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Metastkuser, you are right about what you are saying and doing. I've
explained it many times. There are easy ways to make money and hard
ways to make money, 99% of the people choose to make it hard. Oh, well!
--- In Metastockusers@xxxxxxxxxxxxxxx, "metastkuser"
<andysmith_999@xxxx> wrote:
>
> 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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> > >
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> > > Metastockusers-unsubscribe@xxxxxxxxxxxxxxx
> > >
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