Something doesn't sound right, you better run the tests again. I will be looking for the results in 2012
Its funny that after 18 pages of post, TFTrader only appears once. Personally, I have been trying to figure you all out, trying to classify you as; 1) Gas - full of hot air - have no idea what you are talking about 2) Fluid - Intelligent approach to trading, still learning the game 3) Solid - Figured it out, working profitable system, still adaptive, still enters the fluid state from time to time.
You asked about the three indicator defaults. after the PC came into existance and then after real time data became electronic, the designer defaults became extinct. the phenomena most apparent was the "bridging" of cycles. think of it a a long canoe that is longer than the waves of the ocean it is sailing across. A nice thing for travelers but a handicap for indicator users and testers. Two line indicators came from diverse designers. They did see the advantage of two lines, however. To check out the proper defaults, you test on all nested fractals. A PA trader cannot do this since he cannot nest fractals in the first place. He is probably just an edge trader anyway. A default test reveals that the indicator works on all fractals and there is no bridging on any fractal. This is the JoePaterno reality check so to speak. It is not if the trader can read this; it is if the trader can do the default test on nested fractals. The next effort is to get the "signals" of the two line indicator understood. MACD and stochastics are mathematical names. The key words are divergence, convergence and stochastics. They all apply to the relationship of the two lines. The scaling of the line values is less important than the relatiionship of the two lines. We saw by the default testing on the nested fractals that the P, V relationship was honored and we were in the groove. Using PA only is like cutting off one leg of a pair of pants. Your balls hang out when you mouth is open. (Goggle JoePaterno). How many cases are considered for the two line relationship? As in any design and development problem; you strive for optimum utility. You cannot define any of the properties of the key words without two points on the market variable continuum. The Nike I and Nike Ajax were guided missile systems. Antennas tracked the target and the missile. A common solution was sought for the two paths. Pairs of dimensions were used for the three dimensions of each and more than two points in time were considered. The missile ignition was radioed to the missile at the appropriate time. A two line solution for three indicators gives the trader a feeling of confidence. because of the slow timing of carving profitable turns, any trader can just use his mind to keep track of the "ignition " time. (See videos). Now computers have advanced enough to keep pace with provided data. So the two line indicators, in combination paint a multidimensional picture of the markets. As in the Nike problem, a three point maths solution for each of two paths was handy. quadratics were used for the pairs of spatial variables. An analog solution was had by using 81 DC amplifiers that were zero set 48 times a second. So three points in time suffice to show the two lines on each indicator. For each indicator only six alternative triad cases have to be considered when the first element is limited to D or C. always the middle of the triad is NOT D or C. A commonly used triad is CXD which is the two line crossover and is a lagging signal. Lagging signals are not useful so only leading signals are used for trading to carve the turns. Most traders do not advance in skills. As a consequence, there is no effectiveness nor efficiency among these folks who have cut off one pants leg for the most part. As you see the triads always overlap. And the leading term is always alternating as well. There are no surprises for staying in the market all the time and being on the correct side of the market. I may be termed to be a student of the markets. Anyone can be. By looking at the two line indicators, you step into a new world. Then you make something of it. Ultimately the markets become very clear in their operations. Once you recognize the size of the huge pools and that all the time the market is offering; then you conclude life style considerations are very small in comparison to the pools. I conclude the financial industry is very low class and mostly ignorant as a herd. Their regulation is grotesque. And the world has problems. The match being made is to connect problem solvers to the extracting of the capital in the huge pools. Luckily, none of this extraction is regulated nor understood by most. The theme of this thread is that trading is not a business. For me trading is one terrific and continuous capital transfer OUT of the financial industry and INTO the sprited problem solvers of the world. I love to see the dunces of ET do what they do here. It is the most magic filter of them all. I remember long ago participatin in shutting down a reactor at Penn State and converting it into an icthiology (sp) lab. They learned to grow fish vertically at Penn State.
Thank you for the response Jack Hershey. I was not prepared for the depth of your explanation. I was able to Google you and found some earlier posted work that puts a lot of what you have accomplished into perspective. I donât have your depth of mathematical knowledge â I do have some other interesting talents however. I have read your post several times now, and it does make since to me - actually enlightening - insights I have not considered. Alas, the proof is in my ability to codify it â and profit from it â this may take me a several months. Thanks again.
I just do some piecewise linear approximations of the trends that happen all day and add in approximation of the volatility accompanying the trend with another linear approximation[E-minis]. Piecewise linear approximation is an old engineering solution from the days of slide rules and charts.... Typically price goes the easiest direction and reverses when it gets to an area that is cause for concern for the most traders of the underlying issues. That is the only part of the day that is based on any kind of statistics and it's empirically derived anyhow.... It's not too complicated, just a little hard to automate and I hate sitting and watching the screen all day... I got a laptop with wifi though, can sit at the Coffee Shop and harass my fav waitresses.