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Brian,
I probably have less experience trading the S&P than most on the list and
I'm not a rocket scientist either- although I've worked with some, but I'll
defend countertrend trading. IMHO you need to define countertrend trading
with regard to time frames on different markets - Some it works, some it
doesn't - If you wannabe flat and sleep at night and day trade the S&P and
aim to swing trade by identifying high probability (lower risk) turning
points in the market then the last 7 weeks has been better than ever and
you don't need much fancy software to do it - I call "velocity" and
"acceleration" MOMENTUM - (rising and falling) and you can pick up when to
fade a rally on the first continuos downtick of the cash market and a cheap
indicator from Rina systems together with a couple of others which Omega
supply for free.
If your happy to hold on for a week or two or three - then the time frame
moves up to 5/30/81/daily bars - thats too rich for me with an o/n range of
over 2500 points at times-
I understand that some clients of top ten S&P daytrading systems have been
miffed lately as either their systems haven't traded and when they have
they've got whipped out by the volatility - some market conditions are
better traded from what you see - Of course S&P isn't the only market - but
show me a daytrading trend system in the S&P which hasn't been stuffed
lately ?
>Traders,
>
>Interesting. There's a lot of comparatively advanced math used creatively
>here to develop RJP's exact countertrend entry point system. Good food for
>thought and a way to spend a lot of time but is it really necessary?
>
>So far the people that have spoke up in defense of countertrend trading
are:
>
>Stewart Taylor
>Mark Brown
>RJP
>
>What's the pattern here?
>
>Mark Brown has been trading for eons and with a stint trading
professionally
>at Smith -Barney (I'm assuming that's what SB stands for). In addition to
>that he's a programmer.
>
>Stewart Taylor has AT LEAST 15+ years of experience trading nothing but
>futures and manages an investment firm -- I think it's his own. Big bucks
>and lots of experience here.
>
>From the sound of it RJP either has a real good grasp of some advanced math
>concepts and has used them creatively or has the money to pay someone who
>has this to come in and teach him about it as it applies to the markets.
>Again, lots of experience.
>
>So what's the pattern here? All these guys have tons of experience and
have
>access to resources the average (successful) trader may or may not have.
>Experience is essential when developing systems that attempt to pick
>bottoms.
>
>Question: Is it the right for you? Based on the above, only if you have:
>
>1. Have many years of experience
>2. And/or Have advanced math experience
>3. And/or Have the $$$ to buy in a decline, buy in a decline, buy in a
>decline (or sell)
>
>Well what do those do who don't have this? The answer is trade with the
>trend.
>
>Again, it's a fact. The probabilities favor buying dips in a trend or some
>other methods of trading witht the trend. There's too many markets out
>there to trade with the trend and life's too short to try and develop a
>system that works countertrending when I can make equal money trading with
>the trend.
>
>The message to me is that it's easier to make BIG money trading with the
>trend.
>
>Are there any others out there who want to defend countertrend trading?
>
>Good Trading.
>Brian.
>
>-----Original Message-----
>From: Val Clancy [mailto:valclancy@xxxxxxxxxxxxx]
>Sent: Friday, September 04, 1998 10:21 AM
>To: RJP
>Cc: Omega List
>Subject: Re: Velocity, acceleration, tensors
>
>Comments follow:
>
>RJP wrote:
>
>> Velocity and acceleration calculations even at their most basic levels
can
>> reveal probable reversals with reasonable degree of accuracy. Such
studies
>> (including Browian motion) can be successfully applied to commodity
>trading
>> and system development but how?The answer is indeed not a simple one and
>is
>> beyond the scope of most traders.
>
>I think that velocity and acceleration of price or any other variable can
be
>used
>but are not of highest importance. You can measure acceleration in buying
or
>selling or buying / selling speed. This can lead to better accuracy in
>determining
>a possible magnitude of the price move. However acceleration and velocity
>can
>never be main market variables since they are derivatives.
>
>>
>>
>> A scalar is used to describe an event with one number, such as the
closing
>> price for a commodity. Vectors are used to describe events with more than
>> one number i.e. open, high, low, and close to describe one vertical bar.
>> Speed or non-directional velocity is described by a scalar and velocity
>> which is directional by vectors.
>
>Not clear about " velocity by vectorS" - I think you meant by a vector.
>
>> Events such as market movement which cant
>> be easily described by vectors use tensors instead.
>
>Give me an example here how you would define a market movement in tensor.
>
>
>
>
>> Commodity systems are
>> tensors which expand, compress, rotate, deviate time, price and their
>> derivatives.
>
>Explain compress, rotate.
>
>> Tensors can change the length and direction of lines, but only
>> super tensors can change a straight line into a curved line.
>
>Give me an example of tensor vs super tensor.
>
>> Commodity
>> systems based on super tensor mathematics can reveal powerful
information;
>
>Like what information? give me a couple of results here.
>
>> backed with statistical foundations it is indeed possible to develop
>> anti-trend systems incorporating physical relationships with accuracy's
of
>> better than 80% as to identifying the exact price (sometimes to the tick)
>at
>> which a move will terminate and reverse.
>
>Sounds like over optimization to me.
>
>> It is essential that all trend
>> following systems incorporate in some form or other anti-trend components
>as
>> studies that I have conducted have shown that the performance of such
>> systems way exceed the normal trend following systems.
>>
>
>I pure/good system does not have to have a trend definition built in it.
The
>word trend
>is confusing and hard to define in math terms.
>
>> I'm interested in comments and / or a discussion on how other traders
have
>> applied velocity etc to commodity trading.
>
>Here is an car example: if a car has 20 gallon gas tank, travels and a
speed
>of 40 mphat 30 mile per gallon fuel efficiency. How many miles will
>the car go before it stops
>if there are 10 gallons in the tank? = 300 miles at 40 mph.
>
>>
>>
>> Thanks
>>
>> RJP
>
>You can describe market in vectors/tensors/matrix. However tensors imply
>that there is a
>transformational law that exists between them.Care to comment?
>Val.
>
>
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