Improving Chart Analysis

[WaySolid]

Trading in the Zone - Kiev

I thought I would comment as I think this is one of the worst trading books I have read. It's so bad I couldn't finish it, I kept trying but it didn't get any better.

Amazon.com has a decent review by Justice Little of this shocker which saves me some typing.

On a more positive note I have found value in sourcing material by finding a reviewer who published a review I respected on a certain book then looking at all of that reviewer's work in amazon.com, a top resource that site.

 

[It's Snake Pliskin]

I loved Fawlty Towers, especially the episode with the hamster – nearly had to go to hospital I laughed so hard, almost split my sides!

Watch this then:
http://www.youtube.com/watch?v=KQimWsPKQR0
The German one does it for me.
Enjoy!

 

[Freeballinginawetsuit]

What do you mean Freeballing? "In the current market"

I don`t discount their use or their value, just the approach to them - looking beyond right or wrong.

Ive charted many breaks or potential breaks or succesful breaks that charted decent momentum but fizzled after a day Snake, in the past few weeks.

Ive also held stocks that the charts said sell, KZL & ZFX ( A MONTH BACK), but they ran 20%.

Charts average out the past, and give an insight to what should happen in the future. The current market is proving a shocker. If you have a look at BPT a few weeks back it was primed to run, instead it tanked 20% in the next few days.

I am saying that the current market could either break past 5140 and run or maybe tank 200 points to 4700, the charts aren't going to indicate this move Snake, it will come out of left field!

Cheers.

 

[It's Snake Pliskin]

Trading in the Zone - Kiev

I thought I would comment as I think this is one of the worst trading books I have read. It's so bad I couldn't finish it, I kept trying but it didn't get any better.

Amazon.com has a decent review by Justice Little of this shocker which saves me some typing.

On a more positive note I have found value in sourcing material by finding a reviewer who published a review I respected on a certain book then looking at all of that reviewer's work in amazon.com, a top resource that site.

I do the same. Use amazon for reviews before buying.

 

[It's Snake Pliskin]

Charts average out the past, and give an insight to what should happen in the future. The current market is proving a shocker. If you have a look at BPT a few weeks back it was primed to run, instead it tanked 20% in the next few days.

Charts don`t give an insight to what should happen. They only tell you where you are at, and what might happen given some objective reasoning.

You may have some issues with your indicators or buy sell points. I don`t believe anything is primed to go - it does or it doesn`t. As far as averaging out the past: not sure what you mean here; perhaps moving averages you are referring to.

Snake

 

[Freeballinginawetsuit]

Charts don`t give an insight to what should happen. They only tell you where you are at, and what might happen given some objective reasoning.

You may have some issues with your indicators or buy sell points. I don`t believe anything is primed to go - it does or it doesn`t. As far as averaging out the past: not sure what you mean here; perhaps moving averages you are referring to.

Snake

What do you do Snake, say a breakout has happened after it has?

Should happen is the same as Might happen to me Snake. Thats the gamble a trader takes, its an educated one

A chart indicates if a stock is going to break, if it doesn't your buy dosen't get executed, SIMPLE.
Of course I am talking about the MACD and Stochie, also a long retrace on an oversold stock to a stable POR and a crossover into positive momentum that should indicate a strong break. Most are fizzling in the current market and dropping back to their POR

Personally I'm trading SP POR at the moment with a decent head and shoulders, basic bottom picking really!.

Its working for me and thats really all that matters Snake.

PS I've got a few buddies that are purely trading on the boards and price volume at the moment, some of these are the richest traders I know and they are having great success, interesting to know your analysis on this one Snake.
Also would be nice to have a roughy on what sought of amounts you trade.

 

[Bobby]

Hello Bob,

So you’d like to see what I make of Frank’s materials? I read a lot of his stuff on RC, and I think there is a genius at work, but a lot of his logic eludes me.

I recently downloaded some of his papers from this site, and must get and read them.

I wish he’d give us a synopsis…

Glad my musings were of interest!

Greeting Magdoran,

Yes I would like that, not a great deal on RC, for more info go to datafeeds forum as well.
As for a synopsis ~ keep wishing

Your musings are entertaining plus interesting.

Take care
Bob.

 

[It's Snake Pliskin]

What do you do Snake, say a breakout has happened after it has?

Should happen is the same as Might happen to me Snake. Thats the gamble a trader takes, its an educated one

A chart indicates if a stock is going to break, if it doesn't your buy dosen't get executed, SIMPLE.
Of course I am talking about the MACD and Stochie, also a long retrace on an oversold stock to a stable POR and a crossover into positive momentum that should indicate a strong break. Most are fizzling in the current market and dropping back to their POR

Personally I'm trading SP POR at the moment with a decent head and shoulders, basic bottom picking really!.

Its working for me and thats really all that matters Snake.

Yes I am quite aware of specualtion in its real sense.
I won`t get into hypotheticals Free/b.

Do what works.
But we are on different planets regarding T/A.
"Might" is the correct word because one does not know.

Snake

 

[coyotte]

Magdoran :

Wormald Overlays :

These are clear plastic sheets with fixed trend lines , which are placed over the chart ( paper or moniter ).

They are used in conjuction with Bill Wormald's book " Trends & Tripwires " which has been around since early 2002 .

Based purelly on trend lines and channels .

To quote from Bill's Web Site " Track the Recurring Geometry in Stock Charts "

While not suitable for all styles of trading , I found it to be a natural evelution to "trend line -- pattern " trading




Apoligise for the outburst , I should respect the view of others --- just loath to see some of these parasites ripping off new traders .


Cheers

 

[lesm]

I have included a link to an extract from Frank's book below:

http://www.dacharts.com/articles/_AnalyMktTrad.htm

This should provide a bit more information on his approach.

With work like Frank's the first thing would be to try and understand the concepts behind the approach before attempting to understand the detail.

Cheers.

 

[Magdoran]

Re Ari Kiev “Trading in the Zone”: I did say Douglas is the key work I subscribe to, and in answer to Snake’s question it was a minor source of additional psychological views.

Kiev had some worthwhile concepts if you battled through the less relevant sections such as incorporating the psychological capacity to “get bigger” at the right time for instance – essentially how to get the mindset to add to positions.

I thought though you had to sift through the material to get any benefit, there were a lot of notions in there that I just couldn’t agree with. But like any work, I’m always careful not to throw the baby out with the bath water.

 

[Magdoran]

Magdoran :

Wormald Overlays :

These are clear plastic sheets with fixed trend lines , which are placed over the chart ( paper or moniter ).

They are used in conjuction with Bill Wormald's book " Trends & Tripwires " which has been around since early 2002 .

Based purelly on trend lines and channels .

To quote from Bill's Web Site " Track the Recurring Geometry in Stock Charts "

While not suitable for all styles of trading , I found it to be a natural evelution to "trend line -- pattern " trading




Apoligise for the outburst , I should respect the view of others --- just loath to see some of these parasites ripping off new traders .


Cheers

Hello Coyotte,


Thanks for the perspective on Wormald, I’m not familiar with the work. Staying true to my inquisitive nature (not the “Spanish” kind – “No one expects the Spanish inquisition!”), I will put it on my list to track down at some point, thank-you.

I can relate to your disdain for the rip off merchants, believe me I feel the same way. I can also understand your comments given your experiences.

I don’t know whether you saw my revision on the thread initiated by Damok where I’d changed my mind, and now think that Guppy/Wilson are actually worthwhile for beginners, (and Watkins for that matter) since I now think that knowledge of all these concepts adds to the individual’s knowledge base, and no matter how they develop, having a range of concepts to draw from may well provide a solid grounding to grow from.

Looking back I think I was too dismissive of these works - in part because I was concerned that straight charting ability can be influenced by different approaches (have a look at my thinking about how to teach people new skills using the music analogy in “Testing a Mechanical Plan”). But on reflection I can see how this could have come across the wrong way, and could have been approached in a more conciliatory tone.

I was interested in the Edwards book on patterns you were talking about. I had heard it mentioned a few times in my travels, but haven’t read it yet. Would you mind giving a brief overview please?


Regards


Magdoran

 

[nioka]

Does anyone know of a chart relating the day of the week to the rise and fall of the market. Is there a "buy Tuesday sell Thursday" effect. Not that I suggest those particular days.???

 

[coyotte]

Does anyone know of a chart relating the day of the week to the rise and fall of the market. Is there a "buy Tuesday sell Thursday" effect. Not that I suggest those particular days.???

Weinstein go's breifly into this in his book, US markets so add one day


Mon : Dn 43%
Tue : Up 51%
Wed : Up 56%
Thu : Up 52%
Fri : Up 60%

Major moving days are Fri followed by Mon followed by Wed

Day prior to a P/H UP --- The day after the P/H down


Hence I suppose it adds weight to the Sell on Mondays & Buy on Tuesdays theory in Ozz



Cheers

 

[professor_frink]

Does anyone know of a chart relating the day of the week to the rise and fall of the market. Is there a "buy Tuesday sell Thursday" effect. Not that I suggest those particular days.???

Nioka,

There is a slight difference, but it's not a huge one. They are calculated on buying the open and selling the close.

For the All Ords(8/84-present day)

Monday- positive 52.59%
Tuesday- 52.10%
Wed - 53.89%
Thurs- 53.43%
Fri - 55.25%

 

[professor_frink]

The results come out different if you look at today's closing price compared to yesterday's-

Monday- 49.36% up days
Tuesday- 50.29%
Wednesday- 53.57%
Thursday- 53.11%
Friday- 54.16%

This probably means a bit more than just looking at whether the close was higher than the open.

Hope this helps.

 

[nioka]

The results come out different if you look at today's closing price compared to yesterday's-

Monday- 49.36% up days
Tuesday- 50.29%
Wednesday- 53.57%
Thursday- 53.11%
Friday- 54.16%

This probably means a bit more than just looking at whether the close was higher than the open.

Hope this helps.

Thanks for the info. I'll try some paper trades as an interesting exercise

 

[tech/a]

Thanks for the info. I'll try some paper trades as an interesting exercise

Waste of time have a look at the skew max 4%
So over whatever period this test took place then youd make $40/$1000 invested. Hardly an edge??
The longer the sample the more you'll find it returns to 50/50.
Also if the trend of the market has been up over many years as it has you would expect there to be a skew towards bullishness.

 

[nioka]

Waste of time have a look at the skew max 4%
So over whatever period this test took place then youd make $40/$1000 invested. Hardly an edge??
The longer the sample the more you'll find it returns to 50/50.
Also if the trend of the market has been up over many years as it has you would expect there to be a skew towards bullishness.

As you say, not a good return on it's own but it could increase the return if taken into consideration with other factors. I have an open mind at this stage.

 

[tech/a]

You are not the first to have studied the idea and wont be the last.

A skew of such a low percentile will have no effect on any other analysis.
You will as your journey progresses come to the realisation that all analysis will over the very long run revert to a 50/50 proposition.

However it is the outliers we must attempt to find.
The 20 mondays in a row that close up,not the 19 that close down to bring the % up back closer to 50/50.So how do you know before hand that this run will occure?---you wont and it doesnt matter---most keep looking for whats not there.

When you finally understand that the analysis has very little to do with profit,will you begin to consistantly profit.

Enjoy.