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Dr. Ralph W. Swanson wrote:
>
> Eric--
> Your post on Omega stock was interesting. I am trying to decide whether
> to buy TS and Option Station. You mentioned limitations of TS--could you
> expand on them.
> I am aware that TS is 16 bit architecture trying to live in the 32 bit
> world. I understand that they will upgrade to 32 bit next year. Perhaps
> that is why the big advertising campaign going on at present to try and
> sell off the older technology. Maybe that has also influenced the stock
> price.
> I have talked to TS users who consider the software excellent. Can anyone
> give me a Real Traders opinion of TS.
> I am new to active trading and using MetaStock 6.5 as my TA platform. I
> am not sure whether going to the so called Cadillac software (over $2000)
> would be worth it for me. At least until I get more experience in the
> school of hard knocks.
> I am also aware that the software (charting-indicators-setting up a
> successful system etc.) is only part of the game. Running and manageing
> your trading activity as a business is a big part of the success equation.
> Best wishes from Cocoa Beach, FL Ralph
TS may be the best mass market system analysis program out there (Day
Trader disagrees), but very simply, you must take the results it gives
you with a grain of salt. Sometimes a big one depending on your data
and your trading style. Generally, big problems are dirty data and
"bouncing ticks". No matter how good the data vendor says its data is,
you'll find many errors which won't be immediately apparent to the naked
eye. This throws off results. Vendors use very different criteria for
their "open" price, causing discrepancies. I have even run into
problems with vendors using differnet closing prices on some contracts
(mostly LIFFE). Some of these differences are caused by electronic
trading sessions, which will only increase.
As far as bouncing ticks, with tick data, this problem is reduced. But
if you use end of day data to test with and you have trailing stops and
things like that, I believe TS is just a bit better than useless. Too
many assumptions about price movements are made.
If you are using tick data, then the 16 bit problem comes in and you are
very limited in the length of time you can analyze at one time. Many
people just string analysis periods together in this case, but then you
don't always start a new period with the same open trade you ended the
last period with, causing more problems.
Hope this was somewhat clear. I use TS, so I obviously don't say it is
useless, but beware of its limitations.
Good Luck,
ERic
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