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I'd like to put in my 2 cents about Roy's newsletter and offer my own
experience as someone new to this field who has closely followed his
newsletter (and this message board).
I've read and re-read every one of Roy's newsletters. Each one
presents a goldmine of information each time around. If you implement
the amazing B&Q indicators, the DCF, the noise filter, use an RSC
methodology (with a tool such as Jose's uRSC), use MAs to guide you on
weekly and daily market bias, accept the importance of always letting
the market bias dictate your trading strategy, trade from a
prescreened list, understand sector rotation and take a top-down
approach to trading -- just like it says in quite some detail in Roy's
newsletter -- you will be a better trader, period. At a minimum,
you're going to better off simply because each of the steps I just
mentioned skims a few probability points in your favor. And you can
augment all of this with additional reading over time. I believe I am
identifying (and trading) some much higher-than-average probablility
trades than many traders out there thanks to what I have learned from
Roy's newletter. Keep it coming Roy.
--- In Metastockusers@xxxxxxxxxxxxxxx, "superfragalist"
<jackolso@xxxx> wrote:
>
> 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
> >
> >
> >
> >
> >
> >
>
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> >
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