy conditions and 3 sell
> conditions which are very simple. So, it is possible to use rule
> based trading with a simple formula especially if you concentrate
on
> one area to keep it as simple as possible.
> >
> > Tom
> >
> >
> > ----- Original Message -----
> > From: brian_z111
> > To: amibroker@xxxxxxxxxxxxxxx
> > Sent: Sunday, August 24, 2008 5:24 PM
> > Subject: SV: [amibroker] Re: 'Rule Based'
versus 'Discretionary'
> trading...
> >
> >
> >
> > Comments on some quotes from the markets in profile link:
> >
> > >Using rules to make money is, of course, incredibly appealing;
> > >however, such cut-and-dried rules are seldom accompanied by
the
> most
> > >important rule - a rule to connect, manage, and harmonize all
> the
> > >other rules.
> >
> > That is what I am saying... in very simplistic terms ... this
> > requires that we are capable of achieving a psychological point
> of
> > balance .. from that point of balance we can manage input from
> both
> > sides of the equation . the left and right brain..... I `wrote
> that
> > in' when I said that "indefinite/subjective rules are
acceptable
> > provided they lead to a formal rule (statement)".
> >
> > >Dictionary.com defines a rule as "a basic generalization that
is
> > >accepted as true and that can be used as a basis for
> reasoning.."
> > >Nothing is said about the rule being tested for validity, or
how
> the
> > >rule was derived.
> >
> > There is a section in the Wiki epistemology link, that I
posted,
> that
> > talks about how philosophers define knowledge as "propositions
> that
> > are believed, justified and true" .. The article then went on
to
> say
> > that in the 60's this definition was invalidated leading to the
> > addition of the need for INFALLIBLE justification i.e. the
> validity
> > of the rules is vigorously examined ... this is `old hat'.
> >
> > >There is a bewildering range of variables that affect any
> commodity,
> > >futures contract, or stock. And there are nearly limitless com-
> > >binations and permutations of these variables. If a purely
rules-
> > >based system were to be truly effective, it would have to
offer
> a
> > >rule for each possible arrangement - an impossibility.
> >
> > Not so.
> >
> > In Science it is a well known principle that all models make
> > assumptions . the assumptions are a trade off for utility
value..
> > provided the model has predictive value we continue to use it
> until
> > something better comes along.
> >
> > In trading we do the same thing e.g. we have discussed, in this
> forum
> > in the past, how the data that we use is only an approximation
of
> the
> > market (it is impossible for exchanges to provide an absolute,
> real
> > time data stream . and it is getting worse as markets move to
non-
> > traditional mechanisms) .. knowing that we can still trade
> > successfully.
> >
> > When a trader uses, say programmed rules, they are modelling a
> > limited area of the market i.e. the window that they are
> interested
> > in, or targetting draws a square around part of the bigger
> picture ..
> > they know they have only captured a small part of the market,
in
> > their box ... as long as it has some predictive value .. and
> > continues to have it?
> >
> > >Rules-based systems do not account for contextual market
> conditions,
> > >and are not adaptive to constantly evolving market con-ditions.
> >
> > I allowed for that . in my manifesto .. contextual market
> conditions
> > may not be able to be programmed/written down/mentally stated .
I
> say
> > MAY because I can't be certain that other traders don't have
> access
> > to data that I haven't OR can program/write down/state things
> that I
> > can't.... also there is nothing to stop a `programmed rules
> trader'
> > from clicking the button on their computer whenever they want
to.
> >
> > Some traders have posted to say that they `look at market
> conditions'
> > (== subjective/contextual/indefinite?).......... and then
decide
> > which `system' to use i.e. the indefinite rule `guided' them
> towards
> > a stated rule that precedes the buy action.
> >
> > `Hot' programmers can write some very complex systems, that can
> make
> > sophisticated decisions .. provided they can input the relevant
> data
> > in a timely manner?
> >
> > >Discretionary traders are constantly performing their own
market
> > >analyses, and are required to spend considerably more time and
> > >effort both before and during market hours. This time
> requirement
> > >also limits the number of markets or securities discretionary
> > >traders can successfully follow
> >
> > Not necessarily.
> >
> > They can focus down to one small section of the market OR one
> market
> > anomaly that they are following...they might follow the same
> thing,
> > over and over .. if it doesn't disappear ... in which case they
> > could, say, start the day with a scan, or a few charts .. look
at
> > them and make a subjective/contextual/indefinite `in principle
> > decision' to go long on a sector ---------> narrow down to 2 or
3
> > stocks to watch -----------> enter the trade based on a
> > definite/stated rule (setup).
> >
> > 5 minutes a day to get in ... unknown time waiting to get out?
> >
> > `Programmed rules traders' aren't always going to be more
> focussed or
> > have less work to do ... their system might involve a lot of
> number
> > crunching (wait while the computer runs it) before they get a
> setup
> > for the day.
> >
> > BTW traders can't backtest indefinite, contextual or subjective
> > rules, or principles, but in lieu of that they can paper
> trade ...
> > the statistical data set they obtain will be just as valid
> (subject
> > to statistical rules) as a backtested data set.
> >
> > brian_z
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "sidhartha70" <sidhartha70@>
> > wrote:
> > >
> > > Brian,
> > >
> > > Thought you might find this interesting. I've read a couple
of
> this
> > > guys books (being a Market Profile geek)... and I rate him
very
> > > highly. Just an interesting link,
> > >
> > > http://www.marketsinprofile.com/DscrtTrdr-2.html
> > >
> > > --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@>
> wrote:
> > > >
> > > > My teacher often said "Energy follows thought." - I find it
> one
> > of
> > > > the more difficult axioms to understand.
> > > >
> > > > I think it is embodied in trading by 'positive
thinking' ...
> > Napolean
> > > > Hill and the classics of that kind.
> > > >
> > > > brian_z
> > > >
> > > >
> > > >
> > > >
> > > >
> > > > --- In amibroker@xxxxxxxxxxxxxxx, "Jan Malmberg" <jan@>
wrote:
> > > > >
> > > > > Hi,
> > > > >
> > > > > In response to the entire thread: Because there is
energy,
> > there is
> > > > law that
> > > > > governs it. No energy equals no law which equals no
energy.
> > This is
> > > > the
> > > > > fundamental truth of existence.
> > > > >
> > > > > Best regards / JM
> > > > >
> > > > >
> > > > >
> > > > > _____
> > > > >
> > > > > Från: amibroker@xxxxxxxxxxxxxxx
> > [mailto:amibroker@xxxxxxxxxxxxxxx]
> > > > För
> > > > > sidhartha70
> > > > > Skickat: den 23 augusti 2008 11:43
> > > > > Till: amibroker@xxxxxxxxxxxxxxx
> > > > > Ämne: [amibroker] Re: 'Rule Based' versus 'Discretionary'
> > trading...
> > > > >
> > > > >
> > > > >
> > > > > Brian,
> > > > >
> > > > > Interesting as always.
> > > > >
> > > > > I'm not sure I see a difference between 'X traders'
> > and 'intuitive
> > > > > traders'... they are the same thing I assume?? Why
classify
> > them as
> > > > > 'X' traders when 'intuitive' is a term much more familiar
> to
> > most?
> > > > >
> > > > > You say,
> > > > >
> > > > > "In all probability traders who haven't written down
their
> > rules
> > > > are
> > > > > > using much simpler 'systems' and/or have automatically
> joined
> > > > > > together a few simple rules to make a set of
> > easily 'remembered'
> > > > > > mental rules."
> > > > >
> > > > > I'm not sure I agree with that statement. I think a good,
> > intuitive
> > > > > trader can be processing far more information than you
> suggest,
> > and
> > > > a
> > > > > much larger base of loosely based rules than you suggest.
> > > > >
> > > > > To quote Steven Hawkins from 'Steidlmayer on Markets'...
> > > > >
> > > > > "... you will begin to gain a feel for a market that
> enables
> > you to
> > > > > sense changes AS they occur, not after. You will develop
> the
> > ability
> > > > > to RECOGNIZE opportunies. You will learn to RECOGNIZE
when
> you
> > are
> > > > > wrong BEFORE your dollar position tells you so. You will
> begin
> > to
> > > > see
> > > > > that, when you have exited a trade early, it was usually
> the
> > right
> > > > > thing to do... In other words you become 'one' with the
> market."
> > > > >
> > > > > I guess that's something approaching intuition. I remain
to
> be
> > > > > convinced that 'seeing a few seconds into the future' is
> > anything
> > > > more
> > > > > than being 'in flow' with the market. Maybe zero delay,
> seeing
> > > > things
> > > > > AS they happen, not after, is enough.
> > > > >
> > > > > I find it strange that you don't use more intution in
your
> > trading
> > > > > since you seem to believe in its power and use it so
> > successfully
> > > > > elsewhere in your life.
> > > > >
> > > > > --- In amibroker@xxxxxxxxx <mailto:amibroker%
> 40yahoogroups.com>
> > > > ps.com,
> > > > > "brian_z111" <brian_z111@> wrote:
> > > > > >
> > > > > > > Another possible irrational explanation is that some
> humans
> > may
> > > > have
> > > > > > > the ability to see the future.
> > > > > >
> > > > > >
> > > > > > Ed,
> > > > > >
> > > > > > I feel I sold you short on this one so if you are
> interested
> > in a
> > > > > > more detailed answer read on.
> > > > > >
> > > > > > In my scheme of things there are no trader
> classifications,
> > > > except
> > > > > > perhaps good ones and not so good ones.
> > > > > >
> > > > > > If it helps us to understand our trading and/or become
> better
> > > > > > traders, by naming classes, by all means lets do so but
> if
> > and
> > > > when
> > > > > > we consider traders to be discretionary, we are, IMO
> > deceiving
> > > > > > ourselves i.e. it is probably the most useless
> classification
> > of
> > > > all.
> > > > > >
> > > > > > For the sake of the discussion - if there are otraders
> who
> > > > can 'know'
> > > > > > things using faculties that other traders don't have
then
> I
> > would
> > > > > > call them XTraders (X == unclassified OR an unknown
> quantity).
> > > > > >
> > > > > > Our culturally accepted paradigm is that we are
thinking
> > > > > > (rationalising) and feeling creatures contained in a
> physical
> > > > body
> > > > > > (vessel).
> > > > > >
> > > > > > Culturally it is considered 'irrational' that anyone
> could
> > > > function
> > > > > > with a faculty other than thinking or feeling i.e.
people
> > > > > > who 'believe' this are sub-standard thinkers (perhaps
> they
> > are
> > > > > > unbalanced by their emotions?)
> > > > > >
> > > > > > In other cultures alternative 'levels of consciousness'
> are
> > > > > > considered the norm (consciousness that is above and
> beyond
> > > > rational
> > > > > > thinking that is).
> > > > > >
> > > > > > Specialists in this field don't consider these X
> faculties as
> > > > > > irrational - this term is reserved for a special class
of
> sub-
> > > > > > rational consciousness.
> > > > > >
> > > > > >
> > > > > > As an analogy:
> > > > > >
> > > > > > Rationality can be symbolised by a clear blue cloudless
> sky
> > and
> > > > the
> > > > > > sub-conscious mind as the clear deep green ocean.
> > > > > >
> > > > > > The irrational elements of our 'mind' are floating on
the
> > surface
> > > > of
> > > > > > the ocean, bobbing up and down like corks.
> > > > > > Collectively the corks are always in motion.
> > > > > > They are discrete and individual corks 'rotate' above
and
> > below
> > > > the
> > > > > > water line. Their upward motion creates pressure on our
> > conscious
> > > > > > mind and some leap out of the water, into
consciousness,
> for
> > > > brief
> > > > > > periods.
> > > > > >
> > > > > > We call them irrational because they never come to full
> and
> > > > complete
> > > > > > expression in our rational mind - it is not possible
for
> them
> > to
> > > > > > exist there autonomously because of the material that
> they
> > are
> > > > > > constructed of (speaking symbolically they are half-
> formed
> > > > creatures
> > > > > > from the deep).
> > > > > >
> > > > > > They act somewhat autonomously from our consious mind
and
> > > > controlling
> > > > > > them is a devil of a job (the labours of Hercules).
> > > > > >
> > > > > > Specifically they are products of our environment
> > > > (upbringing/past
> > > > > > etc) that are exascerbated ny 'inherited' qualities
(put
> two
> > > > people
> > > > > > in the same stressful environment and one can develop a
> > mental
> > > > > > pathology while the other person won't).
> > > > > >
> > > > > > They can affect our trading by popping up as irrational
> > behavoiur
> > > > in
> > > > > > the heat of battle or by generally influencing our
> approach
> > > > > > (fear/greed etc).
> > > > > >
> > > > > > The 'higher' level of consciousness (knowing) that I am
> > > > personally
> > > > > > familiar with is the Intuition which I consider to be
the
> > > > 4th/seven
> > > > > > levels of consciousness attainable my Mankind.
> > > > > >
> > > > > > Note that in our culture the term is used in different
> ways
> > in
> > > > > > different cultures and that even amongst specialists in
> this
> > > > field
> > > > > > their is disagreement over the classifications of
> > consciousness
> > > > and
> > > > > > the nomenclature.
> > > > > >
> > > > > > I don't know how Intuition works, nor have I
experienced
> the
> > full
> > > > > > scope of it.
> > > > > >
> > > > > > For me it works in different ways at different times
and
> it
> > is
> > > > > > dependent on how I manage it (if I am tired or don't
pay
> full
> > > > > > attention the quality of what I 'perceive' drops).
> > > > > >
> > > > > > It is not mind reading.
> > > > > >
> > > > > > I experience it as a kind of 'super-rationality' i.e.
> given
> > the
> > > > same
> > > > > > facts that the rational mind possesses (yes I still
have
> to
> > read
> > > > the
> > > > > > help manual) I can sometimes connect the dots in
amazing
> ways
> > and
> > > > do
> > > > > > it instantaneously - I just consider I have done the
> rational
> > > > anlysis
> > > > > > at a speed that my conscious mind couldn't keep up with.
> > > > > >
> > > > > > According to the pundits other levels of consciousness
> are
> > > > accessible
> > > > > > in the supra-rational mind.
> > > > > >
> > > > > > The intuitive level of consiousness can be accessed via
> the
> > > > abstract
> > > > > > mind and this is what many of the leaders of our
culture
> do -
> > it
> > > > is
> > > > > > especially prevalent in those who are trained in/have a
> > > > disposition
> > > > > > towards use of the abstract languages e.g.
> > > > > > maths,programming,philosophy, art, music etc where it
is
> > > > experienced
> > > > > > as INSPIRATION.
> > > > > >
> > > > > > I haven't tried to be an Intuitive trader because I am
> quite
> > > > happy to
> > > > > > use all of the resources available to me in a balanced
> way
> > > > (combining
> > > > > > computer skills, rational thinking, inspiration and
> emotional
> > > > control
> > > > > > in a synthesized package and I am doing fine with that).
> > > > > >
> > > > > > Anyway, I can't seperate my learned experiences from my
> > > > instinctive
> > > > > > experiences so I couldn't perform an honest test (if I
> tried
> > to
> > > > make
> > > > > > purely intuitive trading choices I could be biased by
> other
> > more
> > > > > > mundane factors).
> > > > > >
> > > > > >
> > > > > >
> > > > > > How does this apply to trading?
> > > > > >
> > > > > > We can make a truly unbiased decision if we flip a coin
> > > > (technically
> > > > > > speaking the decision is made by the coin at the moment
> it
> > comes
> > > > to
> > > > > > rest).
> > > > > >
> > > > > > Coins don't have thoughts, feelings or X consciousness.
> > > > > >
> > > > > > We do.
> > > > > >
> > > > > > Whenever we make a decision it is almost impossible for
> us to
> > > > measure
> > > > > > the degree that it is influenced by feelings, thoughts
or
> > > > XFactors.
> > > > > >
> > > > > > Anything that influences our decision making places a
> > condition
> > > > on
> > > > > > it, so in a round aout way it is a rule.
> > > > > >
> > > > > > That is why I claim that we are all rule based traders
> > (unless we
> > > > > > flip a coin to make our trading decisions).
> > > > > >
> > > > > > The differences come about because of the quality,
> number,
> > format
> > > > etc
> > > > > > of our 'rules'.
> > > > > >
> > > > > > As a rule of thumb:
> > > > > >
> > > > > > Writing down our rules is one way to quality control
them.
> > > > > > Writing them in computer language is an even more
> definitive
> > way
> > > > > > force them to logicality.
> > > > > >
> > > > > > However we shouldn't assume that people who like to
trade
> in
> > a
> > > > visual
> > > > > > way e.g. chart trading, don't have written or
programmed
> > rules OR
> > > > > > that people who haven't written down their rules
> are 'worse'
> > > > traders
> > > > > > than those who do.
> > > > > >
> > > > > > In all probability traders who haven't written down
their
> > rules
> > > > are
> > > > > > using much simpler 'systems' and/or have automatically
> joined
> > > > > > together a few simple rules to make a set of
> > easily 'remembered'
> > > > > > mental rules.
> > > > > >
> > > > > > On that basis it is a bold asumption to say that they
> > couldn't
> > > > teach
> > > > > > it to others.
> > > > > >
> > > > > > I dare say they can most likely teach it to a 15 year
old
> a
> > lot
> > > > more
> > > > > > readily than they could teach them to autotrade.
> > > > > >
> > > > > > It is a pretty fair bet that bad rules, unclear rules,
or
> no
> > > > rules at
> > > > > > all, is the source of most trading trouble rather than
> > unwritten
> > > > > > rules or XFactor rules.
> > > > > >
> > > > > > As for XFactor traders (if there really are any out
> there):
> > > > > >
> > > > > > - they are still following a rules it just happens that
> they
> > get
> > > > them
> > > > > > from the fairy perched on the top of their computer
> screen (I
> > > > guess
> > > > > > the proof of the pudding is in the eating).
> > > > > >
> > > > > > Personally, I haven't made a decision to buy/sell based
> on an
> > > > > > intuitive signal AFAIK (if anyone is an intuitive
trader
> then
> > I
> > > > would
> > > > > > be a good candidate).
> > > > > >
> > > > > > However in real life I make intuitive decisions all of
> the
> > time.
> > > > > >
> > > > > > One way I use the intuition is that I sense it like a
> stop
> > light
> > > > in
> > > > > > the pit of my stomach - I can almost see it - red ==
> > stop/orange
> > > > ==
> > > > > > caution, green == go.
> > > > > >
> > > > > > Specfic examples:
> > > > > >
> > > > > > I go to a website - I take one look at it - I read the
> first
> > > > > > paragraph of an article their - I get a red light -
don't
> > read
> > > > > > anyfurther - it saves me research time - reason == the
> level
> > of
> > > > > > consciousness of the author is too low - they couldn't
> > possibly
> > > > write
> > > > > > anything about trading worth reading (sorry but it
isn't
> > anything
> > > > > > more romantic than that).
> > > > > >
> > > > > > In other cases I use the intuition in more advanced
ways
> but
> > that
> > > > is
> > > > > > a very long story.
> > > > > >
> > > > > > I hope that helps a few traders sort out their thoughts.
> > > > > >
> > > > > > "If we are saying it, we are thinking it.
> > > > > > If we are thinking it, we are doing it".
> > > > > >
> > > > > > If we are sloppy with our trading nomenclature?
> > > > > >
> > > > > >
> > > > > > brian_z *:-)
> > > > > >
> > > > > > I am very sorry but I can't answer private emails to my
> > public
> > > > email
> > > > > > addresses - many of them get lost amongst the spam
anyway.
> > > > > >
> > > > > > Also I apologise deeply but I do not 'take' students.
> > > > > >
> > > > > > FTR I teach the 'middle way' (not in a sectarian way)
and
> I
> > do
> > > > what I
> > > > > > can publically.
> > > > > >
> > > > > >
> > > > > > --- In amibroker@xxxxxxxxx <mailto:amibroker%
> > 40yahoogroups.com>
> > > > ps.com,
> > > > > "Ed Hoopes" <reefbreak_sd@>
> > > > > > wrote:
> > > > > > >
> > > > > > > Another possible irrational explanation is that some
> humans
> > may
> > > > have
> > > > > > > the ability to see the future.
> > > > > > >
> > > > > > > In competitive sports some players just seem to know
> what
> > their
> > > > > > > opponents will do. Maybe the same is true of some
> > successful
> > > > > > traders.
> > > > > > > They can't explain it rationally, but they "just know
> it"
> > > > > > >
> > > > > > > Reef
> > > > > > >
> > > > > > > PS
> > > > > > > Unfortunately, I don't have this trait.
> > > > > > >
> > > > > > >
> > > > > > > --- In amibroker@xxxxxxxxx <mailto:amibroker%
> > 40yahoogroups.com>
> > > > ps.com,
> > > > > "brian_z111" <brian_z111@> wrote:
> > > > > > > >
> > > > > > > > From the 2nd article:
> > > > > > > >
> > > > > > > > "Paul Taglia sees high-probability Window set-ups
> that
> > the
> > > > rest
> > > > > > of us
> > > > > > > > don't. I've seen him do this for nearly two years.
He
> > can't
> > > > > > explain
> > > > > > > > it...he simply says that he's looked at thousands
and
> > > > thousands
> > > > > > of
> > > > > > > > charts over his career and some charts simply look
> better
> > to
> > > > him
> > > > > > than
> > > > > > > > others. We once asked him to keep a journal to see
if
> we
> > > > could
> > > > > > > > systematize what he saw. It was a useless exercise.
> He
> > sees
> > > > it
> > > > > > but he
> > > > > > > > can't explain it."
> > > > > > > >
> > > > > > > >
> > > > > > > > According to Occams Law the simplest explanation is
> > usually
> > > > the
> > > > > > best.
> > > > > > > >
> > > > > > > > http://en.wikipedia
> > <http://en.wikipedia.org/wiki/Simplicity>
> > > > > .org/wiki/Simplicity
> > > > > > > >
> > > > > > > > Possible explanations, of Paul Taglia's
discretionary
> > style
> > > > are:
> > > > > > > >
> > > > > > > > a) He can 'see', or sense, the future in the charts,
> > > > > > > > b) he has a set of rules that he learnt in the past
> > (based on
> > > > > > > > experience) and they have become second nature -
> possibly
> > he
> > > > has
> > > > > > > > forgotten what they are or when he learnt them (or
at
> > least
> > > > some
> > > > > > of
> > > > > > > > them)
> > > > > > > > c) he has a set of rules, and he knows that, but
this
> is
> > an
> > > > > > excellent
> > > > > > > > posture to take if his game plan is never to reveal
> them
> > to
> > > > anyone
> > > > > > > > d) he has a set of rules but has a playful nature
OR
> > likes to
> > > > > > take
> > > > > > > > the mickey out of his associates OR has a
superiority
> > complex
> > > > and
> > > > > > > > disdains the idiots who surround him
> > > > > > > > e) he has an inferiority complex and needs the
boost
> that
> > > > comes
> > > > > > from
> > > > > > > > the adulation of others - this is an excellent
> strategy
> > to
> > > > > > establish
> > > > > > > > mystique as a trader and achieve legendary status
> > > > > > > > f) it is a great way to market ones employment
value
> in a
> > > > > > transient
> > > > > > > > workplace (its a resume that can't be questioned to
> any
> > > > extent
> > > > > > either)
> > > > > > > > g) some combination of a-f
> > > > > > > > h) he has a set of rules (some conscious, some sub-
> > conscious)
> > > > but
> > > > > > he
> > > > > > > > can't be bothered explaining them (it is a form of
> energy
> > > > > > > > conservation - an alternavtive version of this is
> that he
> > > > could
> > > > > > be a
> > > > > > > > very focused trader and has eliminated the non-
> > essentials,
> > > > like
> > > > > > > > defining his style OR chatting about his style.
> > > > > > > >
> > > > > > > > BTW irrationality is the common name for the shadow
> (I
> > used
> > > > the
> > > > > > > > symbolic name).
> > > > > > > >
> > > > > > > > There is no irrationality in maths, programming etc
> which
> > is
> > > > > > probably
> > > > > > > > why I quite like programmers etc.
> > > > > > > >
> > > > > > > > Trading myths are born out of, and perpetuated by
> > > > irrationality.
> > > > > > > >
> > > > > > > > brian_z
> > > > > > > >
> > > > > > > >
> > > > > > > >
> > > > > > > > --- In amibroker@xxxxxxxxx <mailto:amibroker%
> > > > 40yahoogroups.com>
> > > > > ps.com, "wavemechanic" <timesarrow@>
> > > > > > > > wrote:
> > > > > > > > >
> > > > > > > > >
> > > > > > > >
> > > > > > http://www.tradingm
> > > > >
> > > >
> >
>
<http://www.tradingmarkets.com/.site/stocks/commentary/lcbattlep/08272
> > > > 0>
> > > > > arkets.com/.site/stocks/commentary/lcbattlep/082720
> > > > > > > > 04-39801.cfm
> > > > > > > > >
> > > > > > > > >
> > > > > > > >
> > > > > > http://www.tradingm
> > > > >
> > > >
> >
>
<http://www.tradingmarkets.com/.site/swingtrading/commentary/lcbattlep
> > > > />
> > > > > arkets.com/.site/swingtrading/commentary/lcbattlep/
> > > > > > > > 09022004-39899.cfm
> > > > > > > > > ----- Original Message -----
> > > > > > > > > From: sidhartha70
> > > > > > > > > To: amibroker@xxxxxxxxx <mailto:amibroker%
> > > > 40yahoogroups.com> ps.com
> > > > > > > > > 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@xxxxxxxxx <mailto:amibroker%
> > > > 40yahoogroups.com>
> > > > > ps.com, "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@xxxxxxxxx <mailto:amibroker%
> > > > 40yahoogroups.com>
> > > > > ps.com, "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.amibroke
> <http://www.amibroker.com/devlog/>
> > > > r.com/devlog/
> > > > > > > > >
> > > > > > > > > For other support material please check also:
> > > > > > > > > http://www.amibroke
> > <http://www.amibroker.com/support.html>
> > > > > r.com/support.html
> > > > > > > > > Yahoo! Groups Links
> > > > > > > > >
> > > > > > > > >
> > > > > > > > >
> > > > > > > > >
> > > > > > > > > No virus found in this incoming message.
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> > com
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> > > > > > Date:
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> > > > >
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> > >
> >
>
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