- Joined
- 16 June 2005
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- 6
Hello Margaret,
Yes you have put a lot of work into derivatives. Actually I think in some areas you'd be way ahead of me. I'm very reliant on my software to "paint" the risk and reward picture, with a preference for Binomial over Black and Scholes.
But my mathematical ability without this crutch is poor. I cannot crunch that type of number in my head, although I do have a good feel for what the graph should look like, and what the numbers should be, but this is intuitive. A guy I knew at university was able to do calculus in his head. Amazing guy, talked about reverse demand curves, and all sorts of things even the lecturer was out of his depth. I can't do that, so I rely on the software to do it for me.
I think my strength is in the visualisation of the probability and integrating this with the "facts and figures" risk to reward on the chart, knowing where the "sweet spots" are. I think you clearly know the mathematical backdrop better than I do innately. You've shown this many times.
I sometimes get help building these from time to time when I reach my limits. I do the due diligence because I have to, not because I'm naturally good at it. I'm not. Believe me, I struggle sometimes. Logic is my strength. Crunching numbers isn't. I see the pattern, but I can't formularise it without aid (such as software).
I also heavily rely on software. I am absolutely no mathematician, but I think after studying hundreds, if not thousands of risk graphs over the years, I can pretty much mentally visualize a lot of varying option strategies now.
Re McLaren's interpretation of Gann, I think you'd actually master this on your own once you have access to the pieces you need. You certainly have the capability. All I'd be doing would be to give you a few shortcuts and and accelerating the process to incorporate some of the pieces you are missing (a bit like Heisenberg made a minor but ultimately deal breaking error working on nuclear physics during WWII which meant the Nazis didn't develop nuclear capability).
Looking forward to putting a few more missing pieces of the jigsaw together as I feel there are lots of missing bits at the moment. However, I believe I need to be able to devote the necessary time to understand McLaren’s work properly. Would certainly appreciate any shortcuts when I get there!
Re Franks work. I've looked at this, and frankly (forgive the pun) I don't "buy" it. I think this whole use of the term "dynamic time" is a misnomer. Yes, it's a "dynamic system" since you adjust your appraisal as the market trends, but any system worth it's salt does this. It is a reactive approach, not a forecasting approach. I really don't think he gets "time" at all. His work indicates to me he has totally missed the points wavepicker and I made on this subject.
At several points in the past Frank would be taking the opposite trade when I'd have been winding out positions, or even reversing them. Key examples can be seen reading the comments between Frank and wavepicker, and especially the example of the Feb 24 2007 counter trend. Frank was still long when this sharp pull back occurred. If he really understood counter trends and "time", why doesn't his system deliver responses to address what to me are obvious situations where the trend is at risk? My conclusion is that he just doesn't understand time cycles the way we do. I think there is sufficient evidence from my perspective to support that conclusion for the present time.
That's not to say that there isn't value in his approach - there is if this is your preferred style. He has obviously spent a significant amount of time perfecting what he's doing. What I object to is his "mantra" that his system uses "dynamic time" and my approach is using "static time". This is just nonsense to me and marketing semantics, and in my view misleading.
If he understood time and the pattern of trend he'd be able to perceive when the trend is clearly at risk (from the "McLaren" perspective), which from the evidence he doesn't. So to label something he clearly doesn't understand with a pejorative term begs the question in my view.
I'd be fine with him calling his system "dynamic adjustment to price action", because that is what he's doing. It is based on price highs and lows, NOT time (at least in the sense I am talking about). In McLaren's terms he's using the "division of the range" in PRICE as a basis for his levels. Price is usually the third thing I look at in my approach, not the first.
I agree that Frank’s “time” and the Gann/Mclaren “time” are two totally different things. Chalk and cheese – both useful depending on it’s intended use. It probably also explains the differences in reading the market as the two systems are not alike and would possibly generate different signals at times.
I can understand why Frank uses his terminology as his methods rely on dynamic adjustments based on ever changing time frames, eg. yearly/monthly/weekly, etc, etc. He does forecast – actually just over a week ago he came within 7 points of calling the last top on the SPI. It was all done ahead of time. About the 8th April, he was forecasting an important level at 3611 which was duly reached and the SPI promptly did a u-bolt as it hit that point.
Now, not all his intra-day forecasts have happened, but then it is interesting to watch how Frank adapts to the changing market conditions intra-day. He is obviously very fluent with his own system – at this stage, it’s all much to fast for me to follow clearly. I have only had 6 trading days watching his intra-day premium blog and really only just understanding his basic concepts from his book at this stage. I don’t see it as a holy grail, rather a possible useful tool in the toolbox.
Interestingly, both the two forecasts I have mentioned above fitted in well with range equality in my quickly, sketched out swing charts. I personally think it would be almost impossible to keep up with Gann style analysis on one minute charts, so one needs faster techniques for intra-day trading, IMO.
Motorway talked of "the" high, or "the" low, which is in my view a trap if you try to impose this on time cycles in my style. Time cycles are often NOT based on key lows/highs in a significant number of cases. Of course they are important, but they are only a piece of the puzzle in my view. They become in my view a trap if you fixate too much on them. But this is MY view for me and my "style" I fully recognize that Frank and motorway have their own styles which works for them, and I salute that.
I take my hat off to you if you can understand Motorway’s posts! I wish I could as they look interesting and he puts in a lot of effort, but for me, it’s like reading a foreign language. But yes, I do understand what you are saying about major highs and lows in relation to time cycles.
I agree that Frank has his methods, and I am having a closer look to see if it or even parts of it will work for me.
Cheers