One system for all markets

[swingstar]

Is EW a system or analysis?

What's the definition of a system first?

Swing your a clever young bloke, I've been impressed by some of your past posts, let me warn you " EW may let you down at the worst possable time.

Thanks Bobby, same to you. EW is just one tool I use, and I find it useful for giving me rules to trade by (like a mechanical system--at least for form).

 

[It's Snake Pliskin]

Thanks Bobby, same to you. EW is just one tool I use, and I find it useful for giving me rules to trade by (like a mechanical system--at least for form).

So it is a tool. Thanks.

 

[It's Snake Pliskin]

Of course there is.

Its the consistent application of buying at a price which is either.

(1) Consistently lower than your sell price.

OR

(2) When sold is consistently higher in aggregate point gain than the aggregate point loss of your trading.

OR

(3) Both (1) and (2).

Tech/A,

You are back! Thanks for your answer.

 

[It's Snake Pliskin]

Hi Snake

I think its primarily a mindset thing. Recognising and dispensing with that pervasive, 'getting away with it' attitude (which in itself becomes the game)would be a good start.

Cheers
Happytrader

happytrader,

You always come out with the pertinent stuff in your comments. It is a pleasure reading what you say.

 

[It's Snake Pliskin]

Swing your a clever young bloke, I've been impressed by some of your past posts, let me warn you " EW may let you down at the worst possable time.

Bob.

Hey Bobby,

Have you tried an EW strategy before? If you have why did it let you down? I am curious why it works for some but not for others. Perhaps Happytrader has the answer with his psychology bent lending some insight.

Snake

 

[swingstar]

So it is a tool. Thanks.

Is it not a system in itself? It gives you rules and guidelines to follow. As market activity unfolds, you enter or exit given those rules and guidelines. Because I use it in conjunction with other 'tools', doesn't make it any less of a system. Again it would help if you could define what you mean by a system.

 

[It's Snake Pliskin]

Hi Snake,
If the underlying method to any system is buy low and sell high, cant this work anywhere on any market? as long as its profitable right?

Stink,
I thought the same. Though the liquidity and volatility would be factors of concern.
Snake

 

[It's Snake Pliskin]

Is it not a system in itself? It gives you rules and guidelines to follow. As market activity unfolds, you enter or exit given those rules and guidelines. Because I use it in conjunction with other 'tools', doesn't make it any less of a system. Again it would help if you could define what you mean by a system.

I am not defining a system here, I was hoping we could all do it together. Stink came up with:

Systems are what? peoples opinions on what they think will work, or what they have tested will work.

So you two seem to be thinking along similar lines. As far as EW goes you are far more advanced than me on that "tool, strategy"..

Snake

 

[yogi-in-oz]

I am aware that cycles may make a market untradable for systems at times, but I was talking about markets being markets not what cycles they are in.

Hi Snake,

If some cycles make a market untradable at times,
then the reverse is also true ..... some cycles make
a market tradable, at other times ....

..... that being so, then ALL markets can be evaluated
and TRADED, using a system based on cycles.

For some, their cycles may be based on price movements.

One example being swing trading, around a previously
-identified pivot level, but this approach only uses HALF
of the data available, in the chart of ANY market.

Other traders may add evaluation of the TIME axis on the
chart as well, giving us another dimension to consider.

Both PRICE and TIME data is available for ALL markets,
therefore a simple system combining BOTH axes should
serve us well, when trading most markets.

Gann's work is based on the premise, that ALL markets
have their own individual, cyclical "vibration" ..... if we
can identify the critical triggers in ANY market, then
we will have more than a fair chance of making a profit.

Price-based cycles most commonly have a pivot level
of long-term support and resistance, as a key trigger
for market entries/exits ... for example, AZZ = 73 cents.

Time cycles may be fixed by nature and are easily
identified, giving us some specific dates to watch for
fundamental triggers, like company news (or lack of)

For example, TDR has spiked up over 23% today, with
good volume on no apparent news ..... we have already
identified TDR as a stock to watch closely for news and
a rally next week, so this movement with no news must
be insiders getting set, ahead of an announcement.
(More in TDR thread.)

It matters not, HOW we identify individual market cycles,
but if we combine our analysis of BOTH PRICE and TIME
axes, then we have the basis of a SIMPLE, forward-looking
system, that we can use to plan our anticipated entries
and exits, for ANY market.

happy days

yogi



=====

 

[Bobby]

Hey Bobby,

Have you tried an EW strategy before? If you have why did it let you down? I am curious why it works for some but not for others. Perhaps Happytrader has the answer with his psychology bent lending some insight.

Snake

Greetings Snake,

EW buggered up my mind-set regarding mental stops ~~ Ouch !

Remmember this story :
11th of Sept 2004 the SPI neared 3866, a certain hedge fund called the major wave top at 3866 having shorted 4500 contracts.
Then the bulls had some fun, the best exit offered was 3920 .
They spent the next 2 weeks getting out at a significant loss.

Then again as you said it seems to work for some !

Cheers Bob.

 

[Smurf1976]

Isn't one of the key rules for testing a system that it should work in different markets and times?

For example, you wouldn't develop a stock trading system and only test it using one stock for the past 12 months.

 

[doctorj]

For example, you wouldn't develop a stock trading system and only test it using one stock for the past 12 months.

Depends on the system and the time frame. Why make a system any more generic than you have to. If your trading short time frame, 12 months of data is more than enough.

For example, I know several people that design and trade systems specific to different index futures. If they're only scalping, I imagine you could be reasonably confident testing 12 months data.

 

[Mofra]

Just to clarify - are you including different leveraged instruments as well when you talk about different markets? An equity trader may have the golden strategy but perculiarities to the intruments themselves may render the system ineffective on ETO or futures markets.

 

[It's Snake Pliskin]

Hi Snake,

If some cycles make a market untradable at times,
then the reverse is also true ..... some cycles make
a market tradable, at other times ....

..... that being so, then ALL markets can be evaluated
and TRADED, using a system based on cycles.

For some, their cycles may be based on price movements.

One example being swing trading, around a previously
-identified pivot level, but this approach only uses HALF
of the data available, in the chart of ANY market.

Other traders may add evaluation of the TIME axis on the
chart as well, giving us another dimension to consider.

Both PRICE and TIME data is available for ALL markets,
therefore a simple system combining BOTH axes should
serve us well, when trading most markets.

Gann's work is based on the premise, that ALL markets
have their own individual, cyclical "vibration" ..... if we
can identify the critical triggers in ANY market, then
we will have more than a fair chance of making a profit.

Price-based cycles most commonly have a pivot level
of long-term support and resistance, as a key trigger
for market entries/exits ... for example, AZZ = 73 cents.

Time cycles may be fixed by nature and are easily
identified, giving us some specific dates to watch for
fundamental triggers, like company news (or lack of)

For example, TDR has spiked up over 23% today, with
good volume on no apparent news ..... we have already
identified TDR as a stock to watch closely for news and
a rally next week, so this movement with no news must
be insiders getting set, ahead of an announcement.
(More in TDR thread.)

It matters not, HOW we identify individual market cycles,
but if we combine our analysis of BOTH PRICE and TIME
axes, then we have the basis of a SIMPLE, forward-looking
system, that we can use to plan our anticipated entries
and exits, for ANY market.
happy days

yogi



=====

Thankyou Yogi for your response in your unique style. Your last paragraph which I coloured in in Purple says a lot.

Snake

 

[It's Snake Pliskin]

Greetings Snake,

EW buggered up my mind-set regarding mental stops ~~ Ouch !

Remmember this story :
11th of Sept 2004 the SPI neared 3866, a certain hedge fund called the major wave top at 3866 having shorted 4500 contracts.
Then the bulls had some fun, the best exit offered was 3920 .
They spent the next 2 weeks getting out at a significant loss.

Then again as you said it seems to work for some !

Cheers Bob.

Understood Bobby.

 

[It's Snake Pliskin]

Just to clarify - are you including different leveraged instruments as well when you talk about different markets? An equity trader may have the golden strategy but perculiarities to the intruments themselves may render the system ineffective on ETO or futures markets.

Yes. All markets and instruments that provide price or charts to read.

 

[Bobby]

Thankyou Yogi for your response in your unique style. Your last paragraph which I coloured in in Purple says a lot.

Snake

Yes Snake, Yogi is a bit odd, check this out from the Sydney Morning Herald back on the 8th Jan 2005 !

On Wed 5th Jan 2005 - About day trading, a American professor of charting said :

The magnitudes & decay pattern of the first 12 auto-correlations & the statistical significance of the box -auto-correlations & the statistical significance of the Box-Pierce Q-Statistic suggest the presence of a high-frequency predictable component in stock returns .

Means the past is a guide to the future


Someone called Yogi then said :
Contary to every warning that appears on every share price or unit trust recommendation I back-tested the professor's study on 750 stocksover the past 50 years.
This is the result ~

Now if this is ASF Yogi, he will be able to fill in the test results.

Have Fun
Bob.

 

[It's Snake Pliskin]

Yes Snake, Yogi is a bit odd, check this out from the Sydney Morning Herald back on the 8th Jan 2005 !

On Wed 5th Jan 2005 - About day trading, a American professor of charting said :

The magnitudes & decay pattern of the first 12 auto-correlations & the statistical significance of the box -auto-correlations & the statistical significance of the Box-Pierce Q-Statistic suggest the presence of a high-frequency predictable component in stock returns .

Means the past is a guide to the future


Someone called Yogi then said :
Contary to every warning that appears on every share price or unit trust recommendation I back-tested the professor's study on 750 stocksover the past 50 years.
This is the result ~

Now if this is ASF Yogi, he will be able to fill in the test results.

Have Fun
Bob.

Bob,

Do you have access to the article online?

 

[Bobby]

Bob,

Do you have access to the article online?

Yep,

I'll PM you it.

Hope your having fun.

Bob

 

[It's Snake Pliskin]

Yep,

I'll PM you it.

Hope your having fun.

Bob

Bob,

I got your PM and will check it out.
You must be tired because I am with a two hour time difference.
Snake