trading eminis with cycles

Discussion in 'Technical Analysis' started by tokyotrader, Aug 27, 2005.

  1. nbates

    nbates

    Hi Tokyo,

    I think you're on the right track, but wanted to point-out that "most" trend reversal detection or cycle algorithms seem flawless looking back in time, but fail miserably at exactly the point (time series end-point) where you need to execute trades.

    We can see that in the chart you posted (e.g. all of the early signals look perfect, but the last 4 are 100% out of phase).

    At the end, they're buying the tops and selling the bottom. I've found that there are solutions to this, but they require an extremely high level of sophistication to produce.

    Best Regards,
    Norman Bates
     
    #31     Aug 28, 2005
  2. --------------------------------------------------------------------------------
    Quote from gnome:

    Apparently you never believed the quote, "A wise man learns from the mistakes of others."
    --------------------------------------------------------------------------------

    nono replies:

    --------------------------------------------------------------------------------
    gnome,

    Jack doesn't learn, he only teaches.

    --------------------------------------------------------------------------------


    The set of participants that you two fit into is foreign to me. I don't go to those places.

    Teaching is not possible; it is fraught with understanding. Heirarchies are a myth.

    Instead, I have come to the place where all are peers and there is no peerage.

    Almost all people bring something to the table without exception and there is value, only, in supporting the personal efforts of others. Every person is capable of supporting and allowing others to release uneeded things that consume energy; newfound energy for a person, who is ordinarily at capacity, is what affords growth.

    You guys are stuck and your capacity is exhausted through repition of sophmoric trite nothings. You have never supported the growth of anyone here. I do not teach; I support the growth of others.

    By not being at capacity, I always have energy to put into the well being of others no matter how rough you think I play when I am getting someone to consider releasing themselves from a myth or drama that they havecreated.

    You are in a place where you have reached a limit; it is very tough to get out of the hole you are digging.
     
    #32     Aug 28, 2005
  3. A couple of comments.

    There is a difference in looking at what happened (CERN) and Root and monitoring to make money. So searching is not your forte.

    Wavelets is a response to not doing cycles. Say the cycle boat has been missed. Why go to doing wavelets with periodic finctions; this is a rather crumby way to not succeed.

    You see Gnu is using line segments blah blah... which:

    do not overlap

    have no exponential or periodic powers

    which go macro rather than micro.

    Look back:

    Early 50's took us out of changing gears (GE differential analyzer) to ten turn coeefficient setting (Reeves analogue) and to the Nike I and Ajax using simultaneous quadratics for target and missle concurrent radar tracking(DC amplifiers' circuit capacitors were zero set 48 times a second) to be able to signal exploding the missle when it pierced the aircraft).

    Now you see digital capacity applied to converting non continuous functions into continuous functions and trying to "curve fit" and to not form dynamic regions of high probaility price movement.

    Why draw lines instead of regions that converge on trending paths.

    Another consideration.

    You are using clusters (frequencywise) of elemnts. Notice that most examples out there do not: musical instruments; Moog; mathematical algorithms. All of these avail themselves to the concept of continuation and not arbitrary restarts. The alternative is to not ignore the built in adjustments as you do.

    To repeat:

    Run the first five or six overtones and harmonics of the two musical instruments I mentioned. (Oboe and flute). This will show you the bearing that various aspects of the economic and cultural mileux have on markets. It is not a clustering of frequencies issue.

    Search the Accoustical Cat Gut Society (BTL @ Murray Hill lab) writing on how the components of a natural system affect the system output (what makes a Strad a Strad). the market is a system that marries the diverse economy and financial interests of almost unrelated entities.

    The bad news:

    Fundamentally, you have missed the boat entirely. This is an oboe problem. I am going to respond to a person who perceives this next. Look there for the details.
     
    #33     Aug 28, 2005
  4. I used to tutor Juilliard students in compostion and orchestration (Greenwich, Conn in the 60's).

    Introducing math analysis into why things are the way they are in music is a thing that affords depth of understanding.

    The markets parallel music in the same manner.

    Intruments are made taking into account their performance with other instruments. Often sacrifices are made to the extent that instuments do do survive the musical tests of time.

    A Strad substitute can be constructed once there is an understanding of what is going on. To shift the frequency range and accomplish the same result for a double bass, you have an instrument that is difficult to manage since it is so large compared to the operator.

    Markets are complex as is the oboe (a double reed feeding an variable air column). The fundamental is not the dominant as a consequence.

    Tokyo as we see omitted the market fundamental and clustered frequencies instead of doing the natural thing.

    Orchestras compromise to play in frequencies in the range in which we hear. Why don't we have sound generators in orchestras for the sum and difference frequencies for sounds that we could then hear. Why in our culture do we have notes and scales in lieu of continuums?

    Go to switzerland and spend an evening in a village at the beginning of winter when, annually, the evils are exorcited musically with paraded instruments from the dark ages.

    Birds fly routes where sound senerated by the wind of barimetric origins play on the geololical irregularities of surfaces. They also mind the sound from ocenaic wave and tidal actions. Dropping down 10 octaves is not a big deal and birds do it

    The solid iron central core of the earth only moves faster than the surface movement a few degrees a years. this fundamental contribution to the liquid iron eddies outward from the center solid core contribute more to the magnetic harmonics in the earth field and the ionized electric field belts of the earth cycle with incedent sun's radiation and the earths daily rotation.

    Polar flipping is a long term fundamental and non dominant basic frequency for these things.

    Annual rotation does not dominate either in terms of the base frequency. It does cause the solid core to advance (it does not lag).

    The daily frequency dominates annual rotation and polar flipping.

    We also get to see the effect of a tipped axis.

    Tuck ice ages into the mix as well.

    Tuck in all the natural cycles: hydrologic, carbon, etc...

    For markets, we get to deal with a very nice construct.

    There is a difference, however.

    The two things that form the picture are: our operating point and the kind of cycle involved.

    Our operating frequency is very fast compared to the kinds of cycles that drive culture.

    In culture, the life cycle is the type of cycle that culture enjoins. Things come and go all riding on the fundamental of cultural growth.

    Needs do not change over milleniums but the delivery systems for those needs continue to be implemented by "fixes" that are not durable but have lives that are terminated by better "fixes".

    So there is a foundation and within it there is a vibrance of the give and take of needs delivery systems.

    Inventions like currency and financial markets become institutionalized and they serve science, technology which in turn service the production of goods and services that supply the demand of the delivery systems to meet all cultural needs.

    To make money we chose to extract a stream of capital from the financial markets and currency exchanges. We deal as parasites where exchanges are many at the beginning of the pipeline that makes culture work.

    Most people to not come to this place to operate. There are hundreds of ways to operate and the comparison of performance is made based upon the money velocity capital can create.

    All methods of making money in this venue operate by repeated efforts. This is how we get to considering periodic functions.

    We must team up (be good parasites) with the place we extract capital and operate as effectively and efficiently as possible.

    Ownership, debt, protection, and interchangability are required for continuous operation of means of production. Stocks, etc compromise ownership; debt relates to money as a commodoy which has utility; commodities provide production and debt protection; and money is valued locally and to change localities requires exchange.

    All repeated efforts are driven by opportunity. Opportunity must be found. Many methods and approach seemingly create opportunity. Moreso just a consciousness is being realized.

    Essential elements of the cultural system are tied into its operation and effectiveness. Its ability to adequately function varies and here is where the fundamental movement resides. The veritable hugeness guarantees a natural functioning of this movement.

    Over time it all gets better.

    As an aside, I chose to make money primarily on overrides of moving capital from a poorer use in a given sector to a better use in that sector. The act of creating a unique delivery system has great override value. I build devices that once built require little maintenance and operating costs but they delivery overrides from the flow that goes through them. I mostly widen and speed up conveyor belts.

    The base and fundamental frequency of the place where we operate as parasites is determined by the dynamic of the economic milieu the market we siphon capital out of.

    A trader does not repeat his working cycle at the fundamental frequency of this carrier. By looking at the modular activities of the four elements of ownership, debt, protection, and interchangability, that ride the carrier he sees how their through put energize the dynamic of movement. For example, lagging periodic reports characterize ownership, roll overs prescribe protection, interchangability is almost continuous and appeals to arbitrage primarily. Debt is smeared all over the place in all ways.

    So leveraged derivatives of indicators of quarterly reporting systems of ownership conveniently fall into a parallel relationship with a rollover system.

    A low amplitude long term carrier measures the cultural health of the cultural delivery system. Reporting and rollover periodicities insure a delivery system lagging much much higher amplitude set of signals that bound our repeated enterprised.

    We have the tide and the waves of the surface in place.

    Values are contained within this; they are a consequence of the interactive nature of the cultural system.

    Humans and their judgements have entered the picture. They operate it with knowledge, skills and experience. We are "outsiders"; we do not do this kind of "work" or "walk".

    We do two things: keep track of value as reflected in price and keep track of how much activity is going on.

    Quarterly change is the high amplitude variation that flows on the economic carrier.

    The items of ownership (stocks) behave in relationship to collective representations (indexes) by their relative volatility (Beta). They also behave internally (EPS percentiles) and externally (RS percentile) relative to one another and in common sectors (197).

    Indexes (cash) provide measures of health and commodity indexes provide protection (futures contracts are near term insurance).

    We do not invest in any of these as delivery system workers (time) and owners(capital) do. We just trade them.

    This is the picture of WHAT.

    For making money knowing the WHAT, gets me into the ballpark

    Synopsis of remaining considerations

    If we work from the "opportunity" of how to deal with WHAT. We then have down the HOW and WHEN.

    Before that, I think it is important to know the WHY of opportunity.

    The WHY of the opportunity is where the math sources for making money come from. The channels of the market movement give you the relative frequencies of the periodic elements and relative amplitudes of the these periodic elements. The elements are not lines however. They are bands of price. And high velocity money is made by dealing with how and when to make money in these bands.

    So the intermediate term is where price variation is founded. Application of capital is an issue that sneaks into the picture as well. This is where strategies come from.
     
    #34     Aug 28, 2005
  5. If someone can decipher whatever the hell Jack is talking about, please explain it to me because I'm very interested in cycles as well.
     
    #35     Aug 28, 2005
  6. I'll redo my last post in word as an editied attachment. Sorry.
     
    #36     Aug 28, 2005
  7. Holmes

    Holmes

    It is simple: the tides depend on the phases of the moon. When the tide is low that is not the time to launch / beach your fishing boat. You'll launch / beach the boat when it is high tide, otherwise the shoreline is too far away.

    Launching at high tide has the added benefit that when you have to move towards sea that you will have not to labor into the currents coming into shore. But you cannot wait too long after the high tide to set out to sea because if you do wait then you will not clear the bar. Similarly if you try to come inshore then you will want to wait until the tide is nearly high in order to clear the bar. But you cannot wait too long let's you get caught in the outgoing tide and then you'll finish up beeing shipwrecked on the bar.

    And every now and then the moon and sun line up to give a "spring tide" which means an extra high and extra low tide. Shore dwellers have learned to respect these spring tides as they can breach the dikes and flood the lands protected by these dikes.

    Sailors have learned to respect these spring tides because they'll have to pull their boats up to higher land let's they float away unattended and then leaving them bereft of a means for income. In addition the young sailors who were caught unawares are still trying to mvoe their ships out to sea but find that they are unable to do so due to the incoming currents.

    Ofcourse the flatness of the earth (you know scientists in the middle ages determined that the earth was flat) does not help. Since the earth was determined to be flat there was no need for the DC capability of the oscilloscope any longer and hence came the digital scope which does not display anything that is approaching DC, the lowest that seems to be universally adapted is around 10 cycles per human timeunit (1s).

    This has all to do with the vortex that is created when light bends around a black hole. Although the undisputed proof is still being debated because light moves in a straight line.

    Sherlock


    :cool:
     
    #37     Aug 28, 2005
  8. Holmes

    Holmes


    Jack,

    Yes! Yes! I can see your system clearly now. The way your mind runs it makes it a good system for you! :D

    :cool:
    Sherlock
     
    #38     Aug 28, 2005
  9. Grob's competting for the 500 word essay contest on monday :D

    Good post grob haha


    Cycles, or stochs, or macds, or any type of indicators work,
    what do they work for?

    They work in predicting momentum and price.

    Theres only a few core things in the market,

    Time, Volume, Price.

    You see, Indicators can predict Time, Price, but can they predict volume.

    Indicators can predict Time, Price , but can they predict if the momentum is slightly upwards or downwards.

    You see, The motions in upward movements, unlike most particpants would like you to believe, is different from the motions in downard movements.


    What you need to do, is not just solve the Time and Price,
    But Time, Price, and volume and general movement momentum.

    When you mention only cycles or any indicators, you are missing out important cores that also faciliate to the price movement.

    This being said, I find indicators work great, but it is incomplete in the grand scheme of TRADING.
     
    #39     Aug 29, 2005
  10. Holmes

    Holmes

    I think it was Gann who coined the phrase: "When time and price square then change is inevitable".

    Am finding that with the right indicators price are the only external data that I require.

    :cool:

    Sherlock
     
    #40     Aug 29, 2005