Newbie Lessons - All your questions answered

[Sir Osisofliver]

Sir O

Have you the facilities to systems test with software?

My view is one which has been set in stone due to the luxury of being able to test
Years of data and unlimited variants in a matter of minutes.
I can walk forward test unlimited markets in any set of market conditions in minutes.
I don't have to wait weeks and heave forbid months!

In the time it takes to gain statistical significance from paper trading I'll have tested 100s of variants over huge data sets.

The point I'm making is this

It's worth the time and effort.
You'll won't even come close to sound software produced systems testing.
You just don't have the flexibility to add or subtract conditions in "what if" senario's

If anyone is serious in this business they will learn more testing 1000s of ideas and creating 100s of conditions and parameters over a wide variety of markets and market conditions than you EVER will paper trading.
Most never come close to months of paper trading I'd say 50 trades would be massive to most and 20 considered significant.

One suprising thing WILL happen

You'll learn why a method will be profitable
You'll change your thinking and be able to knock up a profitable method quickly as you'll soon discover what works and why!

The amount of feed back your software--- if it's good will give you is priceless.
Not the sort of feed back you'll get with paper trading.

Paper trading----- it's not worth the paper it's written on!

Hi Tech,

I have the capacity to software test any number of technical strategies, but the sort of things I do I would not classify as a purely technical strategy. A technical strategy to me is using different indicators in meaningful ways to find potential triggers or targets, and potential exits and profit points. This is easily capable of being replicated and tested across thousands of data points to find statistical relevance as you so aptly described. It's also firmly in the realm of pure technical analysis, only using the price and volume data as inputs into whatever methodology or strategy is being used.

What I'm doing is slightly different (I don't want to give away what I'm doing because then others would do it and I might lose my edge), but many of the systems I use don't incorporate standard technical indicators. Some of these conditions that I am testing against are more fundamental rather than technical in nature. Meaning that attempting to perform the same kind of scan that is based on price or volume data isn't possible.

For example....(not something I use in my system) how would you scan to determine the ratio of institutional to retail investors on the company register?

So why do I do it if it's so time consuming to test the validity of using both technical and fundamental data? Because if it's hard...not many people will do it. It's much easier to do the kind of system testing you are describing and much harder to do things outside the box. Outside the box however I'm not competing with a bunch of other people who have all been triggered in at the same point because they are all using the same data (and suffering the slippage results).

Trust me...I wouldn't go to all that effort if it wasn't worth it. Make sense?

Cheers

Sir O

 

[tech/a]

Complete sence.

I have a few which I cannot test myself.
The difference is Through Rigorous testing of systems that can be tested
I know how to structure methods which cant be tested to skew the results toward a positive expectancy.I know how to apply analysis.

The risk I see all the time with those who have no idea is they revert to the mantra of paper trading.

EG:-Testing by way of paper trading say a method which rates a buy by P/E ratio and a cross above/below an M/A is nothing more than theory.50 trades may end up a profit in a bullish market and a loss in a bearish market---what have you learnt---would one trade it?

If people have no idea how to skew a trading method toward positive expectancy then ANY trading Plan they come up with is nothing more than a GAMBLE.

If that makes sence.

 

[Sir Osisofliver]

Complete sence.

I have a few which I cannot test myself.
The difference is Through Rigorous testing of systems that can be tested
I know how to structure methods which cant be tested to skew the results toward a positive expectancy.I know how to apply analysis.

The risk I see all the time with those who have no idea is they revert to the mantra of paper trading.

EG:-Testing by way of paper trading say a method which rates a buy by P/E ratio and a cross above/below an M/A is nothing more than theory.50 trades may end up a profit in a bullish market and a loss in a bearish market---what have you learnt---would one trade it?

If people have no idea how to skew a trading method toward positive expectancy then ANY trading Plan they come up with is nothing more than a GAMBLE.

If that makes sence.

No disagreement here. I find it mind-boggling that people will put actual money towards a strategy that they have no idea whether will make them a profit or not. But then I realize that there are people out there who are kinesthetic, who learn by doing, who no amount of analysis or testing is going to be a learning experience for them until real money is at risk.

I find it interesting though in your above example that you mention bearish and bullish markets for the same system however. My experience is that of my systems, they work to a greater or lessor efficiency depending upon the overall trend and position of the market. One system will return a profit in any market but the rate of return varies wildly depending on the overall trend of the market. I run this one all the time because hey I'm making money right, even though it may be piddling levels of return when the conditions aren't right. One (which is in mothballs at the moment) works extremely well in a late cycle environment (which I can't see happening until 2013-2014).

I'll use that system over my others because the level of return will vastly outstrip my other systems. Do you run different systems at different times, or do you try and maintain one system that gives a consistent return in all market conditions?

Cheers

Sir O

 

[tech/a]

No disagreement here. I find it mind-boggling that people will put actual money towards a strategy that they have no idea whether will make them a profit or not. But then I realize that there are people out there who are kinesthetic, who learn by doing, who no amount of analysis or testing is going to be a learning experience for them until real money is at risk.

true and most of these dont have a financial plan to wealth throught trading.Most expect and want 500% return on every trade (No different to me really! (sic)).

I find it interesting though in your above example that you mention bearish and bullish markets for the same system however. My experience is that of my systems, they work to a greater or lessor efficiency depending upon the overall trend and position of the market. One system will return a profit in any market but the rate of return varies wildly depending on the overall trend of the market. I run this one all the time because hey I'm making money right, even though it may be piddling levels of return when the conditions aren't right. One (which is in mothballs at the moment) works extremely well in a late cycle environment (which I can't see happening until 2013-2014).

I have switches for my portfolio methods.
Futures are VSA discretionary trading. (tested with Algo's but traded with algo basic combined with discretionary M/M).

I'll use that system over my others because the level of return will vastly outstrip my other systems. Do you run different systems at different times, or do you try and maintain one system that gives a consistent return in all market conditions?

Cheers

Sir O

I only one a few Long Portfolio methods --- none now.
I trade futures Discretionary as mentioned above.


Rocket scientist Son and I are working on a number of Systems and accepted trueisms.
Our research will be of interest to many---if you see what Im getting at.

I supply the Technical analysis he supplies the Maths.---algo's

 

[PinguPingu]

I sometimes see in Market Depth (Order detail) many many order for very small parcels. One example is HIL today. What's the point of this other than to give the illusion of many buyers/sellers?

 

[marioland]

Is there a website where you can see companies that plan to issue more shares? I know you can see them on the news regarding a company, but maybe there is a website that has all the data in one place?

 

[VSntchr]

Hey guys, just wondering where I can find credit ratings for ASX listed companies...I need to include it for a report I am writing on ARB for a uni assignment...

 

[hunterh]

Hi guys my first visit to your site . but I seem to have run into a bit of trouble trying to view the latest posts on some code threads..By that I mean Is there anyway of viewing the latest posts at the start of the thread ,instead of having to navigate to the last page ..IE if the thread On eg WBC has 25 pages the latest post (todays) seem to be on the very last page .?? IE page 25.

Sorry for the the question ...

regards Hunterh

 

[Joe Blow]

Hi guys my first visit to your site . but I seem to have run into a bit of trouble trying to view the latest posts on some code threads..By that I mean Is there anyway of viewing the latest posts at the start of the thread ,instead of having to navigate to the last page ..IE if the thread On eg WBC has 25 pages the latest post (todays) seem to be on the very last page .?? IE page 25.

Sorry for the the question ...

regards Hunterh

Hi Hunter, welcome to ASF!

Yes, you can change the order of posts in a thread so that the most recent post is displayed first. Just follow these steps:

1. Click on the "Settings" link at the top, right hand side of the website.
2. On the far left you will see a section titled "My Settings". Click on the "General Settings" link located in the "My Account" subsection.
3. Scroll down until you come to a section titled, "Thread Display Options". Where it says, "Thread Display Mode" select "Linear - Newest First" from the drop down menu.
4. Scroll down to the bottom of the page and click "Save Changes" and you're done!

It might be worth exploring some of the options in this section as there may be other preferences that you wish to customise.

Hope that helps.

 

[davede]

Hey guys, just wondering where I can find credit ratings for ASX listed companies...I need to include it for a report I am writing on ARB for a uni assignment...

Hi VSntchr,

I think the ratings agencies should provide them on their websites (S&P, Moody's, Fitch).

 

[Tyler Durden]

With DRPs, do companies buy the shares from the market to give back to the shareholders, or do they just issue new shares for the DRP? If it's the latter case, I would assume this dilutes the shares of existing share holders?

 

[Woroni]

Hi,

Just looking for help with charts. I'm looking for a FREE chart that tracks the oil (WTI) price over 1+ yrs. Now I've come across this: http://stockcharts.com/freecharts/perf.html?$WTIC

I like it, but unfortunately, it maps performance, I want the actual price rather than performance changes. Can anyone provide me with a link to any such chart online? If you can get one based on daily candlestick format, even better! Thanks in advance.

 

[davede]

Hi,

Just looking for help with charts. I'm looking for a FREE chart that tracks the oil (WTI) price over 1+ yrs. Now I've come across this: http://stockcharts.com/freecharts/perf.html?$WTIC

I like it, but unfortunately, it maps performance, I want the actual price rather than performance changes. Can anyone provide me with a link to any such chart online? If you can get one based on daily candlestick format, even better! Thanks in advance.

Stock charts also provides a price chart for WTIC with candle sticks. type $WTIC in the symbol lookup.

http://stockcharts.com/h-sc/ui?s=%24WTIC

Is that what you're after?

 

[Woroni]

Stock charts also provides a price chart for WTIC with candle sticks. type $WTIC in the symbol lookup.

http://stockcharts.com/h-sc/ui?s=%24WTIC

Is that what you're after?

Unfortunately that doesn't go past 12 months. And there is a lot of junk as well. I don't need all that and it just clutters things up. There must be a simple yr+ oil chart out there....

 

[davede]

Unfortunately that doesn't go past 12 months. And there is a lot of junk as well. I don't need all that and it just clutters things up. There must be a simple yr+ oil chart out there....

For the record at stockcharts.com you can adjust the range under the 'range' box to up to 3 years and remove all the indicators under overlays and indicators.

There are numerous other sources that provide oil price data.

Here you can find oil prices back to the late 80s. I believe you can download .xls files with the prices too.

Is that more what you're after?

 

[kid hustlr]

With DRPs, do companies buy the shares from the market to give back to the shareholders, or do they just issue new shares for the DRP? If it's the latter case, I would assume this dilutes the shares of existing share holders?

This could be wrong but this is my understanding:

They issue new shares. Yes it dilutes existing share holders (lowers the SP) but no more so than if those investors had taken the dividend in cash.

Effectively if you own a share a share worth $100 which pays a 2 dollar dividend, and I also own one of the same share, regardless of whether I choose to take the cash dividend or a DRP you're share value should (in theory) drop to $98 regardless of my action.

Hope that makes sense, someone step in and assist if its wrong!

 

[KurwaJegoMac]

This could be wrong but this is my understanding:

They issue new shares. Yes it dilutes existing share holders (lowers the SP) but no more so than if those investors had taken the dividend in cash.

Effectively if you own a share a share worth $100 which pays a 2 dollar dividend, and I also own one of the same share, regardless of whether I choose to take the cash dividend or a DRP you're share value should (in theory) drop to $98 regardless of my action.

Hope that makes sense, someone step in and assist if its wrong!

Pretty much right, but there are some technicalities involved that may change the outcome.

If the DRIP is company issued, then it comes from the company's own reserve of shares. When you sell these DRIP shares they go back into the company pool - hence no impact to the company's share price directly.

If the DRIP is operated via a brokerage account then the shares will come from the market (and need to be purchased on the market) and therefore will impact the share price directly.

 

[Woroni]

For the record at stockcharts.com you can adjust the range under the 'range' box to up to 3 years and remove all the indicators under overlays and indicators.

Thanks for that! Execellent. Didn't know how to get rid of the other stuff and that the ange could be customized. Cool.

 

[marioland]

I was watching a stock today and I noticed about 10 trades of just 1 share on a stock that has an average of 20-30 trades a day. Surely, this wouldn't be from regular traders, so what are these 1 share trades?

 

[carlos169]

May I please convey my appreciation and thanks to Sir O and everybody else who is contributing to this thread.

Absolutely fantastic for a newb like me to start gaining some traction, research and develop my wealth plan.

Cheers!!!!