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J.,
The first indicator that I ever built was a 3 day moving average lagged 10
days. My Tandy I computer used to do 10x10 simulations that would chew up
10 or 12 hours of time. This type of indicator, by nature, tends to do well
in choppy or channeling markets. It sucks in markets that become strictly
directional. I love the sine waves they create when applied to different
markets. I've seen times when this indicator and market where totally in
synch and the "string" that resulted was hard to comprehend. It was a
building block for my technical education. It started my path down the
momentum oscillator road.
In the late 70's I saw this formula knock off about 16 winners in a row. I
kept telling my wife about it and finally we decided to "roll the quarters"
and chase our fortune in cocoa. Within three weeks I had parlayed 3k into
about 20k. I thought that my little "money machine" would continue to pump
out dollars forever. Well, one day I woke up to a limit down move and I
wasn't able to get out until I suffered through 3 limit down days. At the
time, I think I was using a 2 day moving average in cocoa and was lagged
some ridiculous amount of days (14?). I used a bunch of different numbers
during that period. It took me years to comprehend the delicate balance of
optimizing variables.
The important thing here is probably the framework for testing. With "non
whippy" oscillators, it's nice to test using directional changes as a
trading trigger (the structure of the system test presented in coco loco).
Indicators are a dime a dozen...trading rules rule. If you apply my old 3
day moving average and lag the difference 10 days, I think you will find
that it trades cocoa very well this year. It's fun to see that some of
these early approaches can still crank out a profit.
Take care,
Steve Karnish
Cedar Creek Trading
http://www.cedarcreektrading.com
----- Original Message -----
From: j seed <jseed_10@xxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Friday, November 03, 2000 2:28 PM
Subject: Re: no, cocoa loco
> Steve,
> Thanks for the gif. and indicator! Have you ever tried it in a shorter
time
> frame than 8?
> Thanks,
> J.
>
>
> >From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
> >Reply-To: metastock@xxxxxxxxxxxxx
> >To: <metastock@xxxxxxxxxxxxx>
> >Subject: no, cocoa loco
> >Date: Fri, 3 Nov 2000 08:08:23 -0800
> >
> >List,
> >
> >A simple approach to stimulate other talk of indicators and system
> >development. Cocoa and sugar can be tough to trade. Here's an indicator
> >and some rules applied to the cocoa maket. A simple moving average
> >oscillator and a couple of rules: trade directional turns in the
> >indicator...go long if the indicator turns up below zero, reverse and go
> >short if the indicator turns down above zero. Not suited for many
> >contracts and issues....but, 13-0 trading cocoa since 1/1/00. Use at
your
> >own risk.
> >
> >Steve Karnish
> >Cedar Creek Trading
> >http://www.cedarcreektrading.com
>
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