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Bob, our stuff is all home grown. We don't use any of the indicators found
in MetaStock, for instance, so it's difficult to explain what we do.
Basically, we have developed indicators based upon the daily price movement
of a commodity. From there, we have 2 different momentum indicators
calculated from an upward momentum and a downward momentum. One is a short
term momentum and the other is a long term momentum. We then have 5 various
components which we call our SP39 signal (called that because it was
indicator #39 in MetaStock). These are binary wave type calculations, and
each one has an assigned value from +/- 1 to +/- 3. We total these up for a
maximum of +/- 10. That's our basic signal.
We then have a contrarian signal, which is a homegrown indicator which
represents the up or downward movement of the market that day. This
indicator must be opposite the direction we are looking to trade in. So,
assuming we have a buy signal, we must have had a down day either that day
or the day before in order to execute our trade, and the down day must fall
within a specific range. Once we have a signal, we can 'lock' the signal
and wait for a contrary, etc.
Anyway, that's a synopsis of what we do. Now the actual calculations are
proprietary and the results of over 40 years of work for 3 people and
uncounted mainframe, mini and now PC computer hours. For example, the
calculations go down over 11 levels in MS and we still can't do them all so
we also use TAS. Most of our new development is conducted using Clipper and
our own data files. I am in the process of converting the MS and TAS
programs to Excel connected to the MS data using OLE. This is basically
running, but I haven't finished the programming aligning Bonds with the S&Ps
because they have different holidays. We have disconnected Bonds from our
trading rules. We used to require a Bond signal to agree or at least nor
disagree with our S&P signal. We did disconnect the two months ago, when I
made the post asking whether anybody had noticed the disconnect between
Bonds and equities.
Next, I will be converting to Visual Basic 5 and I've already bought MS dll
to handle the connection to our MS data.
We don't actually use any charting or other graphic techniques in our
system. Neither do we use any cycle stuff, other than our own. We do look
at the RSI and Bollinger Bands (but that's just because John Bollinger is a
personal friend and our kids went to preschool together).
I have to admit that my target for this upside move (1073 S&P futures) is
based upon an S&P Weekly chart.
Anyway, hope that helps. We strictly trade probabilities. We know, based
upon experience, that we'll be right 75% of the time, on average. We also
know that when we're wrong on a trade (using a 13.50 pt. visual stop, basis
close), we get out either via Globex, that night, or on the open in the AM.
For years we traded everything, market on the open, but have discovered that
trading via Globex has worked out better, but that depends upon position
size, and availability of contracts. Trading market on the open gives you
the ability to move many more contracts that you could normally move. One
of our firms has calculated we could move 500 contracts on the open without
the market even noticing that we were there. Now, we not in that league,
yet <G>.
Hope that gives you some idea of what we do. I hang around here trying to
understand what other traders do. Granted, I haven't had the time to really
work on this stuff, but hope that I'll have more time when my little guy
goes back to school Monday.
BTW, unless we're stopped out, we are always in the market. That's why this
is an unusual period for us.
Guy
> -----Original Message-----
> From: owner-metastock@xxxxxxxxxxxxx
> [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of {USER_FIRSTNAME}
> {USER_LASTNAME}
> Sent: Tuesday, September 08, 1998 2:56 PM
> To: metastock@xxxxxxxxxxxxx
> Subject: Re: Weekly Pick
>
>
> Please send details on your software.
> Bob
>
> Guy Tann wrote:
>
>
> >
> >
> > DickOn the contrary, our system is definitely not a trend type
> > system. Our worst years in the last 16 years was 1995, I think (would
> > have to look it up), where it was up 100%. We are contrarian
> > traders. Strictly short term. This is the first time we've been out
> > of a market this long in 16 years. If a move goes against us, we get
> > stopped out and never trade in that same direction again. We wait for
> > the opposite signal. The reason is that we play probabilities. We
> > know that we're going to be right 75% of the time (at least over the
> > last 16 years).If we get stopped out because the market has gone x
> > points against us, we know that the odds are that we will lose money
> > on that trade and not to chase it. Since we were wrong on the
> > direction of that trade, we assume that all following signals in that
> > same direction will be wrong. We were stopped out of a long position
> > in one of the giant market swings on 7/23. We did have a sell signal,
> > however our system requires something we call a contrary. That's a
> > measure of the strength of the price move that day. So for us to go
> > short (remember we're contrarians), we need an up day, either the day
> > of the signal or the previous day. The contrary we got was too high
> > and therefore we couldn't go short and needed to wait. We're still
> > waiting <G>.Just didn't want to leave the impression that we have a
> > bull or trend following system. Our system is based upon daily price
> > movement.Emotionally, I am probably more comfortable as a bear. But
> > that's my personality. Regardless, we just trade our signals and
> > don't really care about the direction, just that we get a certain
> > amount of activity. RegardsGuy
> >
> > -----Original Message-----
> > From: owner-metastock@xxxxxxxxxxxxx
> > [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Dick
> > Simmons
> > Sent: Tuesday, September 08, 1998 1:09 AM
> > To: metastock@xxxxxxxxxxxxx
> > Subject: Re: Weekly Pick
> >
> > Hi John, The only indicator that will work in bull trends,
> > bear trends and consolidations is that of cycles. Look at
> > poor old Guy, has a great system for bull markets but it is
> > not working at present. Cycles go on and on. Regards,Dick.
> >
> > -----Original Message-----
> > From: John Hunter <jhunter@xxxxxxxxxx>
> > To: metastock@xxxxxxxxxxxxx
> > <metastock@xxxxxxxxxxxxx>
> > Date: Tuesday, 8 September 1998 1:31
> > Subject: Re: Weekly Pick
> > Jim,Your confusion is shared by many I believe,
> > certainly by myself. I have tried to address it
> > in the past on this forum with no positive
> > outcome and you have prompted me to try once
> > again. To me the answer to this question is the
> > most important reason why anyone would use
> > Metastock. Take your own system, as I have come to
> > understand it from your many very informative
> > postings. When you see a breakout from a tend
> > occurring what indicator or combination of
> > indicators could be used to reliably predictive
> > that the trend has ended and the stock/commodity
> > price will move in a new direction. I have noted
> > you say in a number of postings that you are
> > forced to wait for sufficient information (ie days
> > of trading) to come in before you can redraw the
> > new price direction.I have played around with a
> > number of indicators, and different combinations
> > of indicators, with the object of finding a system
> > that will reliably signal that and end to the
> > current trend is about to come to an end. For
> > example the daily DOW chart had a stochastic
> > crossover, indicating a sell, in late July and
> > this was confirmed by a moving average crossover
> > shortly after this. (These can be viewed from the
> > http://www.barchart.com page.) Now I know it is
> > not going to be that easy and so your confusion
> > and my question to the group. What indicators are
> > useful in predicting the end of a
> > trend?JH -----Original Message-----
> > From: Jim Greening <JimGinVA@xxxxxxxxxxxxx>
> > To: Metastock <metastock@xxxxxxxxxxxxx>
> > Date: Sunday, 6 September 1998 4:42
> > Subject: Weekly Pick
> >
> >
> > All, We got the drop that I was
> > expecting this week, but now I'm
> > confused. Are we in the process of
> > completing a typical four month bull
> > market 20% correction or is this the
> > start of a bear market? I was
> > definitely bearish last week as all the
> > indices were breaking intermediate and
> > long term up trends which confirmed a
> > down trend was in process. That's still
> > the same this week, but I'm getting
> > mixed
> >
> signals.......snip..........snip..........snip............snip.... The
> > internet stocks patterns would support
> > the bear market theory. Since I'm
> > uncertain, my options at this point are
> > to either do nothing or since I'm all
> > cash except for my WCOM put options, I
> > could nibble in both directions.
> > Nibbling is more fun and I have the
> > large cash position for a cushion, so
> > that's what I'm going to do
> >
> <G>.......snip..........snip...........snip..........snip...... To
> > me this looks like a typical long term
> > trend reversal pattern. I constructed a
> > standard deviation Short Term Down Trend
> > Channel (STDTC) with the deviation set
> > at 2 from the 8/19/98 high to the 9/1/98
> > low and extended it to the right. The
> > top of the STDTC is at 30 1/2 and the
> > bottom of the channel can't be reached
> > since it is below zero. The
> > fundamentals are what you would expect
> > of an internet stock, 229% sales growth,
> > but negative earnings. It could do
> > great in a bull market, but should get
> > killed in a bear market.
> >
>
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