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Willi:
>The next step is then to create an indicator that will only take
>years with the same ending like 2007, 1997, 1987 and so on. Gann
>used this for his forecasts and I want to look what the results
>are.
I understand Gann didn't actually profit in the end. And anyway,
what is the point of choosing an arbitrary 10-year interval? At
least pick something like the 11-year sunspot cycle, which probably
has a higher chance of having some effect on markets than an
interval chosen because it's a nice round number.
>But I'm wondering that nobody is working with such indicators. Are
>they useless for your work or are there better alternatives?
I don't find them useful for short-term trades because they aren't
backed by a statistically significant sampling of data for each
point in the seasonal plot.
The only thing I've ever found them useful for is to filter signals.
A trend follower system filtered so that you only go long when the
seasonal says "up" and go short when the seasonal says "down", tends
to do better than if the trend follower ignores seasonals. You have
to smooth the seasonal tendencies heavily, though.
-Alex
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