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Another guy to whom to pay attention. Traders, this already qualifies as a
high quality night on RT!
Regards,
Tom Alexander
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> From: Eric <eric3@xxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: Systems: some thoughts
> Date: Wednesday, December 10, 1997 10:45 AM
>
> TL wrote:
> >
> > >
> > > Having been an avid reader of the many posts here on systems as well
as
> > >
> > > a fulltime trader myself I have some questions and comments.
> > >
> > > Most everything one needs to begin system development, as well as a
very
> > >
> > > good system appears in my favorite book "Market Wizards" .
> > >
> > > 1. Paul Tudor Jones--we have tested all the systems under the sun and
> > >
> > > found only one that works, it is "trend following" and based on a
sudden
> > >
> > > range expansion, in a market that has been trading narrowly.
> > >
> > > Question: how can you test sudden range expansion, on TS, how would
you
> > >
> > > program in "find a market trading narrowly", i.e.what would define a
> > >
> > > market that has been trading narrowly?
>
> There are many ways to program this in TS, as another post suggested,
> Street Smarts speaks of this.
>
> > >
> > > 2. Here is a great system that every good trader will agree works-
When
> > >
> > > the market does not react to the news the way it should go with that
> > >
> > > move strongly. Every "market wizard" followed this "system". How
could
> > >
> > > that ever be checked with a TS type program? Or programmed as a
system?
> > >
> > > 3. How is anyone who ever looks at a bar chart able realize that one
> > >
> > > day's action might have been more news driven than another. Or that
a
> > >
> > > sudden rumor triggered a selloff that ended when the rumor was
denied?
> > >
> > > How do you factor in news? Shouldn't all systems focus on the news
as a
> > >
> > > primary indicator?
>
>
> Maybe, but of course you cannot program news analysis into a system.
> Why is everyone always looking for an easy way to completely systematize
> everything. I guess it is the dream of the holy grail black box that
> makes money while you play golf.
> Your brain is a pretty good analyzer, though. That is how the Market
> Wizards do it. I don't think anyone in that book trades a mechanical
> system. As we spoke here about recently, Paul Tudor Jones spent several
> years and several million to "program" his brain into a neural net
> trading computer called Ranger. The plan was to sell it for $50,000.
> They gave up a few years ago having gotten nowhere.
> > >
> > > 4. Professional traders seem focused on intraday data and divergences
> > >
> > > between indicators, how does one program in indicator divergence?
They
> > >
> > > also use the confirmation of other related markets, how can that be
> > >
> > > system tested?
> > >
> > > The best traders I know synthesize information from a variety of
> > >
> > > sources.
>
> Again the best hardware to use to synthesize all this info is your
> brain, but if you have all this info coming in to TS on a RT basis you
> can program TS to do all the checking you want to find any situation you
> want. Sounds like you need to spend a little quality time with the Easy
> Language manual, or hire a professional TS programmer from Futures mag
> ads.
> > >
> > > 5. Since moving averages are in the long run profitable is it just
they
> > >
> > > are too boring for people to use or comment on? There is not a study
> > >
> > > out there that seems to suggest the longterm use of moving averages
> > >
> > > loses money. To quote Marty Schwatz "using moving averages works
better
> > >
> > > than any other tool I have".
>
> That is true, I use Moving averages. THey aren't sexy though, and they
> aren't perfect, so many people feel there must be something better out
> there. You know the attitude, if it is simple it must not work
> anymore. I have to find something that no one has EVER thought of
> before to defeat the market. All those market wizards say KISS, the
> more rules the worse the system. They haven't been proven wrong yet.
> I think this last question just made the previous questions moot. You
> now have the basis for a good trading system that is completly
> mechanical and preprogrammed into TS and simple.
>
> Good Luck,
> Eric
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