Value In Time and current application.

[manucastle]

'I would like to once again take this opportunity to describe how I use the EV RT system. For example, at the open yesterday, I was already long half a position on SQM. By midday, I saw that the stock pulled back to support, but that large players were not selling. This was a relatively good time to complete a position, knowing that the price was probably "brought down" just for this purpose.'

Hi Pascal,

I have just read your book VIT for the 3rd time and wondered how relavant chapter 6 'Automated Trading Systems' is to todays markets.

In particular would you still suggest, for the private investor, a combination of AB close to lower boundary, LER higher than past maxima and a 5 day time limit are still, generally, the most practical for us to follow. (And is the system still testing well). ?

I realize nothing stays the same and you have added a lot of comments on this site since the book, but would appreciate your most current thoughts on how private investors can use the RT website tools to navigate these markets.

Thanks in advance.

Trev

[Pascal]

'I would like to once again take this opportunity to describe how I use the EV RT system. For example, at the open yesterday, I was already long half a position on SQM. By midday, I saw that the stock pulled back to support, but that large players were not selling. This was a relatively good time to complete a position, knowing that the price was probably "brought down" just for this purpose.'

Hi Pascal,

I have just read your book VIT for the 3rd time and wondered how relavant chapter 6 'Automated Trading Systems' is to todays markets.

In particular would you still suggest, for the private investor, a combination of AB close to lower boundary, LER higher than past maxima and a 5 day time limit are still, generally, the most practical for us to follow. (And is the system still testing well). ?

I realize nothing stays the same and you have added a lot of comments on this site since the book, but would appreciate your most current thoughts on how private investors can use the RT website tools to navigate these markets.

Thanks in advance.

Trev

I believe that the markets are different from the time the VIT book was written for the following reasons:

- The Fed's QE really puts a lot of pressure on algos that operate on stock selection, simply because QE is broad base on all the markets and has the tendency to disregard stock value. This means that traders who short a stock based on a valuation analysis will be squeezed out as soon as QE pushes everything us... and we know that when everything goes up, the worst stocks gain more than other stocks.

- ETFs have become central to trading and they do increase the correlation level between stocks.

This means that stocks picking through AB/LER must be executed in close relation to the related sector and the market direction.

This is the reason why on the Filter section, the list of the stocks with the best ratings includes stocks that rate well on AB/LER, but also related to their specific sector. My advise is therefore to pick-up long plays when the 20DMF is in a buy mode and favor short plays when the 20DMF is in a short mode.


Pascal

[manucastle]

I believe that the markets are different from the time the VIT book was written for the following reasons:

- The Fed's QE really puts a lot of pressure on algos that operate on stock selection, simply because QE is broad base on all the markets and has the tendency to disregard stock value. This means that traders who short a stock based on a valuation analysis will be squeezed out as soon as QE pushes everything us... and we know that when everything goes up, the worst stocks gain more than other stocks.

- ETFs have become central to trading and they do increase the correlation level between stocks.

This means that stocks picking through AB/LER must be executed in close relation to the related sector and the market direction.

This is the reason why on the Filter section, the list of the stocks with the best ratings includes stocks that rate well on AB/LER, but also related to their specific sector. My advise is therefore to pick-up long plays when the 20DMF is in a buy mode and favor short plays when the 20DMF is in a short mode.


Pascal

Thanks for the quick reply Pascal.

Regarding the holding period, would you say 5 days is still relavant or has the Feds QE made this redundant also. If so would you use the TEV divergence to price (or alternatively a stop loss) as the main selling criteria ?

(Maybe, when the Fed stops playing around with the market we can go back to the books methods) :O)

Thanks,
Trev

[manucastle]

Thanks for the quick reply Pascal.

Regarding the holding period, would you say 5 days is still relavant or has the Feds QE made this redundant also. If so would you use the TEV divergence to price (or alternatively a stop loss) as the main selling criteria ?

(Maybe, when the Fed stops playing around with the market we can go back to the books methods) :O)

Thanks,
Trev

Sorry, I also meant to mention, a practice that is normally very difficult to do well - shorting stocks - as now become almost impossible to do well !!

Trev

[Pascal]

Sorry, I also meant to mention, a practice that is normally very difficult to do well - shorting stocks - as now become almost impossible to do well !!

Trev

It is still possible to short, and I do short every day, especially since I want to keep a neutral portfolio.

For example, 20DMF/Price intraday divergences can be shorted, but I always keep a stop just at the trade entry, so that if/when POMO pushes markets up, the trade does not become a losing trade.


Pascal