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I was looking at Mr. Downs' latest tactical pattern in the January issue of
TASC. Does anyone know why this "two bar pattern" is called an "Equilateral
quads ..."?
Why is the Range multiplied by such a small number (0.01)?
Interesting that he says on page 40, that "... a tactical short-term pattern
trader might be trading more than 100 different patterns over many markets.
..." That's a lot of scans, 100 different pattern scans just in one time
frame. Daily, weekly, monthly .. gives you 300 scans to run! How many
patterns do you have to research to get 100 "good" scans?
Does that violate his 4th strategic guideline on page 22 "Simplicity .. KISS
...", etc.?
Is that the direction that trading is going? ... Brute computer horsepower?
Multiple computers scanning different time frames looking for personalities
of markets, tendencies, etc?
Dr. Simons' article in the December Futures Magazine talks about how the
changing markets have changed technical analysis. "The changes in regimes
{i.e., night trading, electronic trading, etc.} altered the frequency of
common signposts for technical analysis. The "gap", ... has been a notable
casualty." (Note: this is a serious article, not a casual, "off-hand"
comment.)
Kaufman also noted the same difficulty of using technical analysis to trade
mature markets in his book "Smarter Trading".
Dr. Simons', whose articles on spreads and options are superior, ends the
article "... None of this favours longer-term position trading - the target
of most technical analysis - but it does favour day-traders, limited-risk
options traders and low margin-to-equity fundamental traders."
If anyone has read these articles, I'd be interested to hear your opinion
and any questions that they raised in your mind.
Best regards
Walter
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