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Me three.. and had Super not pounded over and over again the simple
concept of trade uptrends differently then you would downtrends, use
MMA's, my trading would not have improved. He has even dumped code on
us that all you had to do was cut and paste and you'd see a system as
good as the best that MS offered, and many times better than some of
the crap that gets sold as Add=on plug=ins.. I could go on.. so if I
disagree with Super on something, and I might occasionally do, I find
its trivial or not worth fussing on-line about.
Keep it coming Super.
--- In equismetastock@xxxxxxxxxxxxxxx, "metastkuser"
<andysmith_999@xxxx> wrote:
> I wholeheartedly agree with Roy on Super's generosity.
>
> --- In equismetastock@xxxxxxxxxxxxxxx, "Roy Larsen" <rlarsen@xxxx>
wrote:
> > Hi Andy
> >
> > You mean your grandmother hasn't subscribed yet :-)
> >
> > As for Super's "sense-of-humour bypass", I've had the good fortune
> to meet many generous people on this and other MetaStock lists,
> including your good self, and in my opinion Super is at the top of
the
> "generosity" list by a country mile. His obvious support of MSTT is
> merely the tip of the iceberg, and I'm sure there are a number of
> others out there that would say much the same thing. I don't always
> agree with him, but I still have a huge respect for him as a trader
> and as a person.
> >
> > Kind regards
> >
> > Roy
> >
> > ----- Original Message -----
> > From: Andy
> > To: equismetastock@xxxxxxxxxxxxxxx
> > Sent: Wednesday, September 07, 2005 3:53 AM
> > Subject: RE: [EquisMetaStock Group] Trading ain't gambling, is it?
> >
> >
> > MG, did you know that Super had a sense-of-humour bypass a few
> months back? It was about the same time that he ran out of useful
> things to say and so fell back on his "I've tested everything and
read
> every book, so listen to me" routine. Oh that and that we should all
> get our grandmothers to subscribe to Roy's newsletter (or something
> like that).
> >
> >
> >
> > Sorry Super, I don't wish to get too personal here, but the plain
> fact is that you are misleading people with statistics and
semantics.
> And you seem lately, through no fault of your own I'm sure, to have
> the acquired the aspect of some emminent being who must not go
> unchallenged. Sorry.I've always been a heretic by nature, so I'll
> challenge the almighty Word of the Super-being!!
> >
> >
> >
> > Trading = gambling. Yeah, really? For a start, I think that you
mean
> Speculating = Gambling (if we're going to be pedantic, then let's do
> it properly). But to get to the concept, are you really saying that
> buying a share is similar to throwing a dice and betting that a six
> will come up?
> >
> >
> >
> > It seems to me that you are confusing "risk" with "hope". *Pure*
> gambling (I'll deal with the pros in a minute) is all about making a
> bet and "hoping" that you win. If a trader did nothing more than
stick
> a pin in the Wall Street Journal financial pages and bought that
stock
> then he/she would be gambling in the same way. But I think most of
us
> are beyond that level. We have tools at our disposal to put the odds
> in our favour. A *pure* gambler has to cheat to get the same
advantage
> - he has to get the dealer to throw weighted dice, or he has to
> card-count. Sure he/she can employ good money management to try to
get
> the probabilities in his favour over the long run - but this is a
> method that we also get to use. And yes, there is another parallel
> too.the gambler can "study form" if, for example, he is betting on
the
> horses. But that's the same as studying market fundamentals isn't
it?
> >
> >
> >
> > So, all-in-all, technical analysis means that trading *can be* and
> *should be* much better than simply doing what the horse tipsters
do,
> no matter how good their form book is. When we use charts properly
we
> give ourselves the opportunity to change our bets in the middle of
the
> race, depending on how it's panning out. We can cut our losses if
the
> horse starts off facing the wrong way. A gambler is stuck with his
> $1000 bet at 125-1 after the starting gun goes off. We can sell out
> and maybe get $900 back.
> >
> >
> >
> > It's a bad analogy. And it misleads people into thinking that they
> have little chance.
> >
> >
> >
> > Trading is also not the same as poker as you suggest. A
professional
> poker player achieves his greatness not through the cards he is
dealt,
> but by the way he copes with the situation and out-psyches his
> opponents. If a trader, good/bad/indifferent, tried to 'bluff' the
> market then the market would not give a damn. In poker there are six
> or so players. The market is a little bigger than that.
> >
> >
> >
> > I would suggest that, if you're going to draw a parallel then it
> should be that: Trading = Business. Approach trading like you would
> approach running any other successful business and you stand a
chance.
> Gambling is for mugs, there is only a minimal chance of controlling
> the outcome - most success lies in pure luck and the rest in
deception
> of the house or your opponent. Trading is a business: we *have
control
> over our market risk*
> >
> >
> >
> > Also, I've read this "95% of traders fail" line a few times now
like
> it's some kind of unique thing to trading. OK, you didn't mention it
> in your last post.but you certainly have before and now people are
> quoting you to boot. The plain fact is that if you look at ANY
> business at all over a decent period of time then most of them
fail !
> A very hefty percentage of them (I don't know what that number might
> be, but it should be pretty high) fail in the first year, but if you
> look at the Dow Jones now compared to the same index 20 years ago
then
> how many of those old companies are still there? Even the successful
> business eventually go under it seems!! Why? Is it something to do
> with the fact that they are run by human beings and that those
> businessmen don't adapt very well to changing market conditions?
Sound
> familiar?? Is there perhaps some commonality between why human
beings
> as businessmen fail to adapt and why human beings as traders fail in
> the same way. And why people like gambling so much??
> >
> >
> >
> > The "drop out rate" in poker is about the same as that for trading
> because the "drop out rate" in just about every money-making fad is
> the same. It's the psychological make-up of the people that take
part
> that is the common link, not the games/businesses (call them what
you
> like) themselves. There are just as many bad businessmen out there
as
> there are bad gamblers, as there are bad traders.
> >
> >
> >
> > Ø Basically I make highly educated, well thought out, good
> probability
> > guesses.
> >
> >
> >
> > Well I'm 'guessing' that Bill Gates probably did the same when he
> set up Microsoft. Good for you. But that is *not* the same as what a
> successful poker player does.
> >
> >
> >
> > So that means that the rest of us might as well all give up and
work
> for Walmart, eh? We're doomed.DOOMED I say!!!
> >
> >
> >
> > Oh, come on.it's not that bad. Just remember that success lies
> within.keep an open mind and never fail to adapt.
> >
> >
> >
> > And that 89.346% of all statistics are made up on the spot.
> >
> >
> >
> >
> >
> >
> >
> >
> >
> --------------------------------------------------------------------
------------
> >
> > From: equismetastock@xxxxxxxxxxxxxxx
> [mailto:equismetastock@xxxxxxxxxxxxxxx] On Behalf Of rdb104
> > Sent: Tuesday, September 06, 2005 10:12 AM
> > To: equismetastock@xxxxxxxxxxxxxxx
> > Subject: Re: [EquisMetaStock Group] Trading ain't gambling, is it?
> >
> >
> >
> > I haven't done your Freeburg research but from experience I agree
> totally.
> >
> > There is always uncertainty..and most of these guys think you can
> 'find' the grail when dealing
> >
> > with randomness most of the time. I don't know why anyone thinks
> that fear and greed driven by emotion
> >
> > can fit neatly into some mathematical formula(s).
> >
> > ----- Original Message -----
> >
> > From: superfragalist
> >
> > To: equismetastock@xxxxxxxxxxxxxxx
> >
> > Sent: Monday, September 05, 2005 8:58 PM
> >
> > Subject: [EquisMetaStock Group] Trading ain't gambling, is it?
> >
> >
> >
> > Well, I guess we have somewhat different opinions MG.
> >
> > I've got a pile of research that I'm going through right now
from
> > Nelson Freeburg. I think he would disagree with some of your
points.
> > He's done many thousands of tests over the last 13 years. He has
> > trading systems that have traded only 9 or 10 times over 20
years but
> > have beaten buy and hold by a few percentage points. Some of
those
> > systems have winning trade percentages as high as 80%. There's
nothing
> > academic about them.
> >
> > A system making only 9 trades in 20 years says nothing about
how long
> > a trade lasts. It says nothing about the cost of margin, or the
amount
> > of money someone can make. Some of Freeburg's systems have
benefited
> > from margin and some haven't.
> >
> > He also has several systems that have been backtested for
periods of
> > 20 to 50 years. During that time, they showed consistent
performance
> > but in the late 90's the systems started to drop off sharply in
> > performance, and some failed completely.
> >
> > I'm not going to speculate on whether gambling is a sin, but
many
> > types of gambling such as poker have the elements of luck,
skill and
> > probabilities as their components. In the hands of a truly
skilled
> > player, which there are very few, the odds are on the side of
the
> > player. Based on my perspective, and not yours, trading is
exactly the
> > same thing. You have to be lucky, skilled and have
probabilities on
> > your side.
> >
> > If you look at the top poker players over the last 20 years,
none of
> > them made money consistently every year, but over the 20 years
they
> > did very well. They also had some losing years and some big
winning
> > years.
> >
> > Trading got popular when it was advertised and talked about all
over
> > television. Poker is now popular for the same reasons. Every
> > once-in-a-while someone without truly good skills can get lucky
and
> > win big. That's why a lot of people take up trading who don't
have a
> > clue as to what it takes to be consistently good at it, and
it's the
> > same reason people start playing internet poker and then throw
down
> > $10,000 to play in a tournament. It's takes about $500,000 in
front
> > money to play most of the world poker tour. How many players
make more
> > than it cost them to play? How many traders make more than it
costs
> > them to play? The drop out rate is about the same.
> >
> > I use some of the same systems that Freeburg has been working
with as
> > part of my market conditions barometer, which improves my
winning
> > percentages as I've written about before. I'm hoping that some
of the
> > improvements I've come up with to these systems will increase
the
> > returns that Freeburg has shown over long periods of time. I
don't
> > know yet. The couple that I have worked on so far have had very
good
> > test results.
> >
> > In my trading I stay keenly aware that on any day, I may not
win. I've
> > educated myself to as high a level as possible regarding the
game I
> > play. I've tested and retested everything I do so I know the
> > probabilities. I've practiced and practiced and practiced many
> > thousands of times before stepping up to table to play with real
> > money. Now I've played it live for several years, and I know
pretty
> > well what I can expect to earn. However, I also know that when
I'm
> > lucky, I make more money than when I'm not. I know the market is
> > unpredictable and may not deal me the cards I need, even when
the
> > probabilities are 99 to 1.
> >
> > Basically I make highly educated, well thought out, good
probability
> > guesses. Well, now I'm guessing that if that's not gambling,
it's
> > really really close.
> >
> >
> >
> >
> >
> >
> >
> >
> >
> >
> >
> > --- In equismetastock@xxxxxxxxxxxxxxx, mgf_za_1999
<no_reply@xxxx>
> wrote:
> > > If your system trades 9 times in 20 years, either give the
money to
> > > some index manager, or put it in the bank. You are not
trading, you
> > > are buying and holding or investing. If you add any
conceivable
> > > gearing then either you will run out of margin, or pay
through your
> > > ears in carry over the 20 years with just 9 trades.
> > >
> > > Anyhow, 9 trades in 20 years sounds academic to me - 30
trades plus
> > > degrees of freedom sounds practical to me.
> > >
> > > I do use such long term, 9-trades-in-20-years systems to
extract the
> > > long term trend from a ticker. But I do not use that as a
trading
> > > decision - just as part of the input.
> > >
> > > Yes I agree with you, trading is not investing. But I
certainly
> don't
> > > think trading is gambling. It is gambling if you don't know
> what you
> > > are doing, probably with much worse odds than you'd get in a
> gambling
> > > house. Trading is buying and selling of financial instruments
> with a
> > > view to making a speculative profit while gambling is
> statistical and,
> > > given the odds, a sin!
> > >
> > > Regards
> > > MG Ferreira
> > > TsaTsa EOD Programmer and trading model builder
> > > http://www.ferra4models.com
> > > http://fun.ferra4models.com
> > >
> > > --- In equismetastock@xxxxxxxxxxxxxxx, superfragalist
> <no_reply@xxxx>
> > > wrote:
> > > > Your premise is from a purely mathematical view,
specifically
> > > > statistical. However, the market doesn't always supply data
in a
> > > > complete packages ready for statistical testing and
inference.
> > > >
> > > > Suppose we have a market timing system that has made only 9
> trades in
> > > > the last 20 years and all of the trades have been highly
> profitable.
> > > > Do we use the system or not? There are not enough trades to
> validate
> > > > the results.
> > > >
> > > > We can wait another 40 years or so and we'll probably have
> enough data
> > > > and enough trades to make statistically meaningful
inferences.
> > > >
> > > > None of this is neat, precise or absolute. And there are no
> hard and
> > > > fast rules for how many trades a system needs to give good
test
> > > > results. There are approaches which are better than others
> like this
> > > > one by MG, but there is no one correct answer to the
question.
> > > >
> > > > After many millions of systems tests and a lot of trading
> years in the
> > > > markets, no one has come with a trading system, a timing
> system or any
> > > > other system that works consistently over long periods of
market
> > > history.
> > > >
> > > > Trading is not investing, it's gambling with an edge to the
> player if
> > > > the player is an expert at that game. However, the house is
always
> > > > changing a little something here or there that changes the
> > > > probabilities of events just enough to change the game.
It's the
> > > > players job to stay up with these changes and adapt well
enough to
> > > > keep the edge on the house.
> > > >
> > > > Newbie's just don't get how long it takes and how hard it is
> to get
> > > > the edge consistently and over long periods of time. A
newbie
> thinks
> > > > if they make money one year, they're going to be a
successful
> trader
> > > > every year. Call me in twenty years with your track record
and
> if it
> > > > measures up, I'll send you your certificate of validation.
> > > >
> > > >
> > > >
> > > >
> > > >
> > > >
> > > >
> > > >
> > > > --- In equismetastock@xxxxxxxxxxxxxxx, mgf_za_1999
<no_reply@xxxx>
> > > wrote:
> > > > > The 30 trades is based on the central limit theorem -
after
> about 30
> > > > > observations things settle down if the mean of random
samples
> > follows
> > > > > a normal distribution. There are several assumptions in
this
> > > > > approach, but it should give a good idea. I'd push it up
a
> bit, say
> > > > > to 35 or 40. Also, you need to adjust for degrees of
> freedom if you
> > > > > do any optimisation. Suppose your system is driven by 1
> parameter,
> > > > > then you must add this to the 30. Suppose you have a big
system
> > that
> > > > > uses say 10 parametrs - then you need at least 40 trades.
> > Especially
> > > > > if the system gets bigger, it needs more trades to give
any
> > > > > confidence, and I will feel better if such a system
produced
> good
> > > > > results in 50 or more trades.
> > > > >
> > > > > Another, excellent way to test is to use a hold out
sample.
> > Build the
> > > > > system on a portion of the data, say an 80% sample. Then
> test it on
> > > > > the rest and you can see if you have a winner or fools
gold.
> The
> > > > > *proper* way to do this is to segment the sample in say 10
> > blocks (of
> > > > > 10% of the data each). Now you choose randomly any 8
blocks,
> > optimise
> > > > > the parameters of the system on it, and test it on the
> remaining 2.
> > > > > Then you choose another 8 blocks randomly, optimise the
> system, test
> > > > > it on the remaining 2 and so on. After you've done this
say 100
> > > > > times, you test the results.
> > > > >
> > > > > For this you need special software - one good example can
be
> > found at
> > > > >
> > > > > http://weka.sf.net
> > > > >
> > > > > In practise, just chop off the most recent 20% and you'd
get
> a good
> > > > > idea if the system will work or not.
> > > > >
> > > > > Regards
> > > > > MG Ferreira
> > > > > TsaTsa EOD Programmer and trading model builder
> > > > > http://www.ferra4models.com
> > > > > http://fun.ferra4models.com
> > > > >
> > > > >
> > > > > --- In equismetastock@xxxxxxxxxxxxxxx, "rvalue1"
<rvalue1@xxxx>
> > wrote:
> > > > > > I would contend that if you generated >30 trades in the
up
> > > direction
> > > > > > for a sufficiently long period 2 years or so, you would
have
> > > > > > confidence that the system does well in the up
direction. Same
> > for
> > > > > > down and catch the sideways as it transitions. Very
> unusual to
> > > find
> > > > > > a great system up, down and sideways!! If you have one,
> let me
> > > know.
> > > > > >
> > > > > > If you are waiting for 1000 trades, you must trade very
often.
> > > > > >
> > > > > > --- In equismetastock@xxxxxxxxxxxxxxx, "Ed Hoopes"
> > > > > > <reefbreak_sd@xxxx> wrote:
> > > > > > > I recently attended a lecture by Keith Fitchen, the
> author of
> > > > > > several
> > > > > > > successful trading systems most notably Aberration.
He says
> > that
> > > > > > > statistics on more than 1000 trades must be compiled
> before the
> > > > > > > results can be considered valid.
> > > > > > >
> > > > > > > Ed Hoopes
> > > > > > >
> > > > > > > --- In equismetastock@xxxxxxxxxxxxxxx, chichungchoi
> > > <no_reply@xxxx>
> > > > > > wrote:
> > > > > > > > Does anyone know how many trades the evaluation
needs
> to be
> > > sound
> > > > > > > > statistically?
> > > > > > > > Thank you in advance
> > > > > > > > Eric
> >
> >
> >
> >
> >
> >
> >
> > SPONSORED LINKS Business finance course Business finance online
> course Business finance class
> > Small business finance Business finance schools Business
> finance small software
> >
> >
> >
> --------------------------------------------------------------------
----------
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> >
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> >
> >
> >
> --------------------------------------------------------------------
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