Dump it Here

[DaveTrade]

"If you do not find a style of trading and a trading market that match your talents and interests, you will not spend enough time in the state of flow to supercharge your learning efforts. Nor will you cultivate the second-order competence that will allow you to weather inevitable trading storms. Finding a niche means so much more than simply making money or having fun. It is the discovery of that worthy challenge that energizes you, tapping into your deepest sense of meaning.”

Thank you Skate, exactly the point I've been trying to make in another thread.

 

[MovingAverage]

It's a punt. It's a gamble. What it isn't is real.
Crypto's is basically like stock in an empty company that doesn't do anything except promote the sale of its own stock. Crypto's such as Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than themself. The mysterious world of cryptocurrencies is exciting at the moment for some - but for those without experience, trading these coins will eventually end in tears. If you are aware of the heightened risk of trading crypto & still decide to trade, well that's called an informed decision & not one I would agree with.

Don't mean to bring this thread back to crypto, but this headline's reference certainly gave me a good laugh.

 

[Skate]

How can we determine a trend?
It's been volatile trading these last few weeks & the effectiveness of a trend can be patchy. Using an "Index Buy Filter" has the ability to keep you out of the markets when unfavorable trading conditions exist. I should also remark that professional traders trade constantly. I also have a mix of Trading Systems that incorporate an "Index Buy Filter" where others don't.

I've tried a lot of different MAs over the years but admittedly in the context of an index filter. Overall I keep coming back to the old fashioned simple MA as it seems to be the most robust across a range of different markets.

An "Index Buy Filter"
Using a "Buy Filter" has limitations as the standard run-of-the-mill buy filters use a "moving average" to indicate when the index is off or on. Just by the very nature of using a moving average or its "variations" have a habit of getting you "out" a bit late & reentering the markets can also be "delayed". The lag associated with this type of indicator "is a killer in this game".

Skate.

 

[Skate]

Kaufman’s Efficiency Ratio (ER)
The Efficiency Ratio also has its limitations but the "ER" spots trends in prices & can be used in conjunction with other technical indicators to improve the performance of those indicators. Efficiency Ratio is used to define the strength of a price trend to see how effective the trend is.

All trends are not equal
It's super vital to define a trend as they can be "strong or weak". Entering only in a "strong trend" is vital when seeking improvements to a strategy's performance.

Disclaimer - Using Efficiency Ratio
1. The Efficiency Ratio (RE) has nothing to do with volatility, this is "important to understand".
2. The Efficiency Ratio (RE) may help recognise periods of strong trends & eliminate side-way range trading.

Volatility
In technical analysis, the Efficiency Ratio (ER) is just a tool to measure the efficiency of a trend. The Efficiency Ratio (RE) is not a volatility indicator but it can be used in conjunction with a "volatility indicator" as it adjusts to volatility changes.

Skate.

 

[Skate]

Don't mean to bring this thread back to crypto, but this headline's reference certainly gave me a good laugh.

View attachment 137944

Munger has made his feelings on crypto known in the past
“I hate the bitcoin success,” he said last year. “I think the whole damn development is disgusting & contrary to the interests of civilization.” Despite his apparent loathing, Munger said he was not completely opposed to the US Federal Reserve launching its own digital currency.

Charlie Munger on crypto: ’the whole development is disgusting
At the 2021 annual Berkshire Hathaway shareholders meeting live-streamed on Yahoo Finance, Warren Buffett & Charlie Munger address the crypto market. The 2 minute leaves no doubt on their feelings about cryptos.

Charlie Munger on crypto: ’the whole development is disgusting’

At the annual Berkshire Hathaway shareholders meeting live streamed on Yahoo Finance, Warren Buffett and Charlie Munger address the crypto market now being valued at $2 trillion.

hk.tv.yahoo.com

Warren Buffett: Bitcoin Is An Asset That Creates Nothing
Berkshire Hathaway CEO Warren Buffett speaks to CNBC's Becky Quick about what he thinks about bitcoin & the cryptocurrency markets.



Skate.

 

[MovingAverage]

How can we determine a trend?
It's been volatile trading these last few weeks & the effectiveness of a trend can be patchy. Using an "Index Buy Filter" has the ability to keep you out of the markets when unfavorable trading conditions exist. I should also remark that professional traders trade constantly. I also have a mix of Trading Systems that incorporate an "Index Buy Filter" where others don't.



An "Index Buy Filter"
Using a "Buy Filter" has limitations as the standard run-of-the-mill buy filters use a "moving average" to indicate when the index is off or on. Just by the very nature of using a moving average or its "variations" have a habit of getting you "out" a bit late & reentering the markets can also be "delayed". The lag associated with this type of indicator "is a killer in this game".

Skate.

The lag has to be considered in the context of your overall hold times. Index filters are generally useless for short hold time of day a few days which is why I don’t bother with any index filter on my swing system. But on my weekly long only which can have an average hold time of many many months the lag generally has minimal adverse impact

 

[MovingAverage]

Munger has made his feelings on crypto known in the past
“I hate the bitcoin success,” he said last year. “I think the whole damn development is disgusting & contrary to the interests of civilization.” Despite his apparent loathing, Munger said he was not completely opposed to the US Federal Reserve launching its own digital currency.

Charlie Munger on crypto: ’the whole development is disgusting
At the 2021 annual Berkshire Hathaway shareholders meeting live-streamed on Yahoo Finance, Warren Buffett & Charlie Munger address the crypto market. The 2 minute leaves no doubt on their feelings about cryptos.

Charlie Munger on crypto: ’the whole development is disgusting’

At the annual Berkshire Hathaway shareholders meeting live streamed on Yahoo Finance, Warren Buffett and Charlie Munger address the crypto market now being valued at $2 trillion.

hk.tv.yahoo.com

Warren Buffett: Bitcoin Is An Asset That Creates Nothing
Berkshire Hathaway CEO Warren Buffett speaks to CNBC's Becky Quick about what he thinks about bitcoin & the cryptocurrency markets.



Skate.

I didn’t think too deeply about it—I just thought it funny as I’ve never heard anyone refer to an asset class as a venereal disease. It just appealed to my immature sense of humour

 

[Skate]

Fear is rampant
The Chief Investment Officer for Motley Fool Scott Phillips, explains that the ASX is tanking going on to say that you need to look at the bigger picture how to feel & what to do right now.

The short YouTube video is compelling



Skate.

 

[MovingAverage]

Fear is rampant
The Chief Investment Officer for Motley Fool Scott Phillips, explains that the ASX is tanking going on to say that you need to look at the bigger picture how to feel & what to do right now.

The short YouTube video is compelling



Skate.

Great post @Skate. Some good common sense advice in that video. It's not about timing the market...it's about time in the market.

My thoughts are with the ordinary folks of the Ukraine--this will be a very tough time for them.

Putin you are a complete and utter f wit

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[Skate]

Skate.

 

[soren_lorensen]

An "Index Buy Filter"
Using a "Buy Filter" has limitations as the standard run-of-the-mill buy filters use a "moving average" to indicate when the index is off or on. Just by the very nature of using a moving average or its "variations" have a habit of getting you "out" a bit late & reentering the markets can also be "delayed". The lag associated with this type of indicator "is a killer in this game".

Skate.

okay, noted and agree - but how's your's different and what time frame/systems are you applying it to?

a simple ma filter over the longer term on weekly or monthly systems is still significantly better than buy and hold, but yes there will always be lag to exit and re-enter, 2008GFC took 15-18months and simple filter kept you out of the big drop but 20covid took 6weeks and you'd have probably not seen much difference.

a simple 200day ma filter monthly during the covid crash would have been a killer (in the short term)

i'm interested in hearing what you recommend to reduce this lag?

 

[Skate]

i'm interested in hearing what you recommend to reduce this lag?

@soren_lorensen to save a long boring post about lagging indicators I'm suggesting you search "Lag" by "Skate" & there would find 42 separate posts on the subject.

Other than that
Using an "Index Buy Filter" or not is really a personal decision driven by your risk tolerance as both have their "pros & cons". Also, the run of the mill "Index Buy Filters" uses a simple moving average to indicate how the market is performing in relationship to a "nPeriod" moving average.

I'm not suggesting you trade with one or not
Is an "Index Buy Filter" Crude? - yes,
Is an "Index Buy Filter" Simple? - yes,
Is an "Index Buy Filter" Effective? - yes.

okay, noted and agree - but how's your's different and what time frame/systems are you applying it to?

Oh, I wish it was that simple.

a simple ma filter over the longer term on weekly or monthly systems is still significantly better than buy and hold

Yes, there is a difference between trading & investing. Both have their places & I entertain both.

yes there will always be lag to exit and re-enter, 2008GFC took 15-18months and simple filter kept you out of the big drop but 20covid took 6weeks and you'd have probably not seen much difference.

Using a "Buy Filter" has limitations
When I refer to a "Buy Filter" I'm referring to a standard run-of-the-mill "Index Buy Filter". Most "Index Buy Filter" use a simple "moving average" to indicate when the index is off or on. There are a few low-lagging moving averages that I use & have posted about them many times before. I've even explained the strategies where they have been applied.

Search for moving averages
Search keywords such as "SMA, EMA, DSMA, KAMA" by "Skate" to understand their uses a little better.

Skate.

 

[Skate]

Using an "Index Buy Filter"
Using an "Index Buy Filter" has the ability to keep you out of the markets when unfavourable trading conditions exist, that's a given. I should also remark that professional traders trade constantly. I also have a mix of Trading Systems that incorporate an "Index Buy Filter" where others don't.

"Index Buy Filter"
The shootout between the "Flying Bat Strategy" & "Platinum Strategy" over a short 6 month period should determine whether to trade with or without an "index buy filter".

(a) The "Platinum Strategy" has an "index buy filter" that keeps you out of the markets when trading conditions are unfavorable.
(b) The "Flying Bat Strategy" has "no index buy filter".

The real question
Should you trade when the market is non-responsive?

Recent trading results with the comparison between using an "Index Buy Filter" & "not"



The "Platinum Strategy" uses an "index buy filter"
This strategy is on the super-safe side of trading & will "keep you out" of the markets when the "index buy filter" is (off) or "kick you out" of a position quickly when the position doesn't respond as expected.

The "Flying Bat Strategy" uses "NO index buy filter"
Referring to the above equity curve, the last three weeks haven't been kind at all. Trading constantly "comes at a cost" but scratches the itch of allowing you to trade on a constant weekly basis. I'm just saying when you have a new car it's hard to leave it in the garage because you just want to take it for a spin every week.

My original question
Should we trade when the market is non-responsive?

I'm just saying
"Doing nothing" is "hard to do". Sitting on the sideline "twiddling my thumbs" is not in my DNA as a trader

Skate.

 

[Skate]

Trading is a tough gig
These last few months would test any new trader as it's not been the most optimal time to trade. Even seasoned traders are not happy but it's nothing that we haven't seen before. Rest assured the good times will return, hanging in there will test your mettle. Your ability to cope well when difficult trading conditions persist may be the ultimate decider if you will be a profitable trader or not.

Skate.

 

[soren_lorensen]

Trading is a tough gig
These last few months would test any new trader as it's not been the most optimal time to trade. Even seasoned traders are not happy but it's nothing that we haven't seen before. Rest assured the good times will return, hanging in there will test your mettle. Your ability to cope well when difficult trading conditions persist may be the ultimate decider if you will be a profitable trader or not.

Skate.

Do you use any intraday strategies?
Are your systems long only?

There are many intra trading opportunities to be had, especially around earnings season - now i guess most of your systems are systems i.e. systematic, but even so, there are many intra day system, mean reversion etc, have you seen Radge (US) MR performance today (last night) ??

 

[Skate]

Do you use any intraday strategies?

No, I don't.

Are your systems long only?

Yes, they are.

now i guess most of your systems are systems i.e. systematic

Yes.

have you seen Radge (US) MR performance today (last night) ??

No, I haven't - do you have a link?

Also, I only trade the ASX
The commission would kill me trading a "Mean Reversion Strategy" on the ASX using CommSec. It's also a pity you redacted parts of the Share Trade Trader portfolio report. I would be interested to do the calculations.

Skate.

 

[soren_lorensen]

No, I don't.



Yes, they are.



Yes.



No, I haven't - do you have a link?

Also, I only trade the ASX
The commission would kill me trading a "Mean Reversion Strategy" on the ASX using CommSec. It's also a pity you redacted parts of the Share Trade Trader portfolio report. I would be interested to do the calculations.

Skate.

Yes agree Commsec would be a bad choice for MR systematic approach

I didn't redact, nick does




I'm pretty sure his daily post on PnL is his whole portfolio which i think is about 7 systems or thereabouts.

but it's just @thechartist on twitter