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Frank
I think maybe you miss the point here. Indicators aren't static, they're
dynamic. In our trading, we have developed our own set of basic indicators
that we use in all of our systems. Even though they may have worked for 20
years doesn't mean they're going to continue to work, so you need to
constantly monitor them. The systems (how you use and/or combine your
indicators to make actual trades) can vary between different commodities.
We use one system for S&P futures and that doesn't work well with most other
commodities. Probability of success around 50%, which to me is almost the
same as flipping a coin. Years ago, when we first started developing our
own systems, we thought was that if an indicator was any good, it would work
for all commodities. Took a lot of learning before we realized that it
ain't necessarily so (as the song goes). Our S&P trading system has been
refined often over the last 17+ years, but this was basically changing how
we weighted our various indicators.
Regards
Guy
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Frank Wang
Sent: Friday, April 23, 1999 9:07 AM
To: metastock@xxxxxxxxxxxxx
Subject: Re: Some indicators should work....
One fundamental problem with static indicator like MACD or moving average
etc is that most of them are linear. However, the market is non-linear
and non-stationary. A given indicator may work for a while, but given
time, most of them will under perform. For example, currency was a major
issue surrounding the 87 crash. But today, currency is hardly an issue.
Market changes its characteristics over time. Your MACD may work for a
while, but will under perform in another period of time. The public
psychology changes with time. They tend to focus on specific issues for a
given period of time.
Frank Wang
On Fri, 23 Apr 1999, Nicholas Kormanik wrote:
> "traders spend much too much time creating indicators. None of these
> indicators in the long run will give you more than a 50:50 chance at
making
> money."
>
> I find it hard to believe that various indicators don't perform better
than
> others. Take the MACD, for instance. I think it would yield greater than
a
> zero return over time, if used properly.
>
> Haven't you found *some* indicators that you have developed confidence in?
>
> Thanks,
> Nicholas
>
>
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