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Chris
You want to be real careful using that ZigZag indicator. I didn't really
read the description in the MetaStock manual a few years ago and started
playing with it. Built a dynamite trading system. Unfortunately, because
of the way it works, the last day always changed so that my signals were
perfect. I thought I had figured out how to mint money. Told my dad what I
had done and he cracked up.
Thought it was too easy.
Our internal data base that we keep on line goes back to 1990 for about 25
different futures and to 1986 for the S&P and Bonds. We have on floppies
(5.25" naturally) modified continuous data back to the 1970s. Don't even
know if we can even read them. For years we used to back test way way back.
We have since changed our philosophy and feel that recent history is more
important than ancient history.
Since we have done our detailed back testing all the way back to 1986 and
not before, I can't challenge your statement identifying the change in
volatility. For some reason, it appears to me that something else has
happened more recently. Again, I love the volatility. Our system thrives
on it. I just have this feeling that everything is working 'too good' and
that something is going to happen to kick me in the rear :).
I guess I just can't stand prosperity.
Guy
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]
On Behalf Of Chris Henderson
Sent: Friday, June 19, 1998 10:01 PM
To: Metastock List
Subject: Re: Times are a changing? Increasing volatility
<< File: XAOzigzag.gif >> Guy Tann wrote:
>We seem to be seeing increased volatility in our maket (S&P futures).
This is, I think, reflected in equities too. At least from where I am
trading (in outback Australia), there has been a marked increase in
volatility in the market recently - no doubt because of a sense that the
bull market is ending. But in fact the volatility change goes back to about
1986.
A while ago I did a study of the Australian All Ordinaries trends. Using
the ZigZag indicator to pick out relatively short term trends, and then
differentiating the result to show the rate of price change I found that
from about 1986 onwards there has been increasing 'noise' in the market. I
am attaching a chart of this which is quite interesting.
Does this mean that the older TA indicators and trading methods have become
less useful?
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