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John,
I just read Norman's reply which will address the methodology, but I would
look very closely at the statistical significance of what the vendor is
saying.
I received the same booklet in the mail yesterday and for fun, I counted up
the number of arrows on one of their charts that spanned approximately a
little more than a one year period, which I roughly estimate to be about 300
trading days. There were 30 turns indicated.
If we expand these 30 turns over 300 bars and give each turn a plus or minus
four day window, you have now effectively covered 270 bars. (take the day of
the forecasted turn itself and give four days prior and four days into the
future for the turn to occur and you have provided a nine day window to be
"correct", 30 * 9 =270)
Statistically then, 270 out of 300 bars being covered is 90%, so when a
vendor claims 80%, he is actually doing worse than random chance.
Further, taking the shorter example of 51% with a two day window, this
provides a 5-day envelope.
30 turns times 5 bars = 150 bars out of 300 are covered or 50%, very close
to what the vendor says is the accuracy rate.
This sure gives a very generous interpretation to what "accuracy" really is.
I would give the method much more credence if it selected say 2-3 turns per
year plus or minus 4 days. That would be more acceptable in terms of trading
and the magnitude of the expected move in order to make it tradeable. With a
turn every 10 market days, plus or minus four days, you really have to work
hard in order to MISS a date in my estimation.
>From what I know about Delta, there are also rules where an inversion takes
place, an extra beat can take place, etc. etc. All of this in the name of
spin control to justify how "valid" the product is.
In my estimation, this technique has never been shown as being successful.
There's a reason why a multi thousand dollar method is now being sold for
$175, and I think we all know what it is.
GL
-----Original Message-----
From: Jrhall2946@xxxxxxx <Jrhall2946@xxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
Date: Tuesday, February 29, 2000 12:50 PM
Subject: [RT] Delta Phenomenon
>I received a booklet in the mail the other day from Welles Wilder. He is
selling something called the Delta Phenomenon in a book he has written. It
sounds interesting but...
>
>Does anyone know anything about it? He claims to be able to call market
tops and bottoms within 2-4 days. 2 days=51%, 3days=68% and 4 days=81%. I
would appreciate it if someone could satisfy my curiosity.
>
>Regards;
>John Hall
>
>
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