Finally a little bounce?Originally Posted by nickola.pazderic
Finally a little bounce?
Hi Pascal, Billy, and all Trading Wizards,
Do you'all put any stock in magical Fibonacci retracements:
People are noticing the break of the 50% retracement here on the SPY.
GGT Forum Manager
Absolutely. Not so much in market mechanics, but because people believe and code their systems to the Fib numbers.
This is why you see GGT MAs of 2,3,5,8,13,21,34,55...
As an aside, I note that the SPY finished below the YPP and that IWM finished below SS3, with the Q's significantly below QPP and SS1. These are now significant resistance levels....
Make it a great Thanksgiving all.
Regards,
pgd
Paul,
Wonderful analysis; now tell me what to do! :)
Prior to the close today, I bailed out of TNA and jumped into TZA. Sold the TZA 2 minutes before the close. This is the only advantage of watching the soap opera, called the stock market: one can reverse course at an obvious inflection point.
But Trev-- are you out there?-- the Jesse Livermore rule about not wasting time during times like these sure proved correct.
Peace all,
Hi Nickola,
Yes, the best place to be just now is out of the market. We have not had success on the short side but we have also not lost anything on the long side. We are in an even better position than Jesse was in that we have the Robot to guide us unemotionally through the morass.
I have just read that this is the worst pre Thanksgiving week on record !!
Only fools rush in :O(
Trev
Hi Nickola,
I see so much of myself in your Q's.
This community is well-educated and/or extremely good traders.
For me, Daniel Kahneman captures the mental challenges that I (and perhaps you) face in his recent book.
http://www.amazon.com/Thinking-Fast-.../dp/0374275637
IMHO, the markets are probabilistic and mostly not well-understood/random events - especially on an intraday-basis. A great way to make money in all conditions is the probabilistic advantages offered by the robots.
Personally, in the last 60 days, I am 9 for 10 losing on my discretionary trading (while the IWM robot is averaging a 70% win rate - which is an insanely awesome win rate when coupled with the 4.16% to 1.31% win to loss rate)- that convinced me to stop. You see Billy's recent comments on his discretionary trading. Keep meticulous records and see the truth in your own trading (PM me if you want to know exactly what that means).
I have a note on my monitor that list my edges: #1 on that list is "Stay Out Power"
All my best and have a happy Thanksgiving!
Shawn
Hi Shawn,
It is very kind of you to be concerned. But, I'm not certain what symptoms I may exhibit?
As I noted, I sent out a probe today, as did Jesse Livermore, at a key inflection point in the market as presented by Billy. It never reached a stable profit point; every rally was sold, and I watched it all day. Finally, I began to fret about holding any position over night, and I sold the position and took, a perhaps less well advised but profitable trade in TZA to finish off the day with a scratch. The biggest waste, I suppose, was my time. but I enjoyed the chance to learn very much.
As for the robot, I should note that I have followed it carefully and faithfully. In June, I made a fundamental decision to follow the robots rather than Dr. K's MDM, even though I did very well with the Dr. K's MDM and recommend it. I missed the two best robot trades this summer because I was at funerals or on vacation with family. The robot, however, missed the big August down move and the creeping October rise. The profits I made at the end of September and the beginning of October were neutralized by losses in November.
I must admit that I find the Thinkorswim platform to be seductive but not effective. It offers so much power. In fact, as I have noted previously, I don't really need a Ferrari to trade the markets. Indeed, I have four active trading accounts. TOS is the worst performer of all by a large margin. Two accounts in Vanguard are up approximately 50% this year. Another flouders about in a TBT trade that many, including Tom Sosnoff (never believe anything your broker says), called the trade of the decade. It may take me a decade to realize the profit in that one! In any case, you can be sure Vanguard is no Ferrari. It is more like my 1997 Nissan Quest, stable and dependable but not flashy. And I trade it very infrequently.
I do have a rather significant question about the robots, and it regards position sizing. I sense that more experienced hands adjust their positions, choosing leveraged or unleveraged plays depending on their experience. Being an utter newbie and having read Trend Following and the turtle books, I know I should follow the order, no matter what I think. Presently, I've decided to take exposure of 125% of my TOS account on any robot trade. But honestly, I don't know if this is correct or not. The last couple of robot trades resulted in some hard blows. Nonetheless, I remain steadfast in my conviction that the robot presents the best possible opportunity for me and others here.
Lastly, I want to note that I pulled down Value in Time from my shelf to read once again during this Thanksgiving weekend. The logic is now more clear to me than when I read it in the spring, and I feel very excited (like a good graduate student) to know its author is "down the hall" and available to answer questions!
Again, thanks for your tips and concern,
Billy,
this is very interesting. Is your position sizing independent by the strenght of the robot signal?
Roberto, the various “strength” levels of the signals have been abandoned with recent developments of the robot. So all signals – buy or short – are now strong signals and can be approached similarly for position sizing.
Billy
Yes, I was thinking to the different ST and LT edges of a confirmed signal.
I then suppose you treat them all the same.
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