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Walt -
I completely agree with you, but would add that the relevance of a pattern
depends very much on where you find it. For example, a two-bar reversal in
the middle of a swing should not be of value, but up against res/sup lines
it would be a different story; for a J-Hook to have real possibility of
turning the market, it has to be into new territory. Patterns in themselves
have little meaning, it is the way they set up, where they set up and how
they fit into the context of Today's map, as it is unfolding, that counts.
That means taking a view and knowing what to do if that view is wrong, etc,
etc. It is what discretionary trading is all about.
So far as I can see, half the reason why mechanical systems fail in the end,
is because of the difficulty in being able to cover all the different
situations, possibilities, actions, reactions, etc that have to be taken
into account as part of the trading, decision making process.
Of necessity, the computer has to have a rigid discipline, because it has to
be programmed with a rigid discipline. The person programming it has to
know all the permutations that the eye is seeing as the price action
unfolds, if (s)he is to duplicate the human brain power. Perhaps one day a
programmer will be able to do that and then we will have the Holy Grail - or
rather, the guy who did it will, because it would certainly never be for
sale if it really worked.
Tell me a system or an indicator that can match, let alone beat, the human
brain as it watches the leading edge of price action? Sure you can program
all the factors and environment leading to the leading edge, but not the
leading edge, itself. If you are day trading, the leading edge is what
counts, because you are operating within a very short time frame, if you are
position playing you can use a multitude of indicators that work with the
lag of end-of-day data.
In DeMark's book, a copy of which I was given when it first came out, as a
sop by the organizers of a seminar in which he had been billed to speak, but
didn't show, all his charts are day charts or greater. His huge list of
Trademarks are, in the main, ordinary sounding indicators with a TD stuck in
front, but I am staggered the bill for all of them would amount to $2,000
(mentioned by Brad Rylander below).
Glad I day trade and don't need them!
Bill Eykyn
-----Original Message-----
From: Walt Downs <knight@xxxxxxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Friday, October 30, 1998 8:00 am
Subject: Re: Opinions on "The New Science of TA"
>Hi Allan,
>
>As a trader who relies heavilly on combinations of pattern
>testing and market psychology, I spent some time looking
>at DeMark's stuff.
>
>Rule number one in statistical pattern testing is that
>you *can not* create exceptions to the pattern. The
>pattern either works in the given market or not. This
>is what I did not like about DeMark's stuff. Pattern
>doesn't work? Make an exception to the rule....
>With each exception, the pattern loses value in
>practicality and statistical reality. (IMO)
>
>Walt Downs
>CIS Trading
>
>Allan Kaminsky wrote:
>>
>> At 11:49 AM 10/27/98 -0500, Brad Rylander wrote:
>> >Last night I spent 3 or 4 hours with Tom DeMark's "The New Science of
>> >Technical Anaylsis." This was either not enough time or *way* too much.
>> >
>> >I was left with the impression that I had discovered an entertaining
>> >although expensive sales brochure for $2000 worth of his indicators. I
>> >hope I'm wrong because the book seems to have some meat to it.
>> >
>> >Any opinions on this book? How about the indicators themselves?
>> >
>> >Thanks for your attention.
>> >
>> >--
>> >Brad
>> >
>>
>> TD_Sales_Brochure
>>
>> TD_Worthless
>>
>> TD_IMHO
>>
>> Allan
>>
>> "The market is a place set apart where men may deceive each other" -
>> Diogenes Laertius
>
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