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Hi there,
Just my perspective, also based on many years in the market. We
saw guys with good forecasting models, making good forecasts, but
never making money. There is nothing wrong with the model, but it
is never translated into a decision making tool. Trading is about
decision making. If I tell you now exactly where the Dow will be
tomorrow, maybe you can make money. If I tell you where it will be
a year from now, it becomes even more difficult to make money (due
to what Adrian called wiggles). Even with that knowledge, you may
quickly run out of margin as the market does not go to the forecast
in a straight line. You may have such a good forecast that you
cling so desperately to it and make such bad decisions that, by the
time the market hits your forecast, there is nothing left of you!
Now, we use forecasts quite a bit. We often make very fundamental
forecasts, but always make what we call a technical adjustment to
them. Go to our web page, http://www.ferra4models.com and select
the 'about us' link. There you will see a very theoretical graph of
the external and internal factors affecting some phenomena. Think of
the external factors in the markets as fundamental and of the internal
factors as technical. The fundamental stuff eventually works, but may
take quite some time to work through. The technical factors weigh on
the markets much more in the short term.
We try to use both, and sometimes try to estimate for a given ticker
where that crossover point lies - when the fundamental factors start
to be the overwhelming ones. Is it a week from now? A month? A
quarter? Can we trade a market based on such long term decisions?
Again, we use fundamental factors and models based only on
fundamentals as part of our suite of models, but we also try to
translate our forecasts into things that can help you make a decision
in a trading environment from day to day.
Regards
MG Ferreira
TsaTsa EOD Programmer and trading model builder
http://www.ferra4models.com
http://fun.ferra4models.com
--- In equismetastock@xxxxxxxxxxxxxxx, "Adrian Pitt" <apitt@xxxx> wrote:
> For the large majority of people who wish to make money from the
> markets, using forecasting techniques is not the best way to go.
> Forecasting means you are imposing your will upon the markets, and
> frankly the markets don't care who you are. You are far better letting
> the market determine what trades you make, and always being in sync and
> going with the flow so to speak. Now forecasting can be a very powerful
> tool (via such techniques as Elliot Wave Theory) ..but for most, a
> little knowledge is a dangerous thing. I have been in the business of
> forecasting and trading for close to 20 years, just to give you an
> appreciation of where I am coming from. So my comments come from the
> perspective of reality, not some academic mumbo jumbo. Winning isn't
> about looking back and seeing you picked the high for the year. Almost
> every professional trader doesn't really care about trying to pick the
> top and bottom of the market for the year. They are more interesting in
> capturing all those little wiggles in between. The sum of the wiggles
> is many times more powerful than picking the high and low. The problem
> is that many times you won't pick the high or low. And even if you do,
> what do you do with it? How do you know how significant it will be?
> What if you had exited the market months before because you 'forecast'
> the top? What strategy do you have to get back in? You can bet you will
> have many dates and levels over a year that are supposedly supposed to
> be 'highly significant'. Some will actually work out. In the end
> though, its simply not practical stuff on a day to day trading basis,
> nor for investors. It cannot be relied upon to get you into and out of
> markets. Nor can it be relied upon to provide proper reward to risk
> guidelines. It might make you feel great if you do manage to pick the
> high or low for the year, but in terms of return on investment/adjusted
> for risk, its simply not a viable way to go for 98% of traders.
>
> Adrian
>
> -----Original Message-----
> From: bolsaspam01 [mailto:no_reply@xxxxxxxxxxxxxxx]
> Sent: Tuesday, 22 March 2005 5:16 AM
> To: equismetastock@xxxxxxxxxxxxxxx
> Subject: Re: [EquisMetaStock Group] RE: safety in the market
>
>
>
>
> Adrian, could you be more specific why do state that forecasting isn't
> useful? From my novice point of view, forecasting looked like the best
> tool you could use to invest successfully.
>
> Thanks in advance.
>
> --- In equismetastock@xxxxxxxxxxxxxxx, "Adrian Pitt" <apitt@xxxx>
> wrote:
> > Lets assume for a moment that they did pick the day of the crash....
> so
> > what? How many other times where their forecasts that didn't
> eventuate
> > in anything. How do you trade these forecasts? They also picked
> some
> > major highs and lows in the Australian markets many years ago...so
> what?
> > In practical terms it is of little value for investors or traders.
> > Successful people don't make money off forecasts (except the
> newsletter
> > writers). They make it by trading the reality of the market from day
> to
> > day, week to week and month to month. All beginner traders should
> > forget the notion of selecting a marketer based on how well they
> pick
> > turning points. Don't waste years of your search by pursuing this
> > avenue. While it may have some merit, it is more from an academic
> point
> > of view than a practical one. By all means go to the presentation,
> but
> > we aware they are slick and will market to you their wares.
> >
> > Adrian
> >
> > -----Original Message-----
> > From: Dusant [mailto:cooldush@x...]
> > Sent: Monday, 21 March 2005 2:36 PM
> > To: equismetastock@xxxxxxxxxxxxxxx
> > Subject: Re: [EquisMetaStock Group] RE: safety in the market
> >
> >
> > Hormuz,
> >
> > I have written a small article on Gann method of calculating Time
> and
> > Price. Going exactly by the book.
> >
> > http://www.geocities.com/cooldush/gann11jun04part2.htm
> >
> > It is very simple. There is plenty of stuff on Gann on the internet.
> > Google and benefit.
> >
> > As an aside, for a foreign company holding a seminar in Mumbai is
> pretty
> > inexpensive. A rough thumbrule: they would have to pay at least four
> > times the Dollar equivalent if they had held it in Sydney or
> Melbourne,
> > and six times more if it was Europe.
> >
> > Dusant
> >
> > ----- Original Message -----
> > From: hormuz <mailto:hormuzmaloo@x...> maloo
> > To: Metastock group Metastock <mailto:equismetastock@xxxxxxxxxxx.
> com>
> > group
> > Sent: Sunday, March 20, 2005 10:26 PM
> > Subject: [EquisMetaStock Group] RE: safety in the market
> >
> >
> >
> > Thought as much. I guess their products would HAVE to
> > be overpriced considering their expenses in holding
> > seminars in expensive hotels, etc to market them.
> >
> > Nevertheless, if they could identify the one day on
> > which a major decline was expected, it sounds
> > interesting. Out of idle curiosity am attending one of
> > their introductory lectures here in Bombay on April 1,
> > 2005 (quite an apt date).
> >
> > Could you e-mail me some of their material if
> > available with you in soft format. Would like to take
> > a look if possible.
> > Thanks,
> > Hormuz
> >
> >
> > -------original message-----------------
> >
> > Date: Sun, 20 Mar 2005 11:34:36 +1100
> > From: "Adrian Pitt" <apitt@xxxx>
> > Subject: RE: safety in the market
> >
> > The firm has a long history in Australia. While their
> > products aren't
> > bad, they are more sales hype than reality. Their
> > products tend to be
> > overpriced. I have purchased some of their material
> > over the years and
> > I would say there is much better value elsewhere.
> >
> > Adrian
> >
> > -----Original Message-----
> > From: hormuz maloo [mailto:hormuzmaloo@x...]
> > Sent: Sunday, 20 March 2005 2:01 AM
> > To: equismetastock@xxxxxxxxxxxxxxx
> > Subject: [EquisMetaStock Group] safety in the market
> >
> >
> >
> >
> > Hi everybody,
> > Lately a firm called "Safety in the market" has been
> > advertising a course on using the techniques of
> > legendary trader W D Gann for investing in India.
> >
> > They claim to have predicted the largest ever single
> > day collapse on the Indian stock exchanges which
> > occured on May 17, 2004, one year prior to that date.
> >
> > Also, they say they are operating in USA, Australia,
> > Singapore and New Zealand.
> >
> > Has anybody heard of them before. Or taken their
> > course.
> >
> > Regards,
> > Hormuz
> >
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