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Super,
"...and if you trade them long in a downtrend, you're going to lose
your butt." -- You've made it very clear in prior posts to trade only
in the direction of the trend. But how do you hedge/protect your
portfolio against a catastrophic event. What I have be doing is
always maintaining simulataneous long and short positions.
--- In equismetastock@xxxxxxxxxxxxxxx, superfragalist <no_reply@xxxx>
wrote:
>
> It's like all the other plug-ins for MS. It's so, so. You're not
going
> to find a plug-in that makes money consistently in every kind of
> market. If the market is in a uptrend, you can pick entries at
random
> and make money, if you have a rational exit strategy. So in an
> uptrend, all the plug-ins work pretty good. None of the plug-ins
make
> much, if any money during consolidating markets, and if you trade
them
> long in a downtrend, you're going to lose your butt--not to mention
> self confidence, trading account and the adoration of your spouse.
>
> Trade Oracle uses a bunch of really simplistic entry formula's
without
> filters. However, as simple as they are, some of them work well in
> uptrending markets. The trick is to figure out which ones work in
what
> kinds of markets, and then use those when you have those
conditions.
>
> Some of the simple entry codes would have performed well in finding
> shorts in 2001 for example but would have done horribly in 2003.
>
> Everyone wants to test their "system" across all three market
> conditions and then decide if it's a good system.
>
> Try this instead. Assume 2002 was a downtrending year, assume 2003
was
> an uptrending year. Now assume that both of those years were
abonormal
> years. Assume 2004 was the typical uptrend year with s few
pullbacks.
> Assume 2001 was the typical downtrend year with a couple of brief
> rallies.
>
> Here's what you're going to find. In 2003 almost any long system
> looked brilliant. In 2002, almost any short system looked brilliant.
> 2004 will show you how a long system really performs in a typical up
> year and 2001 will do the same for a short system.
>
> Now if we really want to make money, in 2001 you would have used
your
> short system part of the year in the downtrend, and your long system
> during the rallies.
>
> How do you know when to do this? Well, I've posted on that a bunch
of
> times, and it's really simple. However, there are some of people who
> read the information and then immediately started posting wanting to
> know where they could find a crystal ball that would tell them when
to
> go long and when to go short. I can't possibly help those lost
souls.
>
> What bothers people about the methods I suggested for figuring out
the
> up and down direction is the "lag." Well, welcome to trading. Yes,
> there are going to be days when you're trading in the wrong
direction.
> Days--not months and weeks.
>
> I just had one of those days. I had to dump a few trades hours
after I
> entered them and make nothing becaue of a correction I missed. So
> what. I only have a few of those days a year and the rest of the
time,
> I'm on the right side making money.
>
> Of course you can spend the rest of your life trying to find a way
to
> get rid of the "lag", or whatever is causing our lastest brain
> aneurysm. However, you would be better off putting your money in
> mutual funds and watching it grow along with your Chia Pet.
>
> William Bernstein's book, The Four Pillars of Investing is the best
> buy and hold book ever written. Get your self a copy and a Chia pet
in
> case the TA thing doesn't work out.
>
> Here's my suggestion for learning to trade. Get a simple program
like
> Performance System's (the simple version of Trade Oracle) or Trade
> Oracle. Test the simple litttle formulas in those systems the way
I've
> described in this post.
>
> Learn as much as you can about filters, exit strategies and money
> management by reading systems development books.
>
> Take those simple systems and add a filter here or there to them
along
> with your own exit strategies, which can be as simple as a moving
> average cross, or as powerful as an adaptive moving average cross
with
> a negative ROC.
>
> Trade the simple system small, and as you trade it, you will learn
to
> identify the market types, (switch systems as necessary, please),
you
> will see what kinds of filters will improve the system's performance
> and you will learn the exits that make the most money over time.
>
> Then you can test your ideas in the tester to see what works on a
> relative basis. Do not look at the tester results and think this is
> "real". Those results are relative--not real! Live trading never
> produces the same set of circumstances as the tester. The tester
only
> gives you information on a relative basis. If you don't know what
> relative means, it's not your uncle Fred. Look it up.
>
> If you practice good money management and get close to knowing if
the
> market is in a uptrend or downtrend, you'll make a little money,
learn
> what you're doing, find a system that fits you and actually become a
> trader. Whew, wouldn't that be fun!
>
> I sorry but there's no "make me a trader" plug-in.
>
> Finally, here's my last tip--outside of cutting this out, reading it
> everyday and posting it next to your computer.
>
> Do not under any circumstances put your Chia Pet next to your
> computer--at least not the one you trade with. When you water your
> Chia Pet, you're going to have an occasional accident. Water will
> damage your computer, and it's a real bad thing when your computer
> goes down you just as the market makes a turn and you need to unload
> your positions.
>
> I've got five computers. Metastock is on three of them, and the Chia
> Pets are on the other two.
>
>
>
>
>
>
>
>
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, "Peter Lazos" <peterl@xxxx>
wrote:
> > ETS stands for??
> >
> > -----Original Message-----
> > From: Simon [mailto:sgrw@x...]
> > Sent: Wednesday, February 09, 2005 10:26 AM
> > To: equismetastock@xxxxxxxxxxxxxxx
> > Subject: [EquisMetaStock Group] ETS for Metastock
> >
> >
> > I have been searching for a 'real' review of the above product
with
> no luck.
> > All I can find is sales literatue. Therefore, I would be very
> grateful for
> > any feedback from anyone who uses the product before I make the
> purchase.
> >
> > Thanks
> >
> > Simon
> >
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