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At 11:54 AM 6/9/01 -0400, you wrote:
>Rudoff,
>Let me ask you this: Have you or anyone ever found an optimized system that
>has worked in every market over the course of years? (The Holy Grail) How
>many really manage to follow an optimized system over a long period of time
>and ended up with a return that beats the market averages?
IMHO, Given that we have only a few thousand of US tradable (reasonable
volume, etc.) stocks, that we have probably several million traders who
trade these stocks, that most of these traders use similar TA and money
management techniques to time their trades, that many of these traders play
the same stocks over and over and collectively give it "their mark", ... it
becomes a matter of tuning in to the currently most popular trading methods.
Optimization techniques are by far the easiest way to "scan" for popular
periods, prices, resistance levels, fundamentals, etc.
You can extend optimization into the area of fundamentals with several
other computer programs and data feeds. However I find that developing
systems on the basis of fundamentals is much more timely: what works today
most likely doesn't work three months from now (my experience) - I guess
this type of analysis is mostly sentiment and economy driven. However, if
you luck in with the right timing the profits are impressive. I think pure
TA methods are longer lasting.
To succeed you have to devise a system that "leads a little" on the
currently dominating stock analysis methods; not easy ... since you are not
the only one who is doing this, you are - together with another million
traders or so - modifying the market. So, most systems are, probably,
eventually self-defeating.
Well, as a novice in all this, my opinion may be wrong - I'd love to be
corrected :-)
Happy trading,
Herman.
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