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"...Sebastian mentioned trading using seasonality. I've studied
seasonality and don't sgree with everything he said. I could have
given references to a large number of studies which don't support
portions of his hypothesis, but I would rather see him write a couple
of articles for Roy's newsletter explaining exactly how to make money
from seasonal trading. ( or post them on here) The "exactly" is the
key term here. If a newbie's is going to make any money using seasonal
trading, then they need a specific method and not just a theory..."
I only mentioned seasonal trading as an example of a very simple
benchmark method that can match or outperform complex, high-
maintenance systems. In my own trading I factor-in seasonal
considerations, but don't use seasonals as a stand-alone system.
As to giving away the details of what I do, no thanks. Some
knowledge comes too hard to share, or even sell. However, the
concept of how seasonal bias affects the stock market is easy to test
for anyone who wants to do it.
In fact, Super, I think your trading method could benefit by using
seasonal factors (probably other macro-factors, too). There's a
trader I communicate with on another board who trades (long only)
high earnings growth/high relative strength stocks, but only when the
general market is strong. The market isn't equally strong all year
long, so he trades aggressively at the best times and is out
completely at other times (like now). Like you, he also supports
himself by his trading.
Luck,
Sebastian
--- In equismetastock@xxxxxxxxxxxxxxx, superfragalist <no_reply@xxxx>
wrote:
> MG, you've been gone so long, I thought you had been kidnapped and
> were being held for ransom until your employer paid it, which of
> course I didn't think would ever happen.
>
> Roy, didn't write the post you're referring to. I did--Super. Yes, I
> trade. I make a very good living, other than that I keep my track
> record to myself because I'm not trying to sell my services. Every
> year my trades are audited by my accountants, but that's for the
> government and all the paperwork I have to file, not to back up my
> trading results to use in advertisements.
>
> I'm not sure what your question is regarding. I promote Roy's
> newsletter because there is a lot of basic material in it that makes
> using MS easier. Next month for example, he's going to publish a
> simple date filter for use in the systems tester. Most people don't
> have a clue how to load 1000 bars of data but only test 200 bars of
> it. Often an indicator will not work properly if only 200 bars are
> loaded. The systems tester doesn't allow for loading more bars than
> what's being tested. A major problem for many systems.
>
> In addition, in the newsletter he puts a number of really good
> indicators that have been tested by a number of people including Roy
> and myself. These indicators are coded correctly. And work as
described.
>
> Sites like Kalosz post a lot of code that's not programmed right and
> the people who copy it have no idea of the vetting process used to
> verify it. In most cases, there was none.
>
> The same is true for Equis and TASC. Sometimes MS code published by
> them is not exactly correct.
>
> Roy's code is vetted, tested and re-tested for proper functioning.
> That takes a lot of time and experience.
>
> And finally, I recommend the newsletter because Roy has articles in
it
> written by people who actually trade.
>
> This editorial by the editor of Active Trader Magazine explains it
> better than I can.
>
> http://www.activetradermag.com/enote.htm
>
> Over the years I've met a lot of people involved in this business
and
> the overwhelming majority of those who make a living from the
trading
> business don't trade, including the gurus. To me that's somewhat of
a
> problem if they're going to be giving trading advice and selling
> trading products.
>
> Roy, to his credit, doesn't give trading advice. He will tell you
his
> expertise is in the programming.
>
> My expertise is not in the programming. I can program some but I'm
not
> nearly as good as Roy. Jose and Roy hose me all the time over my
> programming skills.
>
> My skill is in risk avoidance trading. I've developed a lot of
> strategies, techniques and methods for trading that avoid risk while
> still providing a very respectable return. I'm not going to explain
> the details about why I decided to go that way. It's all about
> probabilities and how to position trades so the probabilities are in
> your favor.
>
> Part of trading is luck as your Romanian said. To me the largest
> factor in success is knowing the probability of your outcomes,
> understanding the degree to which those probabilities can fluctuate
> and under what conditions they are most likely to move outside of
the
> norm, and then developing a strategy which positions you to use
those
> probabilities in a successful outcome. I agree with your Romanian
> friends assessment of TA. To me it's useful, but it's hardly the
> ticket to success. I've been using TA for 30 years. I felt that way
> when I started, and I still feel that way. I first programmed TA on
> main frames. The development of fast desk top processing has made TA
> more accessible but I don't see a lot of improvement in the
returns. I
> do see millions more systems test being run and lots of new trading
> methods and theories, but the returns haven't gone up much. The good
> traders make about the same thing as good traders did 30 years ago.
At
> least as much as I can remember. (The memory isn't as good as it
once
> was.)
>
> Because of my age, I would rather have a higher probability of
making
> X% than to have a lower probability of making X + Y%, even though X
> +Y% is going to make me more money over the long run. X +Y% is
likely
> to have a wider std deviation, (huge drawdowns) which is something I
> don't like. I don't care about maximizing my returns. I've written
> about why that's the case before so I won't repeat it. Consistency
> year in and year out is more important in my approach to trading.
>
> Again on these boards, I won't openly discuss my results, methods or
> strategies in detail. But they work for me.
>
> However, any strategies, methods or other stuff I put in my posts, I
> welcome anyone to test. However, I'm not impressed by people
> expressing uneducated opinions or observations from a chart, or
other
> subjective thinking. If they have objective test results which show
> that what I said is not sound or that there is a better way, then I
> would love to see them and have those results shared with others on
> here.Just because someone disagrees with what I wrote, however,
might
> make for interesting debate but it does nothing to establish the
> validity, or non-validity, of the material. It's political debate
for
> the sake of politics, which has nothing to do with fact.
>
> Sebastian mentioned trading using seasonality. I've studied
> seasonality and don't sgree with everything he said. I could have
> given references to a large number of studies which don't support
> portions of his hypothesis, but I would rather see him write a
couple
> of articles for Roy's newsletter explaining exactly how to make
money
> from seasonal trading. ( or post them on here) The "exactly" is the
> key term here. If a newbie's is going to make any money using
seasonal
> trading, then they need a specific method and not just a theory.
>
> Using my strategy, here are the trades I've made recently. I entered
> these trades on May 27.
>
> MCRS; DNA; URBN; KBH; CME; CHS; TALX; HOV; TPX; SNDA; NNI; VMSI;
CBG;
> AFFX; HANS; CNXS; TS; MTH; TOL; QSII; GOOG
>
> In this kind of market, I use tight stops. I was stopped out of
QSII,
> NNI and AFFX. I'm still holding a few of these, but most were sold
> earlier in the week. I picked these trades based on strategies I've
> talked about before. The SPX and it's moving averages, the IBD,
Value
> Line lists, as well as the exploration I've given out the code to.
>
> In the last two weeks I've made a couple of refinements on how I
pick
> from those sources. The tweaking would have eliminated NNI, but not
> the other trades. I haven't traded anything since May 27 other than
> the exits. I'm not expecting to enter any long trades for a week or
more.
>
> Trading is a lot of hard work. Ten minutes of trading, ten hours of
> prep. Ten hours of prep to adjust the probabilities in my favor. Ten
> minutes of trading to find out if I did my homework properly. All in
> all the indicators account for maybe 10% of the favorable
> probabilities. Value Line, the IBD and exploration lists accounted
for
> perhaps 50% of the total. My experience contributes 20% and luck
the
> other 20%. It takes all that and a lot of time to make some money--
at
> least for me.
>
> For all that effort, I sometimes made more money than I would of
made
> using William Bernstein's asset allocation models from his book the
> Four Pillars of Investing. However, over the last 10 years on an
after
> tax basis, I would have been somewhat better off with Bernstein's
> methods because of capital gains. In addition, I would have had more
> free time to work on other projects which probably would have left
me
> healthier, happier and less ornery.
>
> The one benefit I've gotten out of trading is the self confidence
that
> I can make money regardless of the market conditions. Trading gives
me
> long term employment that I can work at when I want, put on hold
when
> I want and work at until I get tired of working regardless of my
age.
> The downside is as good as this all sounds, 99% of investors would
be
> better off using Bernstein's simple methods, which have produced
> excellent results in up and down markets since I've been tracking
them
> for the last ten years.
>
> I absolutely do not recommend trading. I recommend smart asset
> allocation as the best method of making money and reducing risk. It
> guarantees that overtime anyone can accumulate wealth. Most people
who
> trade redistribute their wealth to other people.
>
> So there's my answer to your question. I hope it's good enough that
> you feel I can still post sometimes.
>
> Sebastian has convinced me to stop trading, so I'm looking for some
> useful hobbies. I'm thinking about bowling--or maybe the rodeo and
> bull riding for a couple of years before medicare kicks in.
>
> Super
>
>
>
>
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, mgf_za_1999 <no_reply@xxxx>
wrote:
> > I feel bad about this post already, and wish I could take it
back. I
> > really do not want an answer nor am I asking for Roy's track
record.
> >
> > But....to be far.....
> >
> > What I really mean is this: you mention all the guys that write
books
> > or magazines but won't survive trading. You also actively promote
> > Roy's work.....
> >
> >
> > Again, simply to be fair.....
> >
> > The same yardstick should apply don't you think.
> >
> > Regards
> > MG Ferreira
> >
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