|
PureBytes Links
Trading Reference Links
|
So Ira, how do you find cycles? I have looked a many cycle finding methods
like de-trending, Fourier, MEM, pivot rhythm, etc. before finally concluding
that none were totally satisfactory.
I personally believe that there are at least 2 different cyclic forces at
work within data. One is a time cycle and one is a price cycle and as you
stated there are cycles within those including lunar and even to some degree
astrological influences. Toss in some wave theory and random events and you
have a nice soup.
There are methods of providing a variable length for indicators that allows
for speeding up the length when the volatility increases and slowing down
when it is lower. It isn't perfect but it's better then dropping a flat 14
into all indicators.
Brent
-----Original Message-----
From: Ira <ist@xxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Sunday, May 02, 1999 10:27 AM
Subject: Re: Mechanical Trading Update-Response
>I object to any system, whether it be financial or poitical, that expects
you to
>follow blindly down the path layed out by someone else, without any
understanding
>of the system. Some traders have the ability to last because of financial
>strength. The same as the theory that you can't lose if you double your
bet
>everytime you are bound to at least break even. The premise is that you
have an
>infinite amount of capital to play the game. As far as adjustments go I
will
>give you one example. I have used it before. The market goes up and down
and
>there is a pattern in that oscillation. Gann, Fib., Hurst and many others
have
>proven that fact. Observation will prove that to any astute observer. The
falacy
>comes when the statement is made, that the cycle will remain constant.
Hurst
>proved that the cycles vary and that there are cycles within cycles. So
any
>trader can select any cycle that suits his/her temperment and risk/money
>management system. No black box here. Indicators are mostly tied to the
closes of
>price and to the price bars. Let us use Stochastics as the example this
time.
>Almost all charts use 14,3,3s as the numbers for stochastics. Even a black
box or
>two will use those numbers, if stochastics is one of the indicators in the
black
>box system. If you have read the formulas used in stochastics and the way
they
>where intended to be used, you will note that the 14 should be X. For the
first
>number should be the 1/2 cycle of the item you are trading. Now everyone
using
>14,3 3s is getting bad information, unless they are trading a 28 bar cycle
and
>there actually is 28 bars low to low. How many of you out there use
stochastics
>and just found out that you are getting bad information and risking your
money
>using a bad premise. Simply by looking at the cycle you are trading, and
cycles
>do change, you can make that adjustment and have the indicator give you the
right
>information. Knowledge is power, but understanding how to use that power
creates
>success. Hope that this answers your question in part. Ira
>
>MRLYNNG@xxxxxxx wrote:
>
>> In a message dated 5/1/99 9:37:41 PM Pacific Daylight Time, ist@xxxxxx
writes:
>>
>> << I have followed this thread on mechanical trading systems and find
that
>> there is one flaw. As the markets change the system remains the same.
>> Any system that is not flexible, and unable to adapt itself to changing
>> markets, will create large financial losses in the long run. When I say
>> flexible, I do not mean interpretive, I mean one that can adjust to
>> conditions as the occur. I am not talking about a neural net that is
also
>> a blind analysis. Ira >>
>> ******************************************
>> Ira:
>> There are so many conditions in the markets that I am not sure what you
mean
>> by adapting to the changing markets. Can you be more specific or give
>> examples. Thanks.
>> Lynn
>
>
|