Confessions and Questions

[slgerritz]

1. Billy's link made much sense to me. thanks again.

2. I'm trained in social analysis, music and linguistics. Cultural, social, and economic analsys makes sense to me; mathematics and programming are not my strong suits.

3. I'm very sensitive to sound.

4. I was also, at one time, a highly rated chess player-- no longer to be sure.

I have tested my ideas in paper trading, and my performance is consistently superior to my real-world trading.

I should also note that my results with Think or Swim since last year are literally zero.

On the other hand, with Vanguard's quiet grandpa technologically inferior interface, I reached over 40% in the first five and a half months of 2011.

I think some of my problem with TOS is that it overwhelms me sensually-- too much information and no real capacity, it appears, to reduce the static/noise.

Of course there are many angles from which to ponder such problems. Knowing I'm at wit's end gives me good reason to turn to a robot. Unfortunately, the robot closed me out of a good trade and told me to sit tight at the low end of a market!

many thanks,

Pascal or Billy,

I am trying to get an understanding as to how the 20 DMF buy signal relates to the sector tables. The sector table currently shows only one sector, the jewlery sector, with a plus sign, meaning that it is the only buy candidate at the moment. On the other hand the 20 DMF is giving us a signal to buy the market. On the surface it seems that the 20 DMF is telling us that the market is deeply oversold and that we should buy now; yet, the sector tables do not seem to support this recommendation. Is the 20 DMF merely acting as an overbought/oversold oscillator? Markets can remain oversold for some time and can drop dramtically after major support is breached. Or, is the 20 DMF detecting large player accumulation going under the radar? Your answer will be so helpful?
Steve

[Pascal]

Pascal or Billy,

I am trying to get an understanding as to how the 20 DMF buy signal relates to the sector tables. The sector table currently shows only one sector, the jewlery sector, with a plus sign, meaning that it is the only buy candidate at the moment. On the other hand the 20 DMF is giving us a signal to buy the market. On the surface it seems that the 20 DMF is telling us that the market is deeply oversold and that we should buy now; yet, the sector tables do not seem to support this recommendation. Is the 20 DMF merely acting as an overbought/oversold oscillator? Markets can remain oversold for some time and can drop dramtically after major support is breached. Or, is the 20 DMF detecting large player accumulation going under the radar? Your answer will be so helpful?
Steve

The relation is explained in my June 13 comment of the day. The short version is that in a steep downtrend, money will move out of most sectors, but not uniformely. Some sectors will be sold before others and hence, when the selling stabilizes, some sectors will start attracting money while others will still go deeper in the red. The 20DMF tries to catch the point when there are more sectors that attract buyers than there are sectors that attract sellers.

That can also be seen in the figure that counts the number of days before a buy signal. When this figure reaches 0, it means that the majority of the sectors that had been waiting to issue a buy signal have done so. This is usually when longer term systems like IBD would detect a follow-through. So the 20DMF is very early and back-tests have show that this offers better returns, although it also carries more risks of drawdowns before a reversal. Large funds would go for slower systems, because they have more funds to invest. Individual traders have the advantage of being able to jump out very fast even without anyone noticing.

With the robots, we have a very good way to prevent drawdowns, because the robots have volatility based trailing stops and an entry close to a strong support level (for long plays.) We can see it with the current trade: it is very frustrating because it does not take off, but we have a low entry and a tight stop with a very good probability of gain. If the stop is taken out, the robot will turn to cash and will reassess the situation.

http://www.effectivevolume.com/conte...r-June-13-2011



Pascal

[adam ali]

Pascal,

Would it be possible to obtain an Excel file that matches the dates of the 20DMF buy signals and the number of days before a buy signal going back to 2007?

Thanks.