Dump it Here

[Skate]

Not much point looking at paper trading until that is resolved. Profitable systematic trading is indeed possible, and trading rules can be simulated - but using incomplete data and poor modelling won't get you there.

Paper trading a flawed strategy
Originally, I decided to halt my paper trading of the strategy until I could fix the data issues and re-run the backtests properly. However, upon further reflection, I realised there is value in proceeding with the paper trading as-is. Even though the backtest results are biased, paper trading the flawed strategy can still provide an important educational lesson for me.

Trading with an edge
@ducati916 often talks about a "true edge". With @Richard Dale's words ringing in my ears, I have to agree that using any Norgate data subscription level below "Platinum" can create an illusion of an edge.

Limited value
The initial first week's performance at the end of trade today is disheartening, it simply exposes critical flaws in my development process and reliance on incomplete data. Seeing the strategy crash and burn highlights the sizable gaps that can exist between backtested theory and live practice. Though painful, failure can be a humbling process when paper trading a new strategy. Rather than feeling discouraged, I will take this as a pivotal learning experience to improve my processes going forward.

Skate.

 

[rcw1]

Limited value
The initial first week's performance at the end of trade today is disheartening, it simply exposes critical flaws in my development process and reliance on incomplete data. Seeing the strategy crash and burn highlights the sizable gaps that can exist between backtested theory and live practice. Though painful, failure can be a humbling process when paper trading a new strategy. Rather than feeling discouraged, I will take this as a pivotal learning experience to improve my processes going forward.

Skate.

Good evening Skate,
If I may be so bold as to suggest, sometimes, we get to listen too much, and lose sight of one's own talent and way to do business in the sandpit.

Sure, it pays to reach out and learn, but it also pays to roll the dice and go for it, never missing an opportunity, as at times opportunity can be hard to come by.

Have a very nice night.

Kind regards
rcw1

 

[Miner]

@Skate - what do you see on NIC ? a crash in the near future?

 

[farmerge]

Good evening Skate,
If I may be so bold as to suggest, sometimes, we get to listen too much, and lose sight of one's own talent and way to do business in the sandpit.

Sure, it pays to reach out and learn, but it also pays to roll the dice and go for it, never missing an opportunity, as at times opportunity can be hard to come by.

Have a very nice night.

Kind regards
rcw1

@rcw1 and how many times have the dice been tossed, turned, rolled and queried as, we the punters, gamblers have missed a golden opportunity to make a quick quid or three.
In my case, naval gazing and pondering has been fraught with oh well there's always next time. bugga.

 

[Skate]

View attachment 162154
@Skate - what do you see on NIC ? a crash in the near future?

We all see something different
I'm saying, give the same price chart to a variety of experienced traders & they will always see something different. When it comes to chart reading, I'll leave that to the expert as some patterns can give you a false sense of security leading you into making a poor trading decision.

@Miner, I'm more interested in what you see.

In terms of the stock chart - I don't make market predictions
But I am able to make some general comments. (ASX:NIC) Nickel Industries has had a strong run up over the past year that may have priced in much of the positive outlook. Some consolidation or correction would not be surprising. Ultimately, Nickel Industries' performance will depend on how well it manages its growth, costs and capital requirements relative to market expectations. While the industry outlook appears positive, investors and traders alike will want to see the company translate that into earnings growth after this period of heavy investment.

My objective observations
Based on Nickel Industries latest half year results and industry dynamics, the nickel market fundamentals appear strong with demand growing from the electric vehicle and battery sectors. This aligns with Nickel Industries' expansion plans and should support demand for its nickel output. However, the recent half year results showed some margin compression which put pressure on profitability despite strong revenue growth. Managing costs and efficiencies will be important going forward. The strategic partnerships and investments made by Nickel Industries position it well competitively and financially for significant production growth. But execution risks remain.

Going forward
While these results validate the strong production growth being achieved by Nickel Industries, declining profitability due to margin squeeze is a concern. Successfully translating operating scale into earnings will require a sharp focus on cost control and operational efficiencies going forward. The investments already made sets Nickel Industries up for its next phase of expansion to capitalise on strong nickel demand.

In summary
Overall (IMHO), Nickel Industries grew its business substantially but has work to do on costs and profits. Its expansion sets it up for a much larger future.

Skate.

 

[Skate]

@Skate - [After looking at the chart ] what do you see on NIC ? a crash in the near future? (Bolding added for clartity)

@Miner, thanks for raising an interesting point about predicting a stock's future performance by analysing its chart. While I don't personally rely on chart reading in my trading approach, I agree it can provide useful context and insights for some traders.

While waiting for the markets to open I should do a series of short post to explain chart reading from my perspective.

Skate.

 

[Skate]

Chart reading
First off, I should make a few general comments about the pitfalls when looking at stock charts. It is worth pointing out that our minds can play tricks on us and cause us to see things that aren't really there. This is because the human brain is wired to look for patterns, even in completely random data.

We want to make sense of what we see
But this tendency can lead traders into some common traps. For example, we might think we see a pattern that is signaling the stock will go up or down soon. In reality, though, that pattern was just due to chance and won't happen again. We can also make the mistake of thinking a stock will keep doing what it did recently, even though past performance doesn't predict future moves.

Other times we find patterns only because we were specifically looking for them
Once we have a theory in mind, we ignore information that contradicts it and only see evidence that confirms what we want to believe. These kinds of mental biases trip up many traders. Chart reading has its uses, but it is not a perfect predictive tool. The patterns we see are open to interpretation and imagination. With caution and common sense, chart reading can be a useful part of a trader's toolkit. But our eyes can deceive us if we aren't careful.

Skate.

 

[Skate]

The Benefits and Limitations of Chart Reading for Traders
Chart reading can provide useful insights into market trends and patterns. However, price movements are driven by complex factors, not just technical interpretation. Charts are driven by human emotions

Using Chart Reading to Understand Market Psychology
Charts can help traders understand market psychology and make informed decisions. By analysing charts, traders can gain insights into fear, greed, and other emotional dynamics driving price swings. However, charts don't predict future moves, so combining chart reading with risk management is key.

Skate.

 

[Skate]

Is Chart Reading a Necessary Trading Skill?
Some traders view chart reading as an invaluable skill for identifying advantageous market entries and exits. Others argue chart reading is prone to subjective biases and should be validated with other analyses.

Incorporating Chart Reading into a Balanced Trading Approach
Chart reading is one tool among many for analysing financial markets. It can provide useful context on price action and market psychology. However, charts have limitations and should be combined with other core trading skills for a balanced approach.

Charts alone do not predict future moves
Backtesting trading strategies is also key to validating performance. Some traders rely primarily on chart patterns and technical indicators to time entries and exits. Combining chart reading with other inputs creates a more robust process.

Skate.

 

[Skate]

As a system trader
I rely primarily on objective buy and sell signals generated by my trading strategies. However, I still use chart reading in a supplemental capacity, to help visualise market context and provide additional confirmation for my signals. The key benefit of a systematic approach is that it removes much of the subjectivity involved in discretionary trading and chart reading. My models analyse statistical backtests to identify patterns with robust predictive power across large datasets only when I had Norgate "Premium Data". This evidence-based process aims to avoid many of the emotional biases that can affect humans analyzing charts.

I don't completely ignore the information contained in price charts
Observing how the market is responding around my signal points can help assess whether momentum is aligning with the signal as expected. The visual chart can reveal subtle cues not fully captured by the quantitative indicators. Additionally, understanding dynamic support and resistance or seeing how sentiment is shifting serves as a useful context for managing trades. So while the chart does not drive my entries and exits, it acts as a complementary check.

It's time to hop off my "Soap Box"

Skate.

 

[DrBourse]

The Benefits and Limitations of Chart Reading for Traders
Chart reading can provide useful insights into market trends and patterns. However, price movements are driven by complex factors, not just technical interpretation. Charts are driven by human emotions

Using Chart Reading to Understand Market Psychology
Charts can help traders understand market psychology and make informed decisions. By analysing charts, traders can gain insights into fear, greed, and other emotional dynamics driving price swings. However, charts don't predict future moves, so combining chart reading with risk management is key.

Skate.

Hi Skate....
This will be the second time in many years that I have questioned a post of yours...
You post that "Charts are driven by human emotions" - Dunno about that......

Reading or trying to interpret a chart may fall into the Human Emotions catagory... also Dunno....

IMO, Charts are the exact results of research and careful calculations, punters decide to Buy or Sell after careful consideration of as many facts that they can find....

Sheep on the other hand are either Led by the Nose, or their Emotions...

Brokers & Analysts on the other hand use their “In House” Guesstimate numbers to suit their own agenda's...

So, IMO, a broad statement like "Charts are driven by human emotions" is a bit misleading to Beginners in particular....

Sorry bout that M8….

 

[Skate]

Hi Skate....
This will be the second time in many years that I have questioned a post of yours...
You post that "Charts are driven by human emotions" - Dunno about that......

Reading or trying to interpret a chart may fall into the Human Emotions catagory... also Dunno....

IMO, Charts are the exact results of research and careful calculations, punters decide to Buy or Sell after careful consideration of as many facts that they can find....

Sheep on the other hand are either Led by the Nose, or their Emotions...

Brokers & Analysts on the other hand use their “In House” Guesstimate numbers to suit their own agenda's...

So, IMO, a broad statement like "Charts are driven by human emotions" is a bit misleading to Beginners in particular....

Sorry bout that M8….

@DrBourse you raised a very fair critique that was well-articulated. I recognise I have a tendency to quickly spew out information without always carefully considering my wording. In my haste, I can make overly broad generalisations that at times miss the mark. Your alternative view provided a meaningful balance. Having my statements constructively challenged improves my critical thinking and communication. It reminds me to slow down and be more measured when posting.

Also, you're absolutely right that charts plot the precise record of price activity based on actual buy and sell transactions in the market. I should have been more precise in saying that price movements reflected in charts can sometimes be influenced by human emotion. For example, bubbles or panics are often thought to be driven by investor greed or fear spreading through the market.

However, you make an excellent point that many traders and investors analyse carefully and aim to trade rationally based on facts and research. So it was an overgeneralisation on my part to imply human emotion is the main driver behind charts and price action. Ultimately charts visualise the collective market activity, both rational and irrational. I agree ascribing chart movements solely to emotions is misleading, especially for beginners. There are many factors at play.

I often share market information from my personal perspective, but others may see things differently. It reminds me of the need to be more precise with my words and qualify broad assertions. Shooting from the hip with broad generalisations does not always convey my perspective accurately. Your feedback highlights the importance of carefully qualifying my statements, so they are not misinterpreted, especially by those newer to trading.

Skate.

 

[Miner]

@DrBourse you raised a very fair critique that was well-articulated. I recognise I have a tendency to quickly spew out information without always carefully considering my wording. In my haste, I can make overly broad generalisations that at times miss the mark. Your alternative view provided a meaningful balance. Having my statements constructively challenged improves my critical thinking and communication. It reminds me to slow down and be more measured when posting.

Also, you're absolutely right that charts plot the precise record of price activity based on actual buy and sell transactions in the market. I should have been more precise in saying that price movements reflected in charts can sometimes be influenced by human emotion. For example, bubbles or panics are often thought to be driven by investor greed or fear spreading through the market.

However, you make an excellent point that many traders and investors analyse carefully and aim to trade rationally based on facts and research. So it was an overgeneralisation on my part to imply human emotion is the main driver behind charts and price action. Ultimately charts visualise the collective market activity, both rational and irrational. I agree ascribing chart movements solely to emotions is misleading, especially for beginners. There are many factors at play.

I often share market information from my personal perspective, but others may see things differently. It reminds me of the need to be more precise with my words and qualify broad assertions. Shooting from the hip with broad generalisations does not always convey my perspective accurately. Your feedback highlights the importance of carefully qualifying my statements, so they are not misinterpreted, especially by those newer to trading.

Skate.

Dear @Skate and @DrBourse - Hats off to both for a well articulated discussion with mutual respect.
It is very helpful for dumb miner for sure. Thanks a lot for your valuable time and input, in responding to my request .

 

[Skate]

"I recently shared a "quote of the day" that I incorrectly attributed to @Nick Radge. After further research, I realised this quote was lifted from a larger passage that I should have been properly cited. I made a mistake by not verifying the source before sharing, and I sincerely apologise for improperly attributing this quote. In the future, I will be more thoughtful about researching the origin of quotes before sharing them.

When ignorance screams, intelligence moves on
"The biggest waste of time is arguing with the fool and fanatic who doesn’t care about truth or reality, but only the victory of his beliefs and illusions. Never waste time on discussions that make no sense. There are people who, for all the evidence presented to them, do not have the ability to understand. Others who are blinded by ego, hatred, and resentment, and the only thing that they want is to be right even if they aren’t".

Another serious design flaw - Conviction
A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures & he questions your sources. Appeal to logic & he fails to see your point. People tend not to listen to alternative views. Your belief system defines whether you agree or disagree with them but if you don’t listen you forgo the right to understand their point of view.

While I'm unsure of the original source
I think there is value in reflecting on the message. It pays to never waste time on discussions that make no sense. There are people who, for all the evidence presented to them, don't want to understand. Others are blinded by ego, hatred, and resentment and the only thing that they want is to be right even if they aren’t.

Skate.

 

[Skate]

Dear @Skate and @DrBourse - Hats off to both for a well articulated discussion with mutual respect.
It is very helpful for dumb miner for sure. Thanks a lot for your valuable time and input, in responding to my request .

@DrBourse offered a thoughtful counterpoint and highlighted the need for precision when posting my thoughts. Providing an alternative viewpoint in a constructive manner promotes deeper understanding. As traders, we share information from our own perspective and understanding. Being right or wrong (in this thread) is not a matter of concern but when information is presented in a generalised way, rightly so it should be called out.

@Miner, I'm curious to hear your perspective on NIC's chart. I would really value your insight. When you look at NIC's recent price action and volume, what stands out to you? Do you see any signs pointing to a potential crash in the near future, or do you think the chart tells a different story?

Skate.

 

[ducati916]

IMO, Charts are the exact results of research and careful calculations, punters decide to Buy or Sell after careful consideration of as many facts that they can find....

LOL.

What is a chart?

It is the historical record of the open, range and closing price of an instrument.

Does every person who studies (looks at) that price chart undertake a (fundamental/systemic) analysis of the facts that determine that price? Not even close. Not even possible. Some will attempt such an analysis, many are: it's going up (down) I'll buy (sell) without knowing anything more than that. A famous example: the Turtle Traders.

Many will apply a myriad of indicators to that chart and buy/sell based on the indicators.

Many will transact purely on emotion. I love my TSLA car, I'll buy the stock.

Then you have the hardcore technical traders. They may not even know the name of the company, never mind any relevant information. They trade on a hundred different methodologies. Stars and moon, golden ratios, whatever.


jog on
duc

 

[Skate]

LOL.

What is a chart?

It is the historical record of the open, range and closing price of an instrument.

@ducati916 you make some great points. A price chart simply shows the historical data but does not reveal the reasons behind price movements. Traders interpret and act on the chart in different ways based on their methodology.

The key takeaway is that charts are a tool, but require accurate analysis to be useful. There are many different approaches to trading that go far beyond just looking at a price chart.

Skate.

 

[Skate]

Confessions of a System Trader
Trend trading is simply following signals generated by a trading strategy. With my style of trading I aim to ride price trends that are going up. I enter when the system signals an emerging uptrend, and exit when it signals the trend has ended.

I know that not every trade will be a winner. My goal is to follow the system rules and let the overall probabilities work in my favour over many trades. I have a set exit rule to close positions when Amibroker gives a sell signal. I won't override the system by trying to time my exits or hold on to losing positions. Discipline is critical in mechanical trading.

Diversification across many trades helps manage the risk that some will be losers. The key is following my trading plan and strategy, rather than reacting emotionally to each trade. The core idea is that I have a defined, rules-based strategy that I follow without override. This helps remove subjective decision-making and rely on probabilities over time. I focus more on executing my plan than on predictions about any single trade.

Skate.

 

[Skate]

Then you have the hardcore technical traders. They may not even know the name of the company, never mind any relevant information. They trade on a hundred different methodologies. Stars and moon, golden ratios, whatever.

Questions put to a technical system trader
Being a system trader and only speaking for myself, below are my responses.

Q1: What stock are you buying?
A1: I don't actually know or care. My trading system identifies opportunities.

Q2: Why buy something if you don't know what it is?
A2: My system gives a buy signal when its rules detect a potential new uptrend.

Q3: Aren't you worried about buying a loser stock?
A3: Sure, about half the buy signals will lose money. That's normal in trend trading.

Q4: When will you sell?
A4: Only when my system gives a sell signal. I don't try to time or guess exits.

The Key Points
1. With my style of trading I use a defined, rules-based system for entries and exits.
2. I don't pick stocks or try to predict trends.
3. Losing trades are expected.
4. It can be boring just following signals, but it works for me over.
5. Overthinking usually hurts more than it helps.
6. Stay disciplined.

The main premise behind system trading
It's quite simple actually and very easy to follow. In a nutshell, the idea is to follow a system without override, accept losers as part of the trading game, and stick to the plan.

Skate.

 

[ducati916]

Questions put to a technical system trader
Being a system trader and only speaking for myself, below are my responses.

Q1: What stock are you buying?
A1: I don't actually know or care. My trading system identifies opportunities.

Q2: Why buy something if you don't know what it is?
A2: My system gives a buy signal when its rules detect a potential new uptrend.

Q3: Aren't you worried about buying a loser stock?
A3: Sure, about half the buy signals will lose money. That's normal in trend trading.

Q4: When will you sell?
A4: Only when my system gives a sell signal. I don't try to time or guess exits.

The Key Points
1. With my style of trading I use a defined, rules-based system for entries and exits.
2. I don't pick stocks or try to predict trends.
3. Losing trades are expected.
4. It can be boring just following signals, but it works for me over.
5. Overthinking usually hurts more than it helps.
6. Stay disciplined.

The main premise behind system trading
It's quite simple actually and very easy to follow. In a nutshell, the idea is to follow a system without override, accept losers as part of the trading game, and stick to the plan.

Skate.

The main premise behind system trading is that the system has a positive expectancy or a (real) edge as per point #1

Only when the system has the above, can you follow points 2 - 6 as listed.

jog on
duc