# Stock Market Trading Simulation



## ak98 (29 October 2006)

I want to use software to simulate trading. Anyone aware of software that allows stock market simulation. It Must be easy to setup, cheap, display results of trading, allow different trading styles based on indicators. There are many trading styles I wish to examine and I dont want a black box system.
Preferably it would allow conditional trading so that I could practice performing conditional trades.
Basically I wish to simulate the whole process of trading.
Online simulations dont interest me because they are too slow and no better than paper trading.


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## captain black (29 October 2006)

Personally I use Amibroker for system design and testing. Others would recommend Metastock and Tradesim or Tradestation.
There's some good stuff in some of the threads in this forum, worth spending some time having a good look around here.

The latest Amibroker Beta (4.88) has a bar replay tool which would be useful for testing discretionary systems.


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## ak98 (30 October 2006)

I have just spent a couple of hours pouring over threads and trying various so called charting applications having previously tried MetaStock(dont want to pay $600+ plus data).  I generally just use the charting in online broker but am aiming to be more active trader, therfore need a charting app that allows faster browsing of charts.

Those i tried included
Amibroker (http://www.amibroker.com/   ), Quote Tracker http://www.quotetracker.com (useless ), MDS Market Analyser (mdsnews.com), Net Equities Equity Quotes(crappy), Master Investor 2000(Utterly useless),InvestorRT,Incredible Charts Pro(Good ) Rogue Trader SMS(www.rtrader.com.au Good   ) and Space Jock FC Charts (OK www.spacejock.com).

I dont want to sound to disappointed but the experience was frustrating just getting some of these to work. And although I valiantly tried to make sense of the black box style of automated analysis in Amibroker it just did not gel, although the price was reasonable.  Most did not provide any benefit over Etrade/Comsec Charting and info and many just rehash yahoo.

One thing I noted was that for simple charting application the three cheaper apps are the better. All these were Australian.

Rogue Trader SMS allows visual back trades which suites my needs ($49.95 for 6 mo with data) but only includes a few indicators. Incredible charts is good and has access to OS charts ($18 / mo with free version available) with lots of indicators but no simulation. SpceJock is good with free version avilable and lots of indicators but no simulation.

Focusing on what I need (portfolio management and back trading/simulation, rapid chart browsing, cheap, no hassle setup) Rogue Trader SMS comes closest.

Anyone have any other ideas


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## tech/a (30 October 2006)

Spend the time to become proficient at Amibroker.

If you think you'll be able to analyse and design profitable systems in under a year then think again.

Its worth the effort and you'll learn more than you expect to.
In the world of Systems testing and design the learning curve is vertical.


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## captain black (30 October 2006)

ak98 said:
			
		

> And although I valiantly tried to make sense of the black box style of automated analysis in Amibroker it just did not gel




Not sure what you mean by this? Amibroker would be one of the more "open" style of platforms available, nothing "black box" about it at all.

As usual tech/a has posted some very wise words in the post above. 

There are some 3rd party apps. that make Amibroker relatively simple to set up. Ask back here if you take that path, more than happy to help.

oh, and start off with good quality data from a quality data supplier, without it any charting app. is worthless.


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## ak98 (30 October 2006)

Thanks for your replies. 
Regarding data - Commsec and Etrade supply these for free along with simple and advanced charting.  Why pay for data at $40+ per month. All my trades are through the online brokers. They also supply depth, intraday quotes, news releases etc etc.  All this stuff is free.

I dont want a scanning application as I generally select stocks based on weekly charts and I am only interested in maybe 20 stocks at a time, which represent best of sector.

I have access to FatProphets, FNArena, AusStock and a couple of online investor newletters which suite me fine (brother works for one of them). 

The real interest I have in these is not so much in stock selection as knowledge from which point I can make my own judgements by inclusion of TA. I also enjoy the reading and find market psychology fascinating.

There is little reason for an extra charting application or data feed hence my request for information about stock market simulation.  I do wish to become a more active trader and have found that for learning, paper trading is fine, up to a point.

Mastering ones own psychology is the sticking point when making a transition to active trading. I havent always made the greatest decisions, (a lot of 'what ifs') when selling and my useage of stop loss needs to be refined.  Most often I need to take my finger OFF the trigger and follow the PLAN.

Yes, I could probably spend a year learning a charting package, performing Montecarlo Analysis of trading methodologies, getting lost in the mathematics of Random Probability Distribution, chaos theory etc. Essentially this would mean altering the math to fit the historical pattern, but as we all know the past does not predict the future.

But my goal is to be able to effectively manage a portfolio of a dozen stocks. I could only ever EOD trade as work ties me up during the day.  My goals are to beat 15% ROI across a portfolio over twelve months with 2-5% risk per trade with max parcels 10%, 1 -3 trades per week and no spend more than a couple of hours per week(mainly reading).

You guys obviously have a different set of expectations and time investment potential judging by the number of posts you've made.

I will look again at Amibroker, but what I need is something that wont interfere with my goals. 

Rogue Trader SMS is quick and simple stock market simulation (incl stop losses, buy gains, resistance sells). Works for me so far. 

I'm still open for suggestions.


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## tech/a (30 October 2006)

ak98 said:
			
		

> Thanks for your replies.
> Regarding data - Commsec and Etrade supply these for free along with simple and advanced charting.  Why pay for data at $40+ per month. All my trades are through the online brokers. They also supply depth, intraday quotes, news releases etc etc.  All this stuff is free.




You pay for the cleanest data money can buy.
You need splits and mergers,if your going to become involved in systems test data IS the Forest from where you'll find the trees.



> I dont want a scanning application as I generally select stocks based on weekly charts and I am only interested in maybe 20 stocks at a time, which represent best of sector.




So your no longer interested in Systems testing? Top down analysis nothing new here.



> I have access to FatProphets, FNArena, AusStock and a couple of online investor newletters which suite me fine (brother works for one of them).
> 
> The real interest I have in these is not so much in stock selection as knowledge from which point I can make my own judgements by inclusion of TA. I also enjoy the reading and find market psychology fascinating.




The key to profit is NOT the analysis.



> There is little reason for an extra charting application or data feed hence my request for information about stock market simulation.  I do wish to become a more active trader and have found that for learning, paper trading is fine, up to a point.
> 
> Mastering ones own psychology is the sticking point when making a transition to active trading. I havent always made the greatest decisions, (a lot of 'what ifs') when selling and my useage of stop loss needs to be refined.  Most often I need to take my finger OFF the trigger and follow the PLAN.




Plans are not worth the paper they are written on UNLESS you know they are profitable.
A page or so full of well meaning theory doest guarentee profit.



> Yes, I could probably spend a year learning a charting package, performing Montecarlo Analysis of trading methodologies, getting lost in the mathematics of Random Probability Distribution, chaos theory etc. Essentially this would mean altering the math to fit the historical pattern, but as we all know the past does not predict the future.




Hmm would have to disagree.What you are left with is a "blueprint" (If you are proficient enogh) of a methodology with a KNOWN expectancy---stay within the blue print and profit is assured.



> But my goal is to be able to effectively manage a portfolio of a dozen stocks. I could only ever EOD trade as work ties me up during the day.  My goals are to beat 15% ROI across a portfolio over twelve months with 2-5% risk per trade with max parcels 10%, 1 -3 trades per week and no spend more than a couple of hours per week(mainly reading).




I trade 3 systems each take around 1 hr a week to maintain and trade.Each return 30-45% P/A un leveraged,and its as boring as hell. 



> You guys obviously have a different set of expectations and time investment potential judging by the number of posts you've made.




We do??? Ever thought that we maybe in our positions by choice and design.



> I will look again at Amibroker, but what I need is something that wont interfere with my goals.




How will it do that other than tell you that some of your hypothesis are un profitable. 



> Rogue Trader SMS is quick and simple stock market simulation (incl stop losses, buy gains, resistance sells). Works for me so far.




So continue with it and stop wasting our time.



> I'm still open for suggestions.




Provided they fit into your preconcieved------"How trading should be".

Seems to me a hidden agenda---why are we wasting our time as your brother is just a phone call away.

Cant be done systems traders are full of it.

Well 4 yrs of live trading says it can.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=74;t=000029;p=3


Yeh its worth the effort---fortunately 95% of traders dont put the required effort in! They look for quick fix solutions like yourself, its only when the pain hurts so much they revisit hard truths like Ive written here.

Enjoy.


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## ak98 (30 October 2006)

Thanks heaps for your reply tech/a

Guess Ive still got heaps to go on getting the most out of TA.

I'm impressed with your returns.

I'm more impressed that you only spend 1 hour a week to obtain them.

Ive been sifting through your posts and am 'collating' the pearls of wisdom - thanks.

My brother is in the office but not a broker(worse luck) and has no interest in trading! Yet.  Hes coming round.

Key to profit? ??? Warren buffet or some TA Guru.  Just depends on who you ask.  I personally favour the answer lies somewhere inbetween skewed somewhat toward TA. Must admit my profits have not come from fundamentalists , infact most of my losses come from FP's(you know who).

By 'plan' I meant my trading methodology adapted to my risk profile. And yes Plans are important. I would not invest money without a plan. The question is how to improve the plan and ensure it works.  Here is where systems analysis, design and testing would be of benefit to 'Prove the Plan' and 'optimise the Plan'. 

I noticed in your posts you mention running MonteCarlos , in the magnitude of 20000 over portfolios.  That would be definitely worth knowing how to do.

What software did you use? If you can give me a few hints I would be greatly apprecative.

And no I'm not lazy or unmotivated, just cautious of wasting time and effort.  There are a lot of TA traders who are not as successful/motivated as you, granted.

Risks and reward/benefit apply to time as well as money.
Rewards are not necessarily proprtional to persistence and effort.
I would like to head down the right track.

The concept of portfolio risk analysis and Monte Carlo sims (on clean data if necessy) are appealing. Application of portfolio management technique, not necessarily TA per se is what I'm interested in.
Thanks again.


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## CanOz (31 October 2006)

T/A...if i can actually manage to get Amibroker software sent over to me here...how does it connect to the ASX? I'm to the point where Pwer Etrade just doesn't do it for me anymore and i'm very interested in the Amibroker software but reluctant to purchase in case they cannot provide enough support for me to operate from China. Maybe i should take it up with them....but then they want to sell it to me right....?

Your thoughts?

Cheers,


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## ak98 (31 October 2006)

Addendum
The dichotomy between 'portfolio management technique' and TA in simple terms means managing the risks associated with TA based trading.

TA supplies the signals to buy. The reliability of these signals generally a matter of large debate. 50% ? 60%? Does it really matter.  

What is generally agreed in these forums is that what happens after a stock is traded is vitally important. 

I quote some of the other posts around here now.


Aiming to increase the win % usually results in the system making less money at the end of the day, since the great majority of entry "wisdom" is in fact provably unprofitable.

Most trades result in either small losses or small wins, thus cancelling each other out and every so often they would enter a trade that did really well and it is these few trades that generate the vast majority of profits.

Win percentage is not the win/loss ratio.You can win 80% of the time and still be a marginal winner or loser.The win/loss ratio is measured by dividing your average winning amount by your average losing amount.This together with your win percentage gives you your expectancy.

OK. Where to from here.
The need to create a system providing expectancy.  Sure TA can be used to provide sell signals but again reliability is an issue. 
Any system whether TA or fundamental must assess the underlying worth of the asset. For fundamental this is easy to understand - based on PE,EPS,NTA etc.  
For TA which is based purely on price action, the worth of a stock held in your portfolio and having an unrealised gain or loss is harder to define. The issue pares back to a numbers game and assessment of risk.  Probability of the unrealised gain dwindling, or the loss reversing.  TA is a refinement on guesswork of assessing these probabilities and moreover provides a framework with which to work.  Once you have an assessment of these probabilities, and they are only probabilities you have the opportunity to act.

Given that we are only dealing with probabilities it would help to have a system that could assess price histories and assign probabilities to trading signals. Most Signals Ive read about and that forum users have devised involve some formula plugged in to the historical data for one stock in an attempt to generate the signal for that one stock.

On a mathematical basis, looking at stochastics and various random probability distributions it would take decades of data and a truly stochastic stock to provide the necesary historical input for producing the ideal formula for that one stock. (I have some knowledge of advanced math and probability theory - enough to grasp this concept anyway).

The correct application of mathematics in this instance would be to compare two related objects subject to the same or similar forces. Does such exist? Maybe! Here is where I have applied my time reading.  Commodity stocks are related to the underlying commodities. Oil to the fear factor of the middle East. etc etc
I am working on this angle.  Now what if we could assign probabilities to the price if commodity stocks changing inline with the underlying commodities based on there respective historical price actions. Interesting theory anyway but I digress.

OK, so we have reached a point where we are no longer looking at prices or signals but probabilities, and these to a large extent will be based on your experience , time frame, method of assessment, use of indicators etc.

Based on the rough probability of certain outcomes portfolio management strives to acheive the most profitable outcome via asset allocation or reallocation.  Of key importance would be setting limits and stop losses appropriate to risk.

This basically boils back to knowing the drawdown and setting stop losses.


Monte Carlo analysis may be of benefit to my further education in this.


Talk about wasting time! Whew.  Think I spouted all that just to clear my mind before I have another go at Amibroker.


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## tech/a (31 October 2006)

ak98

Entry is simply a beginning point.
Sure enrty which has a more "likely" cahnce of continuing in the direction in which you wish to trade--generally long--is of course the initial objective.

Placing the odds in your favor is a point of continual debate but my experience has been that buying high and selling higher has a slight edge over buying low and selling high---as we cannot determine "generally" when low is infact "The" low--or turn around.

There are 2 important factors.
Time and Exit.
Exit IS where you'll determine profit.The longer you take to exit a position which is moving in the direction of your trading the greater the profit.
This ofcourse takes time.

In my Discretionary trading I have found that buying into momentum gives me the greatest opportunity to have at least a short term continuation.The secret here is to be able to evaluate the likely length of at least the short trem momentum.
This does 2 things.
(1) Gives you the confidence and ability to place larger position sizes with much closer stops (as they are rarely hit) I use 2-3 ticks---if it gets hit then my evaluation of momentum is in correct.
(2) The closer stops will allow an R/R ratio of 4:1 or more to be easily achievable,where as wider stops make even a 1:1 R/R difficult to achieve.

There are times when it seems hit and miss with many small losses.However there are also times where 5:1 and better R/R run in winning streaks more often than I thought possible.

Having a sound knowledge of Crowd mentality DISPLAYED as price action (BAR ANALYSIS) is one of the best tools a discretionary trader can have in my veiw.

Understanding the 2 vastly different skills in formulating a Discretionary trading methodology WITHOUT a known positive expectancy and your own psychological pitfalls!!,and systems trading a methodology that has a known Positive expectancy and as such a "blueprint" to trade by,is the challenge for the trader.

Understanding of the latter before attempting the former is in my veiw the most important step in developement of trading skill.

Enjoy the journey and may your education be "cheap"!

I use Metastock and Tradesim combination but mention Amibroker due to its more favorable initial cost.


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## ak98 (31 October 2006)

My position

Monte Carlos, Markowitz theory and portfolio managment.


Not interested in simplistic TA.

Now I have played with the Back testing in Amibroker(admittedly only the trial -  so 5 stocks in portfolio limit) and I am convinced that more time spent in design of back testing automated systems based on MACD/DEMA/MA COvers/WHATEVERS is NOT GOING TO BE PROFITABLE for ME.  I have no faith in them mathematically/statistically. My interests lie elsewhere. I believe that anyone who actually has some automated system working is probably just using such custom indicators to provide a guide to probabilities and using their skill in portfolio managment to oversee the system. Correct me if I'm wrong Tech/a, but you would never trust your trading to an automated system linked to your broker.

I Guess you could say I bypassed this stuff long ago and went with what I know.  I study the charts. I paper traded the stocks. I researched then I paper traded them again.  I'm trading only after I have familiarised myself with historical charts. This takes too much time hence my need for stock market simulation. Just need to refine my system. I am happy with it.

 I,m glad automated trading works for you tech/a but it will not work for me.

Yes, I have preconceived notions of trading. Invested since 1998. I have built up my portfolio during the good times and have held out through May with only 2% loss which I have subsequently retraced to 10% profit.  Well on target to reach my 15% goal barring further corrections. I also survived the Tech Crash, just.

 Proper education is never cheap.  True most of my education occurred with the tech crash and that hurt heaps. Now my education comes from looking at charts.  They tell me all I need know sometimes. Indicators just cloud the information in the chart and obstruct learning for me but I'm always looking for ways to correlate across stocks and underlying commodities using charts/overlays/indicators or whatever.

Getting close to retirement at 45. 

I now value time more than money. 

**** I just wasted another 20 minutes (while at work!)
Last post forever - I promise myself
Cheers


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## captain black (31 October 2006)

CanOz said:
			
		

> ...if i can actually manage to get Amibroker software sent over to me here...how does it connect to the ASX? I'm to the point where Pwer Etrade just doesn't do it for me anymore and i'm very interested in the Amibroker software but reluctant to purchase in case they cannot provide enough support for me to operate from China. Maybe i should take it up with them....but then they want to sell it to me right....?
> 
> Your thoughts?
> 
> Cheers,




You can download trial version of Amibroker from Amibroker.com.
Check the 3rd party utilities area for an excellent setup guide for ASX stocks.
Trading from China should be as easy as trading from Oz.
Amibroker support via the official channels is great, there's also a very active mailing list as well as several helpful AB users here and on other forums.

As I mentioned earlier in reply to ak98, get the best quality data from the best quality data supplier, without it Amibroker or any other charting/system design software is worthless. It can read virtually any type of data, I use a Metastock plugin, but asciiCSV or other formats are fine.

I use ETrade as well and Amibroker can supply you with streaming data via Quotetracker and your ETrade account. It's not true "tick" data but it serves my purposes.


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## tech/a (31 October 2006)

ak98 said:
			
		

> My position
> 
> Monte Carlos, Markowitz theory and portfolio managment.
> 
> ...




Is it that you feel complexity holds the key to profit? Or is it your mathamatical bent.(My son is a physicist so I know a little about the approach mathematicians CAN have).



> Now I have played with the Back testing in Amibroker(admittedly only the trial -  so 5 stocks in portfolio limit) and I am convinced that more time spent in design of back testing automated systems based on MACD/DEMA/MA COvers/WHATEVERS is NOT GOING TO BE PROFITABLE for ME.




Nor anyone else I would suggest.



> I have no faith in them mathematically/statistically. My interests lie elsewhere. I believe that anyone who actually has some automated system working is probably just using such custom indicators to provide a guide to probabilities and using their skill in portfolio managment to oversee the system. *Correct me if I'm wrong Tech/a, but you would never trust your trading to an automated system linked to your broker*.




I would suggest that most successful systems developers are way past the use og "Off the shelf" indicators and oscillators. They would understand that their use is limited and would not form the basis of a sound method.There is far more to T/A than Indicators and oscillators.
A complete and thourough understanding of price action is needed.

*Yes I would * 




> I,m glad automated trading works for you tech/a but it will not work for me.




So why test and find that you have a system that works with given parameters only to trade in a discretionary manner.
once you trade outside the parameters you set for testing you then change to possible result.
Your testing will be only of use relative to the parameters tested.
You want one but not prepared to trust it???



> Yes, I have preconceived notions of trading. Invested since 1998. I have built up my portfolio during the good times and have held out through May with only 2% loss which I have subsequently retraced to 10% profit.  Well on target to reach my 15% goal barring further corrections. I also survived the Tech Crash, just.




Im not understanding then---on one hand you are happy with preconcieved ideas and on the other you ask for some help but discard that help as un suitable as it doesnt fit with your pre conceptions.



> Proper education is never cheap.  True most of my education occurred with the tech crash and that hurt heaps.




What did you learn?



> Now my education comes from looking at charts.  They tell me all I need know sometimes. Indicators just cloud the information in the chart and obstruct learning for me but I'm always looking for ways to correlate across stocks and underlying commodities using charts/overlays/indicators or whatever.




You are looking for the holy grail---learn what makes the profit---its not the analysis.



> Getting close to retirement at 45.
> 
> I now value time more than money.




At 52 I value the use of time and could have retired years ago---but I couldnt think of anything more boring!!


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## CanOz (31 October 2006)

captain black said:
			
		

> You can download trial version of Amibroker from Amibroker.com.
> Check the 3rd party utilities area for an excellent setup guide for ASX stocks.
> Trading from China should be as easy as trading from Oz.
> Amibroker support via the official channels is great, there's also a very active mailing list as well as several helpful AB users here and on other forums.
> ...




Thanks Cap!


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## ak98 (31 October 2006)

This article was posted on the forum Trading strategies/Systems.

You are a successful TA trader no doubt T/A and I can appreciate that fact. You post like an evangelist for T/A. Your online name is Tech/a.
You live TA.

There are other strategies and lines of thinking. I have the level of interest in market psychology and maths that allows me to explore these.  I have wasted a lot of time on unfruitful explorations in the past.  I now trade based on what I know. 

What I know, cant be put in to a formula. What I learnt cant be formularised.

It should be easier for you to formularise your knowledge.

Show me one formula that works.  No rhetoric. Just one formula that you  use across your automated system. Any formula. Discretionary based Mx aside.  Just one formula that u use. U trust automated trading.  What formula would u trust.

$1000 to you if you can run 20000 monte carlos on your formula across the market and show significantly better than random probablity. If interested I will respond to your email.  PS I am still interested in montecarlo simulations and believe if you could teach me this I would be happy to pay you $1000.

I have not argued against TA.
I have not argued for FA.

The gauntlet is thrown.


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## nizar (31 October 2006)

tech/a

great advice in this thread as always from you.

just a question: if u entered a trade and almost immediately got stopped out, would you have re-entered it at a later time that day? or never? if never - why?

i noticed MOX was running yesterday, but in the morning it went from 1.40 to 1.36 and then back to 1.40 and then slightly back down but in the arvo it broke through 1.50 then went to 1.80+, im thinking if i had entered that then i wouldve for sure got stopped out.



			
				tech/a said:
			
		

> In my Discretionary trading I have found that buying into momentum gives me the greatest opportunity to have at least a short term continuation.The secret here is to be able to evaluate the likely length of at least the short trem momentum.
> This does 2 things.
> (1) Gives you the confidence and ability to place larger position sizes with much closer stops (as they are rarely hit) I use 2-3 ticks---if it gets hit then my evaluation of momentum is in correct.
> (2) The closer stops will allow an R/R ratio of 4:1 or more to be easily achievable,where as wider stops make even a 1:1 R/R difficult to achieve.
> ...




The above is exactly the sort of system im trying to develop. So in Amibroker, can u like stimulate trading without actually trading.

Coz i want to simulate trading without actually losing money and i think a simulation would put in the right mindset.

THe below is about GDN the other day: i was just examining the way it moved



> It opened at 81.5c, from the previous day close of 74.5c. So it gapped up about 10%, volume 1.5million at the open, probably about normal since it broke out about a week or so ago. I wouldnt have bought this, i would first have waited to see the trend (2). But then the price starts falling. And by 10:19am its fallen to 75.5c.
> 
> But then look what happens, it rebounds, spectacularly. By the time its 10:20am, yes ONE MINUTE later, the price is 82c and in this time (1min) theres been 1.5million volume and about 100trades. Clearly the trend is now up, on the tick chart this would be obvious. This would be my entry. Price is 10% up and the trend and volume is behind in (continuation of the breakout).
> 
> ...




So i want to simulate, to see, can i do it? Can i pull the trigger in time?? Is there enough time for me to click on that place order and put the stop in an instant? Can i be that decisive? Or will i procrastinate and miss out?? Theres only 200,000k left at on the sell in this INSTANT, can i take it out in time? or will i have to pay 20c instead of 18.5c ??

Id appreciate you and any1s thoughts...

Obviously it will take time, months, years, but if i can stimulate whats happening out there, i reckon its much better than just jumping straight it.


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## tech/a (31 October 2006)

ak98 said:
			
		

> This article was posted on the forum Trading strategies/Systems.
> 
> You are a successful TA trader no doubt T/A and I can appreciate that fact. You post like an evangelist for T/A. Your online name is Tech/a.
> You live TA.




Well not really so.
I know enough to know that most application of technical analysis is applied  incorrectly.I also know that or practical use it is of little value in isolation.



> There are other strategies and lines of thinking. I have the level of interest in market psychology and maths that allows me to explore these.  I have wasted a lot of time on unfruitful explorations in the past.  I now trade based on what I know.
> 
> What I know, cant be put in to a formula. What I learnt cant be formularised.




Then systems analysis and montecarlo analysis is of no use as you cannot formulate your experience into a set of trading rules that can be coded for testing.



> It should be easier for you to formularise your knowledge.




It is as I have chosen as have others parameters that can be coded and tested.
There are many!
I also trade in a discretionary manner as you do.
however the larger investment is on that which I can test and trade via the resultant "blue print"



> Show me one formula that works.  No rhetoric. Just one formula that you  use across your automated system. Any formula. Discretionary based Mx aside.  Just one formula that u use. U trust automated trading.  What formula would u trust.




The complete trading formula for the System which you have seen the results is fully disclosed on Reefcap.All there in black and white with pages of discussion over 4 yrs. Read and take from it what you wish ---it is presented as a start point from which others like you can build from.

I know of 16 traders who use it or a hybrid of the original method---all have returns similar to the one traded live.



> $1000 to you if you can run 20000 monte carlos on your formula across the market and show significantly better than random probablity. If interested I will respond to your email.  PS I am still interested in montecarlo simulations and believe if you could teach me this I would be happy to pay you $1000.




A very easy $1000 and happy if you would send the cheque to Joe in support of his site. I will post the analysis when I re load tradesim which I crashed a week ago!!.
Your challenge in performing better than random by that do you mean profit better than the index or better than a 50% win rate.
If win rate then no it doesnt do better but if you talk profit then it is significantly better. There is more to trading than win rate.
Infact you can have an 80% win rate and still go broke---another $1000 and I'll gladly explain that as well.



> I have not argued against TA.
> I have not argued for FA.




Nor have I. but the answer to profutable trading is in *NIETHER*



> The gauntlet is thrown.




Love it keep throwing it at $1000 a pop!

*All to Joe though not me!!*


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## ak98 (31 October 2006)

OK Tech/a.

I meant a solution that predicts the market price action significantly better than 50% and can do it reliably as backed up by some sort of analysis.

I am interested in the porfolio management. This would be your discretionary component I think.

FINALLY I think we agree although the terminology used is different.

I'll sign the cheque if *anyone* can prove their systematic approach to the market can do 66% or better. That is predict future price action in the medium term , say 3-6 months, reliably 66% or better. It is the mathematics of market prediction that I have no faith in. Would be happy to be shown wrong. So would the rest of the world. 
I would double the cheque for %80. In fact I would get them to sign a nondisclosure agreement, retire from work and full time party. 
Somehow people beleive that TA Gurus know the 'Formulas' and guess I was naive in even asking for one. 

As for the discretionary component of portfolio managment - this is where I wish to expand my knowledge.

As I stated at the start of the thread I wish to practice portfolio managemant. Includes simulation of trading similar to paper trading.  No more No Less. Perform trades and set positions, stop losses, etc Any automation/testing would only be to optimise for number of trades and setting of stops.


Cheque book out and waiting


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## tech/a (31 October 2006)

ak98 said:
			
		

> OK Tech/a.
> 
> I meant a solution that predicts the market price action significantly better than 50% and can do it reliably as backed up by some sort of analysis.
> 
> ...




Well maybe the Gann analysts may stake a claim but I'll match your grand.
There are Trading techniques that can give you un canny prediction of "Possible" price action I used and demonstrated one over the last 2 days on the DYL thread all time stamped so you can see when. I wouldnt call myself a proficient Elliot analyst either!! But its accuracy has certainly made plenty for me on various trades.

*I still think we are streets apart!!*




> Somehow people beleive that TA Gurus know the 'Formulas' and guess I was naive in even asking for one.




A common misconception from those who arent practitioners-----is that T/A is predictive.Simply its not.It does have some predictive styles of analysis in the toolbox but its prime use is NOT predictive more Opportunistic for entry and indicative for exit.
The application of T/A is and can be very varied or in the case of developed systems very specific and rigid. 



> As for the discretionary component of portfolio managment - this is where I wish to expand my knowledge.




There is no discretion in my portfolio management.
Systematic,and Discretionary trading are 2 vastly different trading methodologies clearly seperate from the portfolio itself other than position sizing.

Portfolio management is "Normally" handled in a fixed way with Systems trading and can be maximised in both Systems and discretionary trading by re investing profit and dividends and through sensible leverage.



> As I stated at the start of the thread I wish to practice portfolio managemant. Includes simulation of trading similar to paper trading.  No more No Less. Perform trades and set positions, stop losses, etc Any automation/testing would only be to optimise for number of trades and setting of stops.




I dont know what you mean here a portfolio is made up of a group of trades the management of that portfolio has little to do with the individual trades which make it up.It is quite seperate other than position sizing.
To help me understand better what do you suspect you can achieve to have "Better " Portfolio management. I Think your confusing the two.




> Cheque book out and waiting




Mine to but Ive offered $5k a time to many and never had a bite.


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## SuperGreenT (11 July 2010)

*Simulation Tools/Sites*

Good afternoon all,

First off, let me say that I am completely new to the world of trading.

My situation is that I am in my mid 30's, have been employed by a government organisation for 15 years and have been able to build a property portfolio that consists of 2 investment properties and my PPR, all with no debt.  My background is engineering and computer science, so I have good understanding of mathematical concepts (stats, calculus and algebra).  

Now, I don't want to dive into trading straight away with my own money and I am happy to spend 12 months researching and 'playing' before I get serious.  I was wondering if anyone had any thoughts on what would be a good software package/web site to simulate trading on for 12 months??

I have seen that the ASX has a game, and there is another site Stockwatch.  Has anyone had any experience with these sites or others??

Thanks in advance,

SuperGreenTriangle


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## pixel (11 July 2010)

*Re: Simulation Tools/Sites*



SuperGreenT said:


> Good afternoon all,
> 
> First off, let me say that I am completely new to the world of trading.
> 
> ...




Lucky you,
Another 30 years in front of you; you certainly can afford to take it easy and study the theories for a year or so.

I have a similar background to yours: Maths and Computing - except that I'm a generation ahead of you, both age-wise and as a Technical Analyst.

As to websites/ software packages, I know these three from personal experience:

IncredibleCharts, which is a freebie with lots of educational material thrown in;

MDS Financial, whose Market Analyser I have been using for 12 years; it has a unique backtesting facility, so you can determine in advance, whether a trading method you wish to employ has an "edge", and if not for all stocks, which ones are best traded by it.

Pulse is an emerging application. Paritech has been around for a number of years and excels in real-time data delivery; while its market scanning and backtesting facilities are still catching up to those if the MA Pro.

Have a look at them all - even the latter two offer new subscribers a free trial. Then take your time and study. It doesn't have to be expensive in terms of $$, but without discipline and a fair amount of skull-sweat you won't get far.


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## johenmo (13 July 2010)

ASX game is ok but I find they don't have the stocks i want.  Used Incredible charts too.

Amibroker is worth the time to get to understand  Can do all sorts of things with it.  The backtest is helpful.

If you want a "game" try http://chartgame.com/.


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