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Gradually getting through the articles, which I do find well-written. I do
notice that in his discussion of types of trading strategy his TS formulae
assume entry on same day as the signal is given. Apart from being physically
impossible for EOD traders, new system testers should be aware that an entry
on the next day's open is much more realistic.
-----Original Message-----
From: superfragalist [mailto:no_reply@xxxxxxxxxxxxxxx]
Sent: Wednesday, October 20, 2004 7:31 PM
To: equismetastock@xxxxxxxxxxxxxxx
Subject: [EquisMetaStock Group] How to Build a Trading System without Lace
For those of you who can't read my posts because of my caustic wit
and dry sense of humor, not to mention insulting all groups
simultaneously, here is a step by step guide to building your own
trading system. (I am removing the pearls from the pig pen so that
more people may enjoy them as jewelry! However, there is an art to
simultaneously insulting so many with so few words. I do not intend
to bury that skill.)
Let's us begin.......
Read all the articles under Trading as a Business
http://www.elitetrader.com/tr/index.cfm?s=17
The articles will teach you step by step how to build a trading
system.
John Clayburg's book Four Steps to Trading Success will show you how
to setup a simple indicator system that is among the best there is.
It will serve as your basic trading system. It works on all stocks,
in any time frame and has no curve fit. Then you add your favorite
filters to it.
In Roy's newsletter he is building one of the best filtering systems
there is. It's a great newsletter for teaching MS coding and systems
building. It's only $99 a year.
www.metastocktips.co.nz
That should be most of what you need to get started and keep you from
getting too far off course. Oh, I would also add a 20 bar SMA to the
chart because price often regresses to the 20 bar SMA.
If you absolutely feel the need to have red and green arrows that
scream buy me now, you can use a program like ICE, or the simple
systems from Performance Systems Plus. Just remember, any "expert"
system is going to generate a lot of false signals, so your other
basic buy sell indicators like the Clayburg's and Roy's filtering
technique Rule. (Especially Roy's noise filter. I would have paid
more than $100 for that alone.)
Once you have done this, you will find the system you have built will
match the recommendations in the article, and there really isn't
anything any better out there for you to start with. You can trade
with it without losing your rear.
Oh, I almost forgot. Does it come with an exploration. No, it
doesn't. But that's not a factor.
You really should trade from a fixed group of stocks in my humble
opinion. VERY few people have found success searching 7000 stocks a
night for the one's that have the little green or red arrows popping
up. It's better to use a pre-screened group such as the S&P Platinum
Portfolio or the Valueline T1 stocks or the IBD 100.
If you don't want to use those, then scan by HAND every night a set
group like the S&P 100 or 500. You really do need to look at all
those charts by hand because you need to see where in the cycle each
stock is and what it's chart looks like. Nothing beats learning to
read charts, and exploring every night just won't teach you how to do
that. If you insist on having stocks that meet a certain criteria,
learn to use Marketscreen.com. Yes, my brothers and sisters, you have
to pay for it but it's a much better exploration system than you'll
ever get with TA in a box like MS, and it's already programmed for
you.
You also need to learn to use secondary entries because a stock that
is already trending has a better probability of continuing to move up
than a stock that has it's little red or green arrow showing. And
please remember---resist the urge to trade against the overall market
trend. The trend is your friend!
What does a secondary entry mean? Well, if you open a chart and the
Clayburg are passed their intial buy signal and the stock is showing
a trend with Roy's filter, if you buy it even though it's passed it's
intial entry point, you stand a very good chance of making money.
When the Clayburg's and Roy's filter tell you to sell it, you follow
those indications no matter what your intuition tells you, or what
the little green and red arrows are doing.
Okay, those are my small contributions for those of you who wish to
have a trading system but don't know how to create one. You are
probably still grasping at straws, which you won't have to do any
more thanks to uncle Super.
Are we all feeling like good dobee's now?
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