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In a message dated 97-12-28 03:23:44 EST, you write:
> I am interested in day trading stock index futures, and I am wondering
> if there are any day traders out there who share my views on market
> analysis and use them to trade the s&p intraday. Here goes:
>
> There is only one type of technical analysis that interests me in the
> slightest, and that is any type of analysis that attempts to actually
> measure the amount of buying and selling taking place in a
> given market. I refer to this as "cause based technical analysis",
> because it attempts to analyse the cause of price movement, rather than
> measure the sypmtom, i.e. price action itself.
<<SNIP>>
> etc.
>
> What I am trying to get at here is that it is possible to measure
> supply/demand and hopefully forecast price through other indices, rather
> than trying to use past price action to predict future price action
> (such as is the case with moving averages, momentum, etc.). Many people
> say that technical analysis is useless because of the ever changing
> nature of the markets, however, one thing that never has changed and
> never will is that buying and selling moves prices, and if you can
> accurately measure it, then you'll be ahead of the game.
>
> Some of Dennis Meyers' systems are really good examples of the type of
> analysis I am talking about, but these are all long term systems. So my
> question is, are there any day traders out there who are using this type
> of analysis in their trading, and if so, how well is it working?
>
> Thanx,
>
> Dave
>
Dave
I'll throw in my two cents as it applies to daytrading, which is what
I do. I have played extensively with things like tick volume, Thrust
Oscillator, advances, declines, Tiki, Tick etc. Another Idea which was a
friend of mines involved building a cash index based on the 20 stocks which
are posted on a board on the CME floor. This index was a capitalized index
using live data. EVERYTHING lags the S&P.
I personally believe you will not succeed this way as cause isn't
measureable until someone does something which is reflected in price. Stop and
think about it. How can tick for example change until the stocks change
PRICE. Same thing is true of the advances and declines. Tick volume doesn't
change until there is a Price action. I built a cumulative indicator similiar
to the Larry Williams accumulation/distrubution indicator. Turned out to be a
great artificial price. Nothing more. ((Note to all, I no longer have it so
please don't ask))
Let me give you my definition of technical analysis: To me Technical
Analysis is nothing more than making an observation of some nature about the
data, that you can repeatedly identify, and then act on. BUT, you must be
able to act in a timely manner.
It has been my experience that all the kinds of indicators you are
talking about will give their signals, one to two bars, to late. In
Daytrading the Index Futures, particularily the S&P, that means failure.
Price is what you are trading, Price is what your going to have to base
decisions on.
Pete
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