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Hello Research,
talking to myself i guess, anyway don't be fooled by the simplicity of
this study. yes it uses a simple moving average, the key is the
percentages of the bands above and below and the length of the
lookback period. if there is some hidden mystical cyclical movement
in the sp market it is most likely cause by option to option
expiration.
there is a train theory here - once an object is in motion you know
the rest and if you don't you have no business trading. also note
that the closer to option expiration the more volatile the the sp's
become. note that because if you have any basis of trading that price
direction driven, it will be more sensitive towards the expirey.
another point i wanted to make is that by following this study you can
gain a statical confidence in how long to expect the market to go up
and what to expect the point move to be. i do not claim to be a guru
predictor, yet i have never seen ANYTHING that can give you a feel for
where the market is going and how far it will go as well as how long
it will last as this study. at least i have never seen anything like
this or better that was disclosed to the public for free.
this practice/theory was discovered by doing massive amounts of number
crunching, the original length and percentages were rounded up to
where they are now. 21 days and 2.5% - i have run this study for
many years and has always given me a fell for what is possible. once
strength has raised it's head as we just experienced. it doesn't
usually go away just that fast, and if it does it's certainly the
minority as no study that is dynamic in application is 100%. however
no one needs 100% in this business. i just wanted to express that i
did not decide upon what these parameters were to be.
--
Best regards,
Research mailto:research@xxxxxxxxxxxxx
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