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Steve,
On Sat, 10 Apr 1999 08:34:32 -0700, you wrote:
> I use a combination of LinReg, SMI, & TSI
>(Kaleidoscope) for the most of my studies.
Do you use those indicators in a special unique combination, or do you
calculate them separately and combine them e.g. by a kind of "binary
waves" ?
>As for the CMO and cocoa: one
>look at the "perfectly" structured downtrend and one can discern that the
>parameters (variable periods and trigger levels) would not produce the same
>results if cocoa starts to trade above it's current channel.
[...]
>All one really has to do to take advantage of the cocoa downtrend (or any
>trend), is to sell against the 13 day moving average put a stop in at the
>34 day moving average. It would have resulted in a successful trade the
>last 20+ times in cocoa.
This might work for cocoa (but not for e.g. my DAX trading). BTW: Do
you have any special "insider" know-how about cocoa to get an idea,
when special trends or patterns will be active? Imo, this would be
necessary to use successfully any "special trend" model.
> I don't buy into the
>suggestions that one must be able to back test a system for 5 years with
>various samplings to validate an approach.
[...]
>The markets are dynamic. To think that a universally applied approach
>(mechanical) would consistently work on a commodity or many commodities is
>not a very good premise to trade by.
This is ok for me, especially, if you have special know-how about the
market under consideration to understand & identify the reasons for
special trends to be active.
But because I don't have any special knowledge about the market
mechanisms for any special products, I concentrate on the most general
"product" , i.e. the DAX, and I try to anticipate its option prices
based on historical data of the DAX, its sentiments, and some
macro-economical aspects. And because I have a background in
"identification & re-use of know-how, based on example", I'm quite
successful up to now.
>Nothing last forever, but in the meantime, until cocoa demonstrates that it
>wants to trade out of it's channel, I will continue to take the signals
>that this little secular system provides.
Do you know about any other products around, that have strong trends
on a regular basis like cocoa and about the reasons for this behavior?
Happy & successful trades!
mfg rudolf stricker
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