Why did your indicator logic on ScottD's thread fail to produce sustained positive results ? Hershey trading logic put to the test: http://www.elitetrader.com/vb/showthread.php?s=&threadid=147441&perpage=6&pagenumber=1 Fail
This is false. The whole point of a trading system is to predict what will happen next. If the system is incapable of doing so, at least in a probabilistic way that differentiates expected behavior from randomness, then the system has no edge and will lose money in the long run Intuition is a funny thing. Beginning traders all think they have it, but in reality they have anti-intuition that actively mis-predicts market behavior, and as a result they consistently lose more than commissions. These losses provide the money inflow that fuels the whole system. Certain experienced traders do have functioning intuition, but most of them got it by virtue of much more dedicated study. It's also my experience that any traders who do have good intuition about the markets figured out how to make a profit as a trader before that intuition was developed. In other words, intuition is an unnecessary sidelight to trading.
There is an exchange in Rounders which I feel is relevant: Mike McD: "I'm gonna call you or else I won't respect myself tomorrow morning." Teddy KGB: "Respect is all you have left in the morning." In trading, intuition is all you have left in the morning. All the best traders keep it simple and go with their instinct. At the end of the trading is very simple: stocks go up, stocks go down, stocks stay in range. Using your amassed knowledge you make an educated guess on what will happen. I also think intuition is another way of saying tape reading.
Uh oh, horrible Rounders quote alert If you recall, Mike flopped the nuts, and that was all an act. He was imitating the sentiments of a sucker. In cards, as with the market, things are not always as the appear
By the time May rolled around we had our ideas collected. The logic sheet posted at the beginning of the thread did enable us to lay a foundation that was good. Each version had some refinements of the basic core first shown. As those observers who code could figure out, the EOB aspect was a good starting point. We were very fortunate to be able to put in place the first level of filtering as well; no one picked up on that, however. Scott is a champion and he followed the programming standard of not moving on until, at a given level, all problems were solved. The standard for programmers is to have positive results in order to expend more time. The chart he tested me with was a real draw for me. I felt he had terrific insight on how to get an initial fair evaluation of the potential for using indicators on markets. I particularly enjoyed how the project started and continued. In trading, as in coding, there is a crossover point where the profits made far outweigh the costs of modelling, developing and coding an ATS. As has been pointed out, there are many many refined methods of trading successfully using an ATS connected to a platform. We used a good set of values for costs and slippage on the core versions. If you look at the Sweeps Chart's nine tables, we got part of the Coarse sweeping done. The Tucson crew did a four aspect documentation effort and we worked on a core and three shells. Our Excel support aspect was supported by logic sheets, chart snagits, and text using dragon 9. The core was about 600 lines in Excel. Each shell was larger than the prior and the first shell's completed document was over 120 pages. We did not submit it because the core did not produce positive results and that was deemed to be a requirement for moving forward. All shells were fleshed out, in terms of logic, filtering and gating. The posted results from Scott are very accurate. He is very skilled and does super testing of data. He also provided terrific data and information for us to work with in Tucson. The core used scalar data values exclusively. All shells would have used binary vector values from indicators only. We all took very seriously the specified limitations on using only the information in the chart he used to test me. The core filter(s) he coded were really terrific. There was no way, on that level, we could overcome EOB relative indicator values as compared to individual bar price volatility ranges (which we could not employ). All shells eliminated this problem when used manually with intrabar indicator data. So as you say the logic was a failure for the later core versions; the initial versions were profitable. Using the platform we worked on, was terrific; I have it running on the ES daily. All of the panes for the indicators have lites operating as well (31). What I do manually, is use them as desired. Primarily I use volume leading price in one pattern on nested fractals. None of this has to do with indicators. Over 5500 people looked at Scott's test chart. A lot looked at my post of the trades and many looked at Scott's super-position of the trades on Scott's answer sheet. We all worked hard together and everyone learned something. Obviously, reading indicators is like tape reading and it lets a person call the profit segments at at least the level of the ATR. ET, by enlarge, feels that the thread was a failure.
exactly!...predict. So what's your arguement? NO SYSTEM knows for 100% what will happen next. Yes a system should be built off good % chance of success, but the trader needs to have the intuition to know what trades to take that the system gives him.
Mynd - If you want to learn about intuition in trading - look up Eugene Gendlin's book - focusing Also look up Flavia Cymbalista - She has studied traders and developed the focusing work by Gendlin to be more effective for traders to develop new innovative trading strategies and trading intution. PM me for PDF / Audio links
No they weren't. Your "cash cow" (what a joke) wasn't profitable and ScottD hasn't posted since May... The bottom line of that whole thread is at the last post, here: http://www.elitetrader.com/vb/showthread.php?s=&postid=2438060#post2438060