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At 09:34 AM 10/13/98 -0500, Mark Brown wrote:
>
>>One simple approach that is not too bad is to use two moving averages of
>different lengths.
>
>I prefer this method : I look at a chart and determine what the obvious
>trend is. How do you know what the obvious trend is? Show a chart to any
>10 year old and ask them what the general direction of the chart is UP or
>Down. Once this is determined then I enter the market with a trade size
>thats too big for my account in the opposite direction. Then hours, days
>latter my broker calls me and either tells me I'm a genius or he wants more
>money, at this time I know what the trend really is.
>
>What I'm trying to get across is the following : If you can determine the
>trend thane its too late to do you any good. You should either ignore the
>trend or have a fail safe reversal in your system that automatically buys a
>break in the direction of the trend. Until then you need to go about your
>merry way trading chop ranges, or occupying your time in some other
>constructive manor. If you dont you'll likely die of boredom waiting for
>that trend that can only be identified after the fact.
>
>MB
>
Excellent words. Print the above posting and frame it. This is the essence
of why conventional indicators are gambler functions. They tell you where
things have been (past tense). They only work when the trend is strong
enough that hopping on late still leaves some steam as well as room to
exit, wherever that point comes.
Gambler functions are not leading indicators.
So the question becomes, "Is there information in the price series and
other intermarket information that can give short-term predictability?" If
there is, it probably doesn't reside in tired combinations of even more
tired indicators like ADX, RSI, etc.
Allan
"A common mistake people make when trying to design something completely
foolproof is to underestimate the ingenuity of complete fools." - Douglas Adams
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