Newbie Lessons - All your questions answered

[sinner]

Bahahahahahah :bad:

Rude.

But it still doesn't make sense why if you thought a MA has some effect to smooth out volatility OR as a trend channel why not just use one? To me its like having a chart with 3 indicators in the false sense that more is better, in effect what you will end up doing is having to wait LONGER for all indicators to give a signal in the false sense that that is confirmation. But there is no such thing as confirmation.

The reason to use more than one is to aggregate signals to take advantage of the fractal nature of price/time (otherwise you suffer from a narrow parameter set, i.e. you better pick the right parameter) and exploit hysteresis...

I don't know why you keep harping on about 'confirmation'. You're the only one who's even mentioned it.

Dunno if you've ever been to Jez Liberty's blog but he tracks simple automated trend following systems. Which have largely been flat/poor this year, but performed quite strongly last month. He's also taken the concept you deride to it's maximum and created a composite trend following index from all the systems.

http://www.automated-trading-system.com/state-of-trend-following-in-may/

Down the bottom is a link showing the systems (which include a few MA cross systems) going back 20 years across a basket of futs. YTD return for 10-20MA system is 17% and 10-20-50MA system is 26%. YTD for the 50-200MA system is -9%, for the 20-50-200 its 6.8%. Across a basket of over 50 instruments. I guess they must all be in a bull market....

 

[Trembling Hand]

Rude.

Down the bottom is a link showing the systems (which include a few MA cross systems) going back 20 years across a basket of futs. YTD return for 10-20MA system is 17% and 10-20-50MA system is 26%. YTD for the 50-200MA system is -9%, for the 20-50-200 its 6.8%. Across a basket of over 50 instruments. I guess they must all be in a bull market....

Thats my point. Is that the best, a dude who makes money from adsense banners on a blog.

And BACKTESTS a system he doesn't trade!!

All the systems were tested with the same simple position sizing rules of 1% per new trade. No other Money/Risk Management rules were used. No trade friction (slippage or commission) was applied. No return on margin is added to the system performance

What about someone who actually makes REAL money from a MA cross consistently?

 

[Joules MM1]

So when the Black-Sholes calculator stops working,
(due to excessive volatility)
the trader reverts back to gut feeling.

no......what youve just said is the trader reverts to throwing their hands in the air and saying (correctly)

I don't know what's going on!

if the trader admits they dont know what's going on at that point they'll stop reaching for the nearest crutch and actually search for the right questions rather than all this techno-babble

sometimes i need to step back and ask about the auction in front of me, the current play by the people who are trading now, in the present........you are involved in a simple auction process not a complicated lingo-istic jibba jabba fest......

the sentence

I don't know what's going on!

is the sentence that makes you do nothing or exit.....simple actions that are based on the truth of your thinking, no hiding behind gobbledygook stuff

historic science does not effect current price the way most people want it to and where (argued) it does the measure used is usually way off base because the basis of the measure in use is incongruent to current pricing

price is the measure of supply and demand at the time you see it, in the present.....looking at a 8/15 whatever filter you have distorted the current supply/demand picture to suit rather than attempting to understand the current auction phase........

 

[Boggo]

I dont know of one with a crossing of an M/A as a stand alone system.

But used as an adjunct they can be useful.
I have used a price cross of a 180 day EMA as a successful exit criteria.
I also have as part of an entry criteria that price must be above a 40 day ema.

Short term forget it.
Working just on the bars and volume best.

Three chart examples of a simple heads display up that seems to work best on weekly charts.
Basically two closes (the last one higher than the first) above an upward trending 34 EMA, the exit is the reverse regardless of EMA direction.
The bottom chart (PRU) is a current heads up this week.

Just my

(click to expand)

 

[sinner]

EDIT: Actually, nevermind. I'll rejoin the thread when it returns to being a discussion.

 

[Trembling Hand]

Again, like I said, I use two different MA cross setup consistently in my real daily trading.

I bet they are not a SMA or even a normal EMA?

 

[prawn_86]

Just a quick reminder that we might be getting a bit off topic from "Newbie Lessons". If members want to have a more detailed discussion about MA crosses and their viability in detail perhaps it is better off in a diferent thread?

 

[sinner]

I bet they are not a SMA or even a normal EMA?

You lose your bet. SMA in one case and EMA in the other. I also use SMA of price and volatility as component in a few technical indicators. What do I win?

 

[Trembling Hand]

You lose your bet. SMA in one case and EMA in the other. I also use SMA of price and volatility as component in a few technical indicators. What do I win?

Ok a beer :alcohol:

 

[mazzatelli]

Only MA crossover system I've seen that works is MA on index vs. MA on custom high beta tracker against the index, though it did exhibit potential large draw-downs every now and then.

Bit different to MA crossover of different lengths on the one [insert stock/index here]

 

[timestwo]

anyone have some tips on what the best way is to calculate the net worth of a company? so you have the financials say total current assets and liabilities but if the liabilities are more than assets would that mean that the company is worth -ve dollars? how does this value then translate to calculating how much the share is worth for that particular company? thanks

 

[Joules MM1]

anyone have some tips on what the best way is to calculate the net worth of a company? so you have the financials say total current assets and liabilities but if the liabilities are more than assets would that mean that the company is worth -ve dollars? how does this value then translate to calculating how much the share is worth for that particular company? thanks

.....look at the ability to repay debt, how many times interest can be covered from current earnings, what is the price to growth ratio, a company can have higher liabilities yet have much stronger earnings outlook.....the difference is the established liability versus it's projected ability to pay down those liabilities and not incur, or incur at a lower rate, the cost of producing income, the cost of operation plus any new capital outlays...on top of that what is the expected yield, if any......look at the stock on issue versus it's competitors and ask does the company have to go back to shareholders to raise capital, how many times has the company had to do this and what did they do with the funds, how likely or how deep does the capital raising dilute value ........have fun inside those balance sheets......

what's the companies competitive edge within it's sector/industry, what are likely to be the future costs of investment by the company to stay with or ahead of the developments within it's own industry....

Fox Freeman use to have a good course on fast fundamental analysis....Peter Spann, ex check-out chick at woolies now multi something-aire in property and stocks

 

[History Repeats]

anyone have some tips on what the best way is to calculate the net worth of a company? so you have the financials say total current assets and liabilities but if the liabilities are more than assets would that mean that the company is worth -ve dollars? how does this value then translate to calculating how much the share is worth for that particular company? thanks

Always look at cash flow statement first. Source: my auditing class lecturer, former manager at big 4.

 

[timestwo]

thanks guys, so that's what fundamental analysis is all about, will have a read of this also (http://www.investopedia.com/university/fundamentalanalysis/#axzz1xq4m4ato) and hopefully come up with a quick summary so that i am able to analyse my own picks in the future

 

[stu192]

So, getting back on topic - what's next SirO?

 

[Sir Osisofliver]

EOFY

With 30 June approaching I won't have time to devote to the newbie thread (and our latest discussion on system design) until late next week at the earliest. I'm also going to take a few days rest whilst the school holidays are on.

Here's something to ponder however about the system. Talk about it amongst yourselves. I mentioned it previously (back on page 32 I think) about the sorts of things we can scan and look for, and I asked for a ranking. One of them I mentioned was news reports. Both Tech and TH correctly stated the likelyhood that short volume would be unwound within the selling volume. If you've been tracjing the short positions in JBH, you'll notice that this is already occuring. Without a triggering event we are likely to see an extended sideways movement of price whilst the short positions unwind in the selling volume. For a short squeeze set-up - we need something that will effectively dry up the present selling volume, leaving the short holders little choice but to close out positions and drive up the price.

Here's something to think about.
1) We are approaching reporting season
2) Companies publish these reporting dates

Cheers

Sir O

 

[glenmorangie]

I have just acquired some shares given by my company, can I transfer them to my wife as she is a lower income earner than me and so reduce the tax that I pay on getting the shares?

 

[Nooob]

Hi everyone
I'm a new investor (not a trader yet).
I was busy reading 34 pages of information in the last 10 days (I was completely lost from page 30 to 34).
First of all thanks to everyone who contributed in this subject of helping newbies and I really appreciate your effort.

2nd is that after reading some of the posts about the floats and low quality shares circulating within the managed funds, I start to wonder where can I read the proper reviews on different hedge funds and FX manage funds to make sure that I'm not investing with crooks?

After all investors and traders are all part of the same food chain and we should be able to find a ground to trust and work with each other.
Note 1: I'm mostly interested in managed FX fund who are trust worthy and professional
Note 2: this is not just a question for me and I'm almost sure that this is the question for every investor

Thanks in advance for your reply

 

[burglar]

Hi everyone ...

Hi Nooob,
Welcome to ASF

I been in this game a long time and I don't even know what a "managed FX fund" is.
What I do know is that I manage my own funds ... I make my own mistakes!!

 

[CanOz]

Hi everyone
I'm a new investor (not a trader yet).
I was busy reading 34 pages of information in the last 10 days (I was completely lost from page 30 to 34).
First of all thanks to everyone who contributed in this subject of helping newbies and I really appreciate your effort.

2nd is that after reading some of the posts about the floats and low quality shares circulating within the managed funds, I start to wonder where can I read the proper reviews on different hedge funds and FX manage funds to make sure that I'm not investing with crooks?

After all investors and traders are all part of the same food chain and we should be able to find a ground to trust and work with each other.
Note 1: I'm mostly interested in managed FX fund who are trust worthy and professional
Note 2: this is not just a question for me and I'm almost sure that this is the question for every investor

Thanks in advance for your reply

You might be interested in these guys....Everbank.

US based, currency account and CDs.

CanOz