people on this forum were rude and are fake traders

How do you know when a trend has started? Ended? This forum is for discussions about trend indicators and signals.
CrAcKhOuR
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people on this forum were rude and are fake traders

Post by CrAcKhOuR » Wed May 10, 2006 9:11 pm

11111111111111111111111111111111111
Last edited by CrAcKhOuR on Thu Oct 02, 2008 5:23 am, edited 3 times in total.

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Post by AFJ Garner » Thu May 11, 2006 4:59 am

Are you about to hit us with a sales pitch for something at some stage? Just out of interest?

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fake

Post by CrAcKhOuR » Thu May 11, 2006 6:16 am

fake
Last edited by CrAcKhOuR on Thu Oct 02, 2008 5:24 am, edited 2 times in total.

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Post by AFJ Garner » Thu May 11, 2006 6:24 am

Ah, good man. Thank god for that, and welcome. Switzerland is just fabulous: the mountain flowers are out in the meadows and snow is still adorning the mountain tops. Hardy youths are still putting on their skins and shinning up to the peaks and skiing down again. Sadly I'm not among them........must be getting old.

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Post by jankiraly » Thu May 11, 2006 9:59 am

| CrAcKhOuR | wrote: No I provided a simple method of trading as
there is not many references to charts on the forum

The reason is found at the top right of your screen. I have trimmed
it to show the most relevant portion, in the image which follows.
Attachments
mech.gif
mech.gif (2.47 KiB) Viewed 18713 times

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Post by Forum Mgmnt » Thu May 11, 2006 10:22 am

Yes, most of us have come to the conclusion that if we have some specific understanding of what it is that we do to make money then we can describe that in terms of algorithms that we can specifically define.

If we are sufficiently skilled and have the appropriate tools we can run simulations or "what if" scenarios to determine if our algorithms or systems would have made money in the past.

There are certainly many traders, perhaps most, that don't subscribe to the theory that one can systematize trading or that past analysis (i.e. back testing) is useful. Almost without exception, the traders here believe in historical testing and verification rather than subjective guessing or feelings as the basis for our trades.

The interpretation of charts is very subjective. For this reason you won't see many references to charts per-se but rather to algorithmic descriptions of patterns and such that might appear on charts but that could be tested using software.

In your case, in another post (...if a Line on Your Chart has been Broken) you've noted something I found interesting and specific enough that it could be interpreted by a computer using back-testing software. Specifically, that a bar that penetrates a moving average to the extent that the entire bars range is over or under the moving average is significant.

The general approach here among the users of this forum might be to try to run some tests comparing the results of trades with entries with this rule against a control group where perhaps just the bar close crosses the moving average. In this way, we'd place some statistical significance on the rule if the results change measurably for the better.

Your rule is interesting enough that I will try to test it using daily data and using intraday data in the near future when I have a chance.

- Forum Mgmnt

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Post by CrAcKhOuR » Thu May 11, 2006 1:21 pm

Hey Forum Mgmnt,
I have read about how two mechanical systems, using the same selection criterior, starting on different dates can produce opposite results..How can this be?
How, for example, does one know if the mechanical system is performing poorly, or if market conditions have changed?

What if the system just stops working (bombs?). Does it not mean that the trader plays an emotional role at some point, even if it's just to stop using the mechanical system,
or say, to modify it when it's performing badly?
I cant help feeling that it's like studying the previous years weather forcast, to try to predict if it will rain next week...I would be inclined to check the weather report, and maybe even stick my head out of the window, before donning my short trousers!

I do however, try to keep my trades as objective as possible and feel the method I've illustrated IS somewhat mechanical, (as in, the system would go long/short when sufficient criterior are met) , and is usually above/below the moving average with RSI often eliminating whipsaws.

The difference is of course, Im using the computer perched on my shoulders to make buy/sell decisions, therefore, the only feelings I need consider is wether the market has given its verdict , and if the line been broken....

In conclusion, Im very sceptical of sampling too far back and trying to attain too much precision, except for historical support/resistance levels, However, I fully respect your methods, and your performance reputation, though with respect , I would be very grateful if you will explain from my chart example, where I was subjectively 'guessing' , as I feel this may have been a tad harsh?
Many Thanks..
Last edited by CrAcKhOuR on Sat May 13, 2006 1:05 pm, edited 1 time in total.

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Post by RedRock » Thu May 11, 2006 1:45 pm

| CrAcKhOuR | wrote:pling too far back and trying to attain too much precision, except for historical support/resistance levels, However, I fully respect your methods, and your performance reputation, though with respect , I would be very grateful if you will explain from my chart example, where I was subjectively 'guessing' , as I feel this may have been a tad harsh? Many Thanks..
Join us next week when our hero faces...Intuition vs intuwishing or.... The case of the well chosen example.

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Post by zz double » Thu May 11, 2006 2:06 pm

c.f. Wrote:

"Almost without exception, the traders here believe in historical testing and verification rather than subjective guessing or feelings as the basis for our trades."

The subjective guessing and feelings that c.f. mentions are what keeps most traders from being profitable. In the end they are too lazy to test if an idea works consistently and therefore will add value to their trading.

I should know, its cost me money in the past.

Test, Test and test again. Then apply strict discipline to all aspects of your trading.

Just needed to get that off my chest: :!:

ZZ

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Post by Forum Mgmnt » Thu May 11, 2006 2:26 pm

I wasn't trying to be harsh or to imply that you were guessing only that charts and chart formations are fuzzier than specific rules that can be described in language.

You probably have some very specific rules in mind when you described your ideas above. What I see is a chart with a bunch of lines and several places with buys and sells circled. It may be unfair but this says to me quite loudly "here lies subjectivity and fuzziness".

A couple of other minor things:

1) The name "| CrAcKhOuR |", especially with the difficult capitalization to me implies that you are irreverent and relatively young, I'd say 22 to 24 tops. The name alone might cause some to disregard your posts since some don't believe there is much to be learned from the youth. I hope I don't succumb to this generalization but I'm sure I do to some extent. Intellectually, I value irreverence so please don't take this as an insult as I don't intend it as such.

The name also visually looks a lot like the names we get from spammers who come here and try and sell pirated trading software etc.

Just something to keep in mind when you are communicating in a medium with as much information loss as an online forum.


2) The amount of posts you have made thusfar indicates to me that you believe you have something to add to this forum. My initial impression is that you very will might.

However, there have been many in the past who have started out with a flurry of posts without having bothered to read the many threads that covered similar topics or without having spent a few days or weeks reading the body of information provided by many of the experienced traders that post here from time to time.

So I encourage you to read what has been posted before to the extent possible and to keep one or two threads going rather than to create new ones.

3) Upon reading your initial paragraph several times, it is not apparent to me what your rule for exiting really is. This is probably because of your rather long paragraph. I find it easier to read posts where separate thoughts are separated into paragraphs. With your paragraph, I give up before really understanding it. I'm sure I'm not the only one who does this, and I'm pretty good at understanding complex ideas.

I find that paragraphs like the one you started this thread with are indicative of rushing and someone who is a relatively younger poster. I find that my own posts benefit from my pressing the preview button, rereading them several times to make sure I am making my points very clear. I believe that you and the rest of the forum members would benefit by your spending more time thinking about how to clearly describe your concepts so we can more clearly respond to their merit.

Those of us who have to program our rules into computer code of some kind are keenly aware of the difficulty of describing trading rules with suffiicent precision.

4) The forum software doesn't do a good job with wide graphs as they cause the postings to word wrap as wide as the graph itself which makes it hard to read. So please try and make the graphic file narrower as this won' t affect the text of the posts so much.

5) Finally, Redrock alludes to the real problem with graphs as compared to computer simulations. The human mind is very good at finding examples which support its existing belief system and very bad at finding ones that don't. A simulation, on the other hand, doesn't care. It will find the examples that lose just as readily as the ones that win.

So, please keep posting, but please also try to accomodate those of us who are busy and easily confused by helping us more easily see the specific rules behind your concepts.

Something of the form:

1) 5 bar MA crosses over the 12 bar MA
2) new bars low is greater than the 5 bar MA

etc. might make it easier for me to understand.

- Forum Mgmnt

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Post by AFJ Garner » Thu May 11, 2006 3:44 pm

c.f.' post is helpful. I could not fathom the intent either and as to the complexity of the chart ...............

Perhaps it was the enormity of the chart which made me think a sales pitch was coming.

Not to be rude, but I did find the post a little garbled and confusing and thus passed on, tossing out a quip before I went.

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Post by Old European » Thu May 11, 2006 4:28 pm

Forum Mgmnt,

Why don't you post your above contribution to this thread also in the 'How to Use these Forums - REQUIRED READING' section of the forum?

Cheers,

Old European

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Post by CrAcKhOuR » Thu May 11, 2006 5:52 pm

Hi'ya Again folks..
Thanks for your comments.. After looking over my posts again I will concede to having being a little garbled , And for which I appologise...
I assure you though that my intents are completely innocent and just. May also say that I've been using charting since last year and I regularly make 1000%+,
Which am very proud of as I am self taught . anyway, sorry for being noisy..
Last edited by CrAcKhOuR on Sat May 13, 2006 1:08 pm, edited 1 time in total.

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Post by zz double » Fri May 12, 2006 9:52 am

1000+% wow! The Cohen's, Soros' and Buffet's of this world have some stiff competition by the sounds of it.

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Post by AFJ Garner » Fri May 12, 2006 10:01 am

Tee hee, yes indeed. Bruce Kovner's Caxton is up 12% this year and Moore Global/Fixed Income 5% each. And I was quite pleased with that.

That'll teach me to do my homework.

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Are we speaking the same lingo here?

Post by CrAcKhOuR » Fri May 12, 2006 3:15 pm

Yeah, it accually is the truth, though im refering to options and spread betting where it is quite commonplace to run £400.00 into £4000.00. This is due to heavy gearing..
I wasnt trying to compare this to the annual returns of George Soros or Warren Buffet.. DO you guys understand gearing?? I think you should before judging and exposing
yourselves...Heh Heh Hmm..

P.S 'Tee Hee' Sounds like walter from the beano!
Last edited by CrAcKhOuR on Sat May 13, 2006 1:09 pm, edited 1 time in total.

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Post by AFJ Garner » Fri May 12, 2006 3:57 pm

Yes, yes, I shouldn't have been mean. But look my friend, there are quite a few of us on this forum who have been speculating in financial markets for a long time.

And gearing is something we have all used for many, many years in differing ways and which we all realise is a double edged sword.

The real point is repeatability and scale and managing risk. Can you consistently over many years make more than you lose. Can you survive and not get wiped out.

You may be a genius with a real gift for trading and interpreting charts. You may be the next Kovner, Soros, Tudor Jones or whatever. Who knows?

But what is, I fear, certain, is that you will not be able to grow your capital each day or month or year or perhaps even every decade by 1,000%. Indeed, to grow a stake of $1,000 into $11,000 over ten years (1000%) would give a CAGR of 27%. I am not sure there is any manager out there that has managed that? Or precious few.

So look, take it from an old lag who has been around the investment banking scene for quite a while. It is great to be enthusiastic and bold and youthful and entrepreneurial.

But you would be a rare bird indeed if you regularly and repeatedly manage to make 1000% on a trade. And don’t forget gearing works both ways.

Hum. No offence meant.

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Post by AFJ Garner » Fri May 12, 2006 4:24 pm

Actually, while I'm at it I'll give you a real life example of the dangers of gearing and over enthusiasm.

In the 90’s I ran (with some colleagues) around 20 traders whose job it was to hoover up deals of all shapes and sizes. We played junk bonds, sovereign debt, convertible bonds, equities from all over the world. Secondary offerings, IPOs whatever. If there was a buck to be made we played. Egypt, Turkey, the US, Japan - wherever.

It was easy to get overconfident. There was a younger trader we financed who always rather fancied himself as James Bond. But he always wanted to overreach himself. Markets were looking wonky - must have been in the lead up to the 1998 crisis I think. Anyway, we told people not to touch the Far East or emerging markets. To stick to the bread and butter stuff - the US IPOs.

But sure enough tough guy ignores us and indicates interest in a Far Eastern deal led by CL Laing & Cruickshank. US$ 5m worth. And he had rather less than that in his trading account. Anway the deal comes, the crisis worsens and he gets a big fill. And he loses $800,000.

Anyway, you will see from Aesop's little fable above that gearing has not just been discovered and that it comes with both advantages and disadvantages.

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Post by Forum Mgmnt » Fri May 12, 2006 5:11 pm

Uhm, don't you Brits mean "leverage"? :wink:

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Post by AFJ Garner » Fri May 12, 2006 5:28 pm

James Bond agreed to buy USD 5,000,000 worth of stock when his net worth was a small fraction of that. As financiers, in the normal course of events, we would have lent the amount to take the stock............had he been authorised to take the trade.

It is not unlike a futures trader who has $100,000 in his account but takes on futures contracts with a far greater contract value. Using $100,000 as margin to take contracts with a value of $2,000,000. With leverage of 10 to 20 times in futures contracts that is not unlike the sort of risk James Bond was taking.

What we mean by leverage or gearing tends to mean the same. Using some given amount of money and then greatly increasing one's exposure. In this case James Bond's gearing was achieved by the fact that a lead manager was willing to take an order without knowing the client's worth. That's how flippers operate.

Call it what you will..............it ain't fun when it goes wrong. Borrowing, gearing, leverage...........whatever, as they say.

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