Jack, Thanks a million for being generous with your knowledge (and providing the spreadsheet). It is clear that you have found keys to profiting from price moves in capital markets. I am studying your method and reviewing your posts. I believe your methodology is logical and sound, and more importantly, it makes money. Thanks again!
I came up with a couple of question for you. 1. In your counting cycle you get a number for accumulation or distribution. How are you defining or determining which is which? I remember seeing your graph of this 8 point cycle and wondered how you can get increasing price, increasing volume, but classify it as distribution. So can you explain how you classify A/D? 2. The other question was about how you are calculating your DU volume. It sounds like you look at the first couple of hours to get your volume calculations. Is this 65 day MA of volume calculated and compared only to the volume in first couple hours of each day or compared to the 65 MA of volume for the entire day? So after 2 hours into the day are you looking to see if the FRV BO is higher compared to the DU volume for the past 65 days 2 hrs into the morning or higher then the past 65 days total volume for the day. Hopefully what I wrote made some sense.
I commented within the quote. See the ***'s. nice open today. I'll use HOV as an example. It just passed Mr Market's target for 4 to 6 weeks out this am and we are now most of the way through the short term cycle I use.
What a crock of shit!!! NOW that HOV has passed NFI you are a stock picker again.......This was my original point: You never took a side or position to the NFI....You never gave a prediction on it, all you did was criticize and show your charts...whoop de doo!!! I'll give you credit on HOV, but truthfully, almost any Homebuilder is a good play right now....the difference is MR Market actually GAVE a target...you are still not giving targets,....you are just waiting until after the fact and then saying " i told you so"
I'm out of HOV. I use a MACD peaking and "away" and x over on declining volume. I went out at the 5 min interval where the VDU occurred. The VDU means that no one agrees on the price. This extreme decline in volume is a flaw. what gave us the gap today was a lot of opening volume which just ate through a lot of "target type asks". I don't focus on specific targets but the 59 plus was a good return. The money velocity is gone by this point as it is post peak. There are values I get from analysis. All of the volume values are EOD values. I look at a 6 months graph and pick off the three values. DU, FRV and peaking. There will be at least five profit cycles in each 6 month period. If the stock has moved it's operating point vis a vis volume I use the current set. I am used to entering in a time slot after volume takes off (leading indicator) and before price moves (anticipated indicator). I believe the market has three parts to it daily. Therefore, I usually take action in the first period. Years ago I posted four emails to seven groups of folks. One before open, one at sync (15 mins into day), and two more during the first 1 1/2 hours. They were forwarded to others on at least 4 levels I know of. Executives of many corps say they got them. In those posts were all the numbers for several lists: potential sell, hold, and potential buys. This was before q charts etc. So you see that I monitor and I calculate the pro rata volume of the values I have chosen. Now adays they have 65 day averages and an "unusual" column on the software so I just look at the quote sheet and relax. You can see the market myths still in place. High rising volume is called "unusual" by the people who run this software stuff. They are macro types and they have a standard related to the indexes annually. To make a lot of money in short times you have to actually be unusual. when you start getting insider trading citations from the SEC you fit into the wierd and unusual category. I do not mind this because I can straighten them out if they cite me. The software people will not be able to support making money becasue they are serving the masses who do not make money especially. If you look at the knot head responses to my posts, you will see how tied to whatever some people get. They are "stuck". This mental condition has a lot of emotion associated with it as well. It is qite strange that people are unwilling to think about making money. They have fixations about it. By watching the simple acceleration of volume to 3 to0 4 times yesterday's values (DU) you get to see a pending event in price. Because there are market tools for entry, you do not even have to bet on the direction of the trend. further you can eliminate the risk of being taken into a "failure to BO" by offsetting your entry tools. We do want to enter late anyway to just have high money velocity Holds. So your comments are focussed and you understand what I am suggesting. There are now software conveniences too. I just do a pro rata thing with respect to three volume values and it gives me ahn anticipatory method that makes at least 10% every 6 to 8 days. HOV was 4 days and I am moving on. thanks for thinking about this stuff. Your comments and questions certainly must help others who can't understand what I suggest. It's definitely a win win for me.
My position on NFI was that it was not a buy long, a sell short. and that is was in an inverted saucer formation. I do not predict as a part of my approach to being rich. I showed you chart after chart after chart. I think of this a drawing a picture for you. I was unsuccessful. Mr Market gave a target. I do not give targets. I just exited HOV at the target Mr Market set. I suggested that he swap into HOV from NFI. Actually I suggested HOV to make the swap possible and keep it simple stupid. MR Market may or may not have swapped; he likes the Armenians in HOV which is part of his fundamental analysis criteria. I'm not an "I told you so " type person. Mr Market and I are making money as we see fit. He makes about 8% a year it looks like. You dig what he does. You will get to the point where you can do as well as he and "beat" the indexes. Your original point was whatever. You chose a stupid point to make. It is your point and you look sort of stupid as usual. Annualize some stuff and see what is what. MR Market says 15% every 4 to 6 weeks. Mr Market's record as determined by others based up on his method if done as he suggests is about 8 % plus. I suggest to people to do "natural" short term cycles. take 6 to 8 days to make half the potential (half is 10%). Do 50 cycles every 3 years. Your current ROI is a sideline produced value. All you do is make stupid points for us to learn more about you. So far you have made no money by your actions related to trading/investing. There is no need for you to change what you do. We all need a variety of examples of how peeople think and feel. I hope what I am saying here sounds condescending. By placing yourself beneath me, you get the consequences of your actions. If you were an ostrich, you wouldn't even need sand to protect your head. Here is picture 1 of what it is all about.
******************************************* Jack Hershey; Good volume on this letter, interesting that you mentioned moving -average-convergence-divergence. You may be right about Ed not using moving averages now ;Ed Seykota does [ In Jack Schwager interview and more in '' Trading Tribe '' writing] have a pattern of mentioning them in 2003 also. Nice ,precise, improvement of William O Neill volume studies Jack. Another advantageof selling a bit early is you may get a better [positive slippage] fill. I tend to take profits a bit early in downtrends; probably take profits a bit late in uptrends, with lots and lots of due diligence. Obvious to me Ed Seykota works a lot or has worked much in the past, or both , painting pictures like ''pride is a great banana peel'' Back to the UPtrends,watching out for banana peel.
Well, since May we had 18 pages of posts on this thread, and obviously the "data" shows that this topic was a popular one. With that said, no one, Jack Hershey included, has convinced me that Ed is ** NOT ** using MA's to identify trends. Jack mentions how Ed went to MIT and I believe Jack points out that he also went to MIT.....not sure why we need to know this, Jack are you leading me to believe that you are a Seykota II or what? Again, in Tharps book, Trade your Way to Financial Freedom, he (in plain english) states that Ed used to teach a college course in which he taught trading using 10 and 20 day Moving Averages. In addition, most of us have here have some familiarity with Ed's bio data. Ed was a large fan of Richard Donchian, arguably the "father" of trend following. Observe that Donchian used breakouts and Moving Averages, and basically introduced those ideas into the world. Someone posted that "MAs could not explain Ed's success." Well, at least on the internet, the most common example of Ed's success (and no argument, definitely an accomplishment), was turning $5000 into $15 million over 12 years. So I ask, WHY NOT would MA's explain his success? If you take $10,000 in year one, and (using long and short) double it every year, with pyramiding, you will have $1.2 million+ in 8 years. Obviously with stocks, currencies, futures, the margin and other parameters vary, but you see my point. Could someone not (again, using long and short trading) double their money once a year? With MA's? Why NOT? I do agree with the observation that Ed uses cycle analysis and other tools. Someone mentioned Ed is "clearly using" more advanced stuff? Well, where do you get that idea? WHY do you think he DOES NOT use MAs? On his own site, and on other sites, all I repeatedly observe are "keep it simple", "follow the trend", "dont try to figure it out", "relax", etc, etc, ad nauseum. This does not follow the idea that Ed is using 3-D modeling (!!!), electrical current flow patterns, nuclear engineering, fractals, jet fuel, or any other wild ideas as a trading system. I suppose my end summary is to say that I am still convinced that MA's work as a simple and damn decent way to trend follow, even in 2003, and I think Ed uses them also (again likely with other tools) take care everyone Bill
Sorry I mislead you. I'm an EE (1955) also and so are Soros and Ed. After EE I studied Theoretical Physics and I halve a MS in Technical Writing, minor EE. I did not attend MIT; I went to RPI. I am just an amateur investor since 1957. It is true that I have lectured at MIT, in several departments; a while back my wife was the Ida Green Scholar one year. It is common for EE's to look at stuff from a viewpoint like Ed has. You will find that Ed does stuff with people at the level they are at. The MA stuff is probably understandable to BA's etc. MA's have intrinsic problems that would drive any EE away from them. The market is periodic and EE's have one heck of a lot of knowledge about that stuff especially as it relates to communications and analysis and bandwidth. Where you are is neat for you. 18 pages of ET count a lot for you; I will watch your posts to learn what I can from you.
well, that is great but I am yet to read reasons, articulated facts, as to WHY, HOW, etc. "MA's have intrinsic problems that would drive any EE away from them. The market is periodic and EE's have one heck of a lot of knowledge about that stuff especially as it relates to communications and analysis and bandwidth" 1. what are the problems? 2. One heck of a lot of knowledge? Uh, please articulate your reasons, facts. I am not sure what a heck of a lot of knowledge is, but with extensive creds, I am quite confident you can further articulate this beyond "heck of a lot" 3. Communications, analysis, bandwith? "Especially how it relates to....." (!!???!!) are we talking about high speed internet or trend following I am interested in your "how it relates to" explanation