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<DIV><FONT size=2>Another good lesson for those using electronic trading systems
... never, ever, ever, ever, depend on anything but printed documentation of
each and every trade which includes the reference/confirmation number of the
trade together with all other particulars even if you have to initiate the print
manually. And save them until you've matched them to the confirmations you
receive in the mail.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Earl</FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>Ketayun <<A
href="mailto:ketayun@xxxxxxxxxxx";>ketayun@xxxxxxxxxxx</A>><BR><B>To:
</B>RealTraders Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxx</A>><BR><B>Date:
</B>Thursday, October 08, 1998 1:26 PM<BR><B>Subject: </B>Broken
trade<BR><BR></DIV></FONT>Thank you to all those that sent me supportive
letters re: dealing with that Datek mess. Unfortunately I do not still have
the record of when I placed the trade because it disappears at the end of
day if not executed.
<P>In the future should this happen at least I know there is some recourse
other than cheesecake:-)).
<P>Sincerely,
<P>Ketayun Rustom </P></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Thu Oct 08 17:44:23 1998
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Date: Thu, 08 Oct 1998 18:32:27 -0400
Reply-To: knight@xxxxxxxxxxxx
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From: Walt Downs <knight@xxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: FUTR GEN: FEAR!! Example
References: <361C9DA9.4A8D@xxxxxxxxxxxx> <199810081111380830.0502C1D5@xxxxxxxx>
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Hi Andy,
As you have stated, it is not possible to calculate how
any one person will react in a given situation. The
response will be a matter of how that person has been
"hardwired" based on upbringing and social circumstances
....etc.
However, this changes once you start addressing a group as
a whole in a crowd environment. The actions of a crowd CAN
be calculated. How can emotion be measured in a market
environment? Simple enough. Volatility, volume and many
other factors can be utilized in the measurement process.
Mind you Andy we aren't just talking here about what the
emotional traders will be doing. we also need to calculate
what the smart traders will be doing. The process then
becomes one of understanding the factors that will affect
the crowd. Given that a crowd will react in accordance with
its strongest single element (For this purpose, this can be
said to be smart traders who use the current market situation
to start the market rolling in a certain direction) once again
we are dealing with something that can be quantified.
It isn't enough to think mathematically, you also have to think
*logically*. My premise for the Fear levels was that highs and
lows hold more emotional impact to a trader than any other portion
of the bar. O.k. lets think about that logically for a second:
1. Would you argue that a high and a low is not an extreme?
2. The last time you held a position, and the market showed a
huge expansion bar in your favor, and that bar closed on its
extreme, how did that make you feel? Do you think you will
remember that feeling? Would you have felt as good if that
bar had given back half of your profits and closed in the
middle of the range?
Addressing human memory, this can *definetely* be measured.
the averages for the passage of short-term thought to long-
term memory running in increments of 3 minutes, 3 hours, 3
days, 3 weeks ....etc.
O.k., we have a theory here, so let's put the two together. Memory
and extreme. Now we will test to see if the market shows statistically
valid increases in factors such as volatilty and volume when price
is within " n " distance of the levels. Next, we can compare the
same factors when price is greater than " n " distance from the
levels. My tests show a statistically valid difference. Ergo it
is my belief that the hypothesis is valid. (MULTIPLE market testing
by the way...).
Of course, we could be talking semantics too. If you feel more
comfortable referring to such as "consolidation of mass" then
so be it.
You mentioned testing? The indicators work because they *can* be
tested. <g> They don't work because *I* say they work. They work
because the *market* proves or disproves the hypothesis each and
every time the indicators and levels are tested.
Incidentally, a theory doesn't have to be correct 100% of the time
in order to be valid. Matter of fact scientists will tell you that
any theory worth its salt runs the risk of being proven invalid
every time it is tested.
Use *logic* to theorize Andy. Use mathematics to *test*. If we were
to follow your parameters then would we not see a market environment
best described by pristine examples of price within standard deviation?
Respectfully, I can't see that anything you have said has refuted
either the logical statements or the mathematical premises upon
which the levels were built and tested.
By the way, the levels *were* blind tested by an independent party.
This party constructed systems of his own design based only on the
levels as inputs. The comment of this individual was "Never have I seen
anything remain so consistently profitable accross such a wide array of
markets with no tweaking".
The levels aren't a holy grail, but they work consistently, and they
contain certain traits that at times can only be explained by the
hypotheses as stated.
Regards,
Walt
Andy Dunn wrote:
>
> I've got to disagree once again Walt.
>
> 1. I think your indicators are excellent
> 2. I think they have nothing to do with human emotions
>
> How do you know what every trader is thinking of at all times?
> Did you interview every trader that day to see if they were scared or greedy feeling?
> There are millions of traders and they are thinking on a million different things...and many "market wizards" say they never let emotion into the equation since they trade mathematically. If a person trades "purely mechanically"...then he cannot even become "scared" or "greedy"
>
> It is impossible to even test such a hypothesis
>
> "believe in science, math, and double-blind studies"
> --me
>
> http://www.skeptic.com/
> http://www.csicop.org/
>
> *********** REPLY SEPARATOR ***********
>
> On 10/8/98, at 9:03 AM, Walt Downs wrote:
>
> >Hi all,
> >
> >Perhaps this chart of the Yen will reinforce what I have been
> >saying about the Fear levels and Fear hybrids like the Fear
> >Index. The point is that people who say that emotions cannot
> >be quantified in the markets are wrong.
> >
> >"Free your mind, and the rest will follow..."
> > ---anonymous
> >
> >Regards,
> >Walt Downs
> >CIS Trading
> >http://cistrader.com
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