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<DIV><FONT color=#000000 size=2>I want to thank Jim for his excellant ideas and
help... I would like to intoduce to the group the idea of Market safety.. My
personal efforts have been to develope systems for knowing if and how much I
should be in the market.. I have made a matrix of systems that scales me in and
out of the market. </FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT><FONT size=2>The reason behind this was
my time that I have to find the gems in the market as well as even if I found
these Gems... and the market turns their worth diminishes. Alot of my work deals
with breadth, sentiment and price momentum. As we stand now Breadth has
deteriorated to an extreme negative level. Momentum has stagnated and is on the
verge of being negative. Lastly sentiment as measured by market vane 2 weeks ago
reached an extreme 73%..</FONT></DIV>
<DIV><FONT size=2>One needs to look at the market on a daily basis and yesterday
was a strong day but the breadth didn't confirm nor did some of the other
indices. </FONT></DIV>
<DIV><FONT size=2>I am currently 65% invested in the Rydex Nova. If we turn down
to 1145 on the Sp my matrix of systems scales me back much
further...</FONT></DIV>
<DIV><FONT size=2>I would like to learn more from Jim and see some chart
examples. I feel I can contribute to the timing aspect. If people are interested
I can elaborate further.. thanks</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Andy Abraham cta</FONT></DIV>
<DIV><FONT size=2>Angus Jackson </FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>Jim Greening <<A
href="mailto:JimGinVA@xxxxxxxxxxxxx";>JimGinVA@xxxxxxxxxxxxx</A>><BR><B>To:
</B>metastock@xxxxxxxxxxxxx
<<A
href="mailto:metastock@xxxxxxxxxxxxx";>metastock@xxxxxxxxxxxxx</A>><BR><B>Date:
</B>Tuesday, December 15, 1998 9:19 PM<BR><B>Subject: </B>Re: Building
Blocks - Trend Channels<BR><BR></DIV></FONT>
<DIV><FONT size=2>Rick,</FONT></DIV>
<DIV><FONT size=2> Thanks for the input.
Actually, the rather subjective final decision on which stock will be my
pick for the week is part of my system <G>. However, I
understand what you mean. I do always look at the closed positions,
especially the losses, to see if there was something obvious that I could
change in the system to avoid the same problem in the future. However,
I really haven't taken a hard look at or really even followed the second
choices that I didn't get. That's a good idea, thanks!</FONT></DIV>
<DIV><FONT size=2> It's probably also a good
idea to stop tweaking the system since I'm pretty satisfied with it
exception for the market timing and direction part that I haven't really
described yet. It's also based on trend channels with market
indices. I'm thinking about revisions to what I'm currently doing and
maybe expanding it to more sector analysis. I'll try to get a
discussion going on it in the near future.</FONT></DIV>
<DIV><FONT size=2> I really do appreciate all the
comments I have been getting The has two reasons for starting these
discussions. First if I could describe my system, I would understand
it better and hopefully follow it closer <G>. I think that has
worked. Last but not least, I might get some helpful ideas for
improvements. That has also worked, so the discussions have really
been a benefit to me. I just hope others got some good out of them
also.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>JimG </FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style="FONT: 10pt arial">----- Original Message -----
<DIV style="BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A
href="mailto:rmjapan@xxxxxxxxxxxxxxx"; title=rmjapan@xxxxxxxxxxxxxxx>Rick
Mortellra</A> </DIV>
<DIV><B>To:</B> <A href="mailto:metastock@xxxxxxxxxxxxx";
title=metastock@xxxxxxxxxxxxx>MetaStock List</A> </DIV>
<DIV><B>Sent:</B> Monday, December 14, 1998 7:28 PM</DIV>
<DIV><B>Subject:</B> Re: Building Blocks - Trend Channels</DIV></DIV>
<DIV><BR></DIV>
<DIV><FONT color=#000000 face=Arial size=2>Hi ya "Swami"
Jim,</FONT></DIV>
<DIV><FONT color=#000000 face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>I think for pointers on how to tweak your
system you need to look no further than your book of closed trades. I
assume you do keep (at least you should) a careful record of each trade?
My feeling is that just about any system based on sound trading logic
that can be backtested can make you money using the right money
management filters. </FONT><FONT face=Arial size=2>So if I were
you, I'd go thru my closed book and play "what if" with my
exit stops. <FONT face=Arial size=2>Obviously, this is not something
that can be done by computer unless you've kept all the details of the
trades on a spreadsheet. Even then it's no easy
task.</FONT></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>That said, you do have a good low-risk
objective strategy that's on a real hot streak. But from my point of
view, it's not so much your channel entry/exit system but your stock
selection that is making you the bucks. By that I mean, every week you
generate a list of possibilities from which you take your weekly trade.
You normally don't have the buying power to take all signaled trades so
you are forced to select 1 or 2 stocks out of several candidates.
Moreover, I sense your last cut may be pretty subjective. Your recent
choices have been amazing, almost telepathic and why I've nicknamed you
the Swami ;-), in that they are almost immediately followed by some
news-driven move. Iomega and Eggs are recent examples that pop into my
mind.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>But, without taking all signaled trades,
its hard to measure your systems real performance. Your systems recent
success may very well be just due to the "luck of the draw."
So, you might want to also examine records of trades you passed on to
get a better feel if it's just your good "judgement" or the
system that's making you money. If it's the system and the returns are
acceptable for the risk, then my advise is don't fiddle with it. Try
working on another system you can add to your toolbox that will work
under different market conditions. </FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>That's all I can offer for now. Probably
not much immediate help but perhaps some food for thought.</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Merry Christmas,</FONT></DIV>
<DIV><FONT face=Arial size=2>Rick</FONT></DIV>
<DIV><FONT face=Arial size=2></FONT><FONT face=Arial
size=2><B></B></FONT> </DIV>
<DIV><FONT face=Arial size=2><B></B></FONT> </DIV>
<DIV><FONT face=Arial size=2><B></B></FONT> </DIV>
<DIV><FONT face=Arial size=2><B></B></FONT> </DIV>
<DIV><FONT face=Arial size=2><B>-----Original
Message-----</B><BR><B>From: </B>Jim Greening <<A
href="mailto:JimGinVA@xxxxxxxxxxxxx";>JimGinVA@xxxxxxxxxxxxx</A>><BR><B>To:
</B>Metastock <<A
href="mailto:metastock@xxxxxxxxxxxxx";>metastock@xxxxxxxxxxxxx</A>><BR><B>Date:
</B>Monday, December 14, 1998 4:31 AM<BR><B>Subject: </B>Building Blocks
- Trend Channels<BR><BR></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px"></FONT>
<DIV><FONT size=2>All,</FONT></DIV>
<DIV><FONT size=2> Last week I talked about
how I use trend channels to set targets and stops to tell me when to
exit a position. This week I'm going to go back to the
beginning to discuss how I use trend channels to tell me when to
enter a position. I'd appreciate any comments pro or con on
this methodology.</FONT></DIV>
<DIV><FONT size=2> I've come to depend more
and more on trend channels as my primary technical analysis tool.
The theory of trend channel investing is simple. First you have to
construct the trend channel. After that is done the rest is easy.
For up trend channels you open a long position right after a stock
bounces off the bottom of a channel and close the position when it
hits the top of a channel. Vice versa for down trend channels. I
treat horizontal channels like up trend channels for trading
purposes.<BR> Of course, I expand on this
simple methodology slightly <G>. First I construct short,
intermediate, and long term channels on all my charts. My
definition of short, intermediate and long term is flexible. In
general short term is days to up to a few months, intermediate term
is a few months to over a year, and long term is years. I like to
open a position in the direction of the long term trend channel when
an intermediate term trend channel is broken and the stock reverses
in the direction of the long term trend. Since this is a fairly rare
occurrence, my secondary method which occurs much more frequently
and is, therefore, the one I use the most, is to enter a position
when the short term trend channel is broken and the stock reverses
in direction of the intermediate term trend channel. In both
cases, the reversal is a better buy signal when it occurs in
conjunction with a bounce off the bottom of the longer term trend
channel. Once a stock has reversed its trend, I construct a
new short term trend channel in the direction of the longer term
trend. I use this new Short Term Trend Channel to set my
targets and stops as I described last week if I entered a position
on the breakout of the old channel. If I missed entering the
position at the breakout, there are additional entry points every
time the stock bounces off the bottom of the new short term trend
channel. <BR> As you can see, using
trend channels for signaling when to enter a new position is
straight forward and simple. The trick is how to objectively
and consistently construct the trend channels. For short term
up trend channels I use the Standard Deviation Channel built into
MetaStock. I start the channel immediately to the left of the lowest
low in the data being considered and end immediately to the right of
the highest high in the time frame. I set the deviation at 2 to
determine the targets and at 1 to determine the stops. I
usually leave it at 1 for looking at the charts since the stop is
more important than the target I extend the channel to the right.
Anytime a new high is hit, I'll drag the right end of the channel
immediately to the right of that high. After a few months with at
least two good reactions, I switch to Trader Vic type trend lines to
construct my short term channels. I only use Trader Vic type trend
lines for intermediate and long term channels. I like the
Trader Vic methodology much better than using a standard deviation
channel, but it gives many more false signals than standard
deviation channels do for very short term channels without any major
reactions in the data. </FONT></DIV>
<DIV><FONT size=2> For a Trader Vic up trend
line, start with the lowest low in the time frame being considered.
Draw a line from that low to a low before the highest high in the
time frame such that the line doesn't pass through any data. It's
important that you don't draw the line through any data or to a low
that is past the highest high in the timeframe. A down trend line is
just the mirror image using the highs in the time frame. To
construct the up trend channel, extend the line to the right, then
draw a parallel line through the most extreme high in the time frame
such that the line doesn't intersect any other data points. This is
easy with MetaStock. You can hold the CTRL key down, then hold the
left mouse key down once you are on the original line and drag a
parallel line to where ever you want it. You can do the down trend
channels in a similar manner. Horizontal channels are the easiest.
Just drop a horizontal line on the highest high and lowest low in
the time frame. My final touch is to change the line color and
style: blue and dashed for short term channels; red and dashed
for intermediate term channels; and magenta and dashed for long term
channels.<BR> That's all there is to
it, what do you think? Does it make sense?</FONT></DIV>
<DIV> </DIV>
<DIV><FONT size=2>Jim <BR></FONT></DIV>
<DIV> </DIV>
<DIV> </DIV></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Fri Dec 25 23:26:43 1998
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Message-Id: <199812161414.IAA03806@xxxxxxxxxxxxxxxxxx>
From: "Bill Coward" <wrcoward@xxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Subject: Re: TC2000 vs QP2
Date: Wed, 16 Dec 1998 08:09:40 -0800
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Cab,
I'm currently using a scan that includes only NYSE stocks, Volatility value
61 and higher, Price value 13.75 and higher, and Volume-5day value 541 and
higher. This currently produces 468 stocks. I use this pool for both long
and short picks. I've found a direct correlation between volatility
ratings and average daily returns.
I stopped using NASDAQ stocks because of their higher intraday volatility
and hitting my stops more frequently. However, I'm revisiting this issue
and am starting to do some testing with another TC2000 scan which includes
both NYSE and NASDAQ stocks. The Price and Volume values are the same as
above but the Volatility value is 75 and higher. This scan produces almost
800 stocks. I did a short-trades-only backtest using TechniFilter from
1/1/93 through the present on both pools with no stops but exiting after
one day. The pool with the higher Volatility values produced an average
daily return 33% higher than the one with lower values. I suspected this
was due to higher volatility NASDAQ stocks, but I was wrong. Using Excel
to get separate stats on each group based on the length of the ticker
symbol (NYSE = 1-3, NASDAQ > 3), the returns for both were virtually
identical. I plan to adjust my stops to take advantage of the benefits of
higher volatility.
Good luck.
Bill
----------
> From: cvinton <cvinton@xxxxxxxxxxxxxx>
> To: L_MetaStock <metastock@xxxxxxxxxxxxxxxxxxxx>
> Subject: Re: TC2000 vs QP2
> Date: Sunday, December 13, 1998 12:15 PM
>
> "Bill Coward" <wrcoward@xxxxxxxxx> wrote:
>
> > I use TC2000 to filter at
> > a gross level stocks I'm interested in. These are stocks on the NYSE
> > having the highest volatility with certain price and volume
> > characteristics. This gives me a pool of about 500 stocks to work
with.
>
> Bill,
>
> What particular volatility, price, & volume characteristics are you
> looking for?
>
> I'm looking for a good initial screen for stocks ...
>
> Thanks,
>
> Cab Vinton
>
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