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I fall in the category of discretionary trader using indicators. I use
three indicators, a revised version of the CCI, a momentum indicator and a
referenced MA for the big trend. I don't use stops but time and if I'm not
profitable right
off the bat I'm looking to get out and do keep a mental monetary stop and
if it hits that I'm gone. Time of day is important and time length of the
trade is important. Hardest thing to do is buy into weakness and sell into
strength but that's what I've found works best because I'm not on the floor
so I can't afford to wait. 10 minutes in the S&P can feel like a month to me.
Robert
Subject: Re: Trend or No Trend
>|
>|
>| 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
>
>
>I would like to hear from the list about any of the following thoughts:
>
>1. Many on this list readily talk about gambler indicators not working,
>mainly because they are all lagging indicators, telling you (as Allan just
>said, "They tell you where things have BEEN", not necessarily where they are
>headed.
>
>2. From discussions on this list, gambler indicators are apparently any and
>every indicator you read about in all of the books on technical analysis.
>
>3. If #2 is false, please list some popular non-gambler indicators.
>
>4. If #2 is true, please list some non-gambler indicators that work, or as
>Allan said, "Is there information in the price series and other intermarket
>information that can give short-term predictability?" (I thought this was
>the objective of all indicator development).
>
>5. Gambler indicators are all basically logically-based and easy to
>calculate. The impression I have of non-gambler indicators is that they are
>rocket science, not published, not generally available to the public, and
>thus the private domain of a few rocket scientists. I consider myself
>"smarter than your average bear", but not a rocket scientist, and currently
>know of no indicators that I think the list would consider non-gambler
>indicators.
>
>6. The comments on the list about this topic unanimously talk about the
>uselessness of gambler indicators and the superiority of non-gambler
>indicators, but then nothing is ever offered up about specific non-gambler
>indicators that work and how they work. Yet specific talk is always
>available when someone has a question about EL code for this or that
>variation of a well-known gambler indicator, as if everyone is really using
>gambler indicators in their work. Why is this?
>
>7. What about improved gambler indicators, like Mark Jurik's JMA, the Visine
>of MAs that "gets the lag out"? Does this make it a non-gambler indicator?
>
>Thanks for any thoughts.
>
>Neil
>
>
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