|
PureBytes Links
Trading Reference Links
|
This isn't about learning to read the "personalities" of a small group
of stocks or some specific chart patterns, etc.
Making money can be easy or hard. Something around 99% of the people
like it to be hard. Okay, have at it.
If you open the charts of the Valueline T1 stocks with a moving
average and one or two simple indicators like the ADX (DI+, DI-) and
the IFT, you'll see maybe 25 to 50 stocks that look like they're
moving up. Okay, now we've got something to start with. It doesn't
matter if they've been trending for awhile. Forget that. Trying to
catch the beginning of trends or find precise entries is a waste of time.
Out of the subset of 25 to 50 stocks, which ones have the least
volatile, most consistent movement. Maybe 10 to 20. Okay, that's your
portfolio. Now just hold those until you get an exit signal--whatever
you want for an exit--swap out the laggards and losers with new ones
from next week's list, or sit on what you have until some better ones
show up.
It doesn't take a genius to do this.
In Roy's newsletter there are technigues to figure out which of the 4
market conditions are present and what to do in each of those.
Have fun!
--- In Metastockusers@xxxxxxxxxxxxxxx, "Scott Mariani" <mariani@xxxx>
wrote:
> AA,
> Thank you. That is much clearer to me. I should pick a few stocks,
say from the IBD100, and learn their personalities. I guess only then
will I be able to make a determination as to the value of the stock at
the current price?
> Thanks AA,
> Scott
> ----- Original Message -----
> From: AA
> To: Metastockusers@xxxxxxxxxxxxxxx
> Sent: Sunday, March 13, 2005 11:26 AM
> Subject: Re: [Metastockusers] Scott---Building a Profitable System
>
>
> By the term "financial products" I mean simply trading
vehicles.Either a few stocks,or some futures,for example the e-minis
or the dax future.My point is that you have to focus......
>
> My intention was certainly not to suggest a specific trading
method or strategy.I tried to tell you that all the indicators are
price derivatives and therefore lagging the market.Also,the various
patterns are closely related to the time frame.For example,a fractal
pattern on a 5-minute chart,dissapears on a 10-minute chart.
>
> Scott,there are no oversold or overbought conditions.That's why
RSI and stochastics and all that stuff simply don't work......The
market is talking to you all the time.Every single moment.When you
have bought a stock at 10 and the price is at 15,the only facts are
the price and that you win 5 dollars.The next day the price can go to
17 or to 13 and that will be the only fact then.....Do you understand
what I'm telling you? Have a plan and stick to it.With confidence,with
discipline and with consistency.Define what is a "profit" and what is
a "loss" for you.Be ready to react.Know in advance what you'll do if
the market skyrockets and you are long.How much of your profit you'll
protect and how much you'll risk in anticipation of more profits.No
method works all the time.....You don't know and you don't care why
the market is going up or down.What you must know in advance is what
you'll do in any market movement.
> ----- Original Message -----
> From: Scott Mariani
> To: Metastockusers@xxxxxxxxxxxxxxx
> Sent: Sunday, March 13, 2005 5:40 PM
> Subject: Re: [Metastockusers] Scott---Building a Profitable System
>
>
> AA,
> When you say "Choose 1-2 financial products", do you mean equities?
>
> The recurring messages I keep reading or hearing about are
"buyem when they'r cry'n and sellem when there yell'n" or counter
trend trading. I also keep reading about just using MA's to make buy
and sell decisions.
>
> I have been looking at charts until I am cross-eyed. When you
say "that the truth is the price" what are you eluding to? What makes
the current price a good price to buy? Oversold conditions, a certain
standard deviation above or below some moving average?
>
> I am trying to be clever but it fells like I am trying to
reinvent the wheel!
>
> Thanks AA, Scott
> ----- Original Message -----
> From: AA
> To: Metastockusers@xxxxxxxxxxxxxxx
> Sent: Sunday, March 13, 2005 5:09 AM
> Subject: Re: [Metastockusers] Scott---Building a Profitable System
>
>
> Scott,
>
> if I may add a few words of advice also,to those the other
members of the
> forum gave you,let me tell you this:
>
> I've also passed through the stage of testing
indicators,geometrical
> patterns,combination of indicators,etc.Please do yourself a
favor and throw
> all of them into the waste's basket where they belong......
>
> A good system is not defined by the percentage of the winning
trades.It's
> defined by the edge that is giving you.You must be able to
define that edge
> and use it consistently in your favor.No lagging indicators
and no patterns
> that are time frame depended will give you that edge.The truth
is the
> price.Nothing else.....
>
> A good system is the one that makes money.The good system will
be defined by
> your trade management rules.I can use a simple moving average
system and
> make money and you can use all the BS sold around
(fractals,Gann,neuronic
> networks,etc) and still lose money.Learn to read the
charts.Find something
> that works independently of time frames.It doesn't really
matters what the
> market is doing.What matters is your position related to the
current
> price.Choose 1-2 financial products and stick to them.Don't
scan every night
> thousands of stock trying to find the next home run.Pull
consistently money
> out of the market and don't give it back.And,most important of
all,don't
> ever believe that you can buy a system and become rich.The
reason they are
> selling you this system is because they can't make money out
of it.That's
> why they put all those disclaimers on it.Be clever.
>
>
> ----- Original Message -----
> From: "superfragalist" <jackolso@xxxx>
> To: <Metastockusers@xxxxxxxxxxxxxxx>
> Sent: Sunday, March 13, 2005 8:46 AM
> Subject: [Metastockusers] Scott---Building a Profitable System
>
>
> >
> >
> > Read this entire Charlie Wright article from beginning to
the end. In
> > the later parts he shows you how to develop a system. His simple
> > system trades very well.
> >
> > http://www.elitetrader.com/tr/index.cfm?s=17
> >
> > To help you understand more about what you are doing, read a few
> > systems development books. I recommend reading all of them.
But you
> > can start with books written by Kaufman, Stridsman and
others. I've
> > learned more about trading from systems development books
than the pop
> > books written by the "guru's" who don't trade much at all.
> >
> > The percentage winners is really not the problem. The bigger
issues
> > are the profit per winner vs loss per loser, the frequency
of trading
> > and the drawdowns.
> >
> > Roy's newsletter is about to start a series of articles
written by
> > traders that will describe how they trade and what MS tools
they use.
> > You could benefit from that a lot.
> >
> > www.metastocktips.co.nz
> >
> > You could also benefit from the back issues of MSTT which
explain how
> > to use the systems tester, etc.
> >
> > I've developed a number of systems and it's not very hard to do.
> > What's hard to do is to learn when to use each of the
systems. No
> > single system works well in all market conditions. That's a
really big
> > mistake people make.
> >
> > I have a couple of systems for up trends, down trends, sideways
> > typical and sideways with rotation. Each one has a different
> > expectancy and different values for P/L ratios etc.
> >
> > After I use the system to find high probability trades I
fiter the
> > charts through my best computer--the one in my head. In
general that
> > improves the ratio of winners to losers by about 50%. In
other words
> > if my system has a 50/50 ratio, my evaluation of the charts
improves
> > the ratio to 75/25, and often better.
> >
> > Can you reduce the chart evaluation to a mechanical
system---no. You
> > need experience to evaluate the charts, especially in the four
> > different market conditions.
> >
> > A very simple and very profitable method of trading is
simply to use a
> > prefiltered list based on TA, momentum and fundementals--the
valueline
> > T1 stocks, the IBD list or the S&P neural fair value list.
> >
> > Use a moving average of any type, and one simple indicator
like the
> > IFT of the RSI (Roy's newsletter). Buy the momentum stocks
on one or
> > two of those lists whenever they're above the MA and the
IFT, if it's
> > above it's thresholds. That's all you have to do to make money.
> >
> > That being said, 98% of the want-to-be traders want to do exotic
> > explorations of 3000 stocks a night for patterns, breakouts
or other
> > crap they can't even define muchless find. Of course they're
going to
> > have 40% or 50% winners when the market is in an uptrend.
When the
> > other three conditions exist they're only going to have 20%
winners.
> >
> > If the market is in an up trend advancing stocks always lead
declining
> > stocks, so a monkey could throw darts at a copy of the wall
street
> > journal and wind up picking 50% winners.
> >
> > Trade from the defined lists, learn to read the charts of
the momentum
> > stocks so you can tell when the momentum is likely to
continue--there
> > aren't any indicators that are going to tell you that any
better than
> > your eyeball after you've looked at something around 1000
momemtum
> > stock charts.
> >
> > There are simple methods to use in all four market
conditions. I think
> > Roy will have articles about the methods in up coming
newsletters.
> > There isn't the time or space to post everything every
newbie should
> > know--not to mention having to repeat it one hundred times.
> >
> > Start with the Charlie Wright articles and work your way up.
> >
> > We are in a sideways market with rotation or a slight
downtrend with
> > rotation. That's the worst market there is to trade in so
buckle up.
> > On Friday, I saw some signs that the rotation might be about
to stop.
> > If it does, I'll determine what kind of market we have after
that and
> > then use the appropriate system. This is good time to read
because
> > without a lot of experience you aren't going to be making
any money
> > right now anyway in this kind of market. Maybe after August.
> >
> > If you don't believe me regarding market conditions, here's
a simple
> > test. Set up the explorer to find stocks that have gone up
two days in
> > a row. Run it everyday for the last two weeks and see how
much over
> > lap there is between the lists on a daily basis. For this test,
> > confine your lists to the S&P 500, 400 and 600. That's 1500
stocks.
> > Now if you can't find many stocks that have gone up two days
in a row,
> > and with lists that overlap, it's time to read a book and
stop trading.
> >
> > Have fun!
> >
> >
> >
> >
> >
> >
> >
> > --- In Metastockusers@xxxxxxxxxxxxxxx, "Scott Mariani"
<mariani@xxxx>
> > wrote:
> >> O.k.
> >> I have been building system test after system test, trying
several
> > different combinations of indicators. Since I use EOD data I
have
> > given up on getting accurate exit values. I get a bunch of
high losses
> > which I attribute to the EOD data not exiting until the close.
> >>
> >> I assume the object of a system test is to have more
winning trades
> > than loosing ones? I have resorted to adding one
optimization so I can
> > look at the overall system performance on a total $$ basis.
The only
> > problem with this is that with the exits being what they are, my
> > losses are humongous. I have been trying to find a system
that is
> > better than 50/50 but have yet to stumble on anything that
yields more
> > winners than losers.
> >>
> >> How do others go about analyzing system tester results?
> >> Thanks, Scott
> >
> >
> >
> >
> >
> >
> >
> >
> >
> >
> > Yahoo! Groups Links
> >
> >
> >
> >
> >
> >
> >
>
>
>
>
>
> Yahoo! Groups Sponsor
> ADVERTISEMENT
>
>
>
>
>
>
------------------------------------------------------------------------------
> Yahoo! Groups Links
>
> a.. To visit your group on the web, go to:
> http://groups.yahoo.com/group/Metastockusers/
>
> b.. To unsubscribe from this group, send an email to:
> Metastockusers-unsubscribe@xxxxxxxxxxxxxxx
>
> c.. Your use of Yahoo! Groups is subject to the Yahoo! Terms of
Service.
------------------------ Yahoo! Groups Sponsor --------------------~-->
In low income neighborhoods, 84% do not own computers.
At Network for Good, help bridge the Digital Divide!
http://us.click.yahoo.com/EpW3eD/3MnJAA/cosFAA/zMEolB/TM
--------------------------------------------------------------------~->
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/Metastockusers/
<*> To unsubscribe from this group, send an email to:
Metastockusers-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|