Wilder Delta and Adam

This is a discussion on Wilder Delta and Adam within the Technical Analysis forums, part of the Methods category; I've asked this on another board and got different opinions! so I thought I'd ask here as well. Welles Wilder ...

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Old Jan 22, 2004, 2:03pm   #1
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Wilder Delta and Adam

I've asked this on another board and got different opinions! so I thought I'd ask here as well.

Welles Wilder wrote a brilliant book (new concepts in technical trading) as well as developing some useful indicators. Then He went and wrote the Delta Phenomenon, which is apparently about how the markets are cyclical and in tune with lunar and solar cycles. Normally I would dismiss this as utter rubbish, but its difficult given Wilders pedigree.

If you have read the book, did the stress get to him, or is it worth looking at when life gets dull?

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Old Jan 22, 2004, 4:18pm   #2
 
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i think there have been posts about this (tho not many)... do a search - see wehat comes up....
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Old Jan 22, 2004, 8:43pm   #3
 
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I'm familiar with it.
It works pretty well for forecasting turning points in stocks, indices, and futures. It is not the Holy Grail, and in fact it's quite hard to explain how something that tells you AAPL will peak next Thursday (made up example <g>) can actually leave you struggling to profit at times although there are a range of ways to tackle some of the issues practical use might entail.
I would say that anyone dismissing it as a form of Astrology is incorrect in their assumption, it's not barking mad and a read of the book (which is something like £170 a copy I think) will quite likely convince you there's actually something in it. From there it's a short step to signing up. It isn't, I would suggest, a system to manually plot out, so to pursue it with intent to trade you are looking at a couple of grand for the software to make it considerably easier to use. After that its a few hundred quid a year to renew, or you can becom a 'director' ... he offered discounts on that a while back, I think it came as low as about 10 grand (dollars I think, rather than pounds).
It's quite impressive, but you won't necessairly become rich if you know how it's done - sometimes you see the prediction came true, but don't recognise it when it occurs perhaps. I think it would be arguable that if your TA is pretty good then it might cnfer an advantage in timing, and that is not something to sneeze at. If your TA is poor then I would think it's unlikely to reverse your luck.
Sorry to be a bit obtuse, I do know what it's about and it would not be fair to give away what WW has produced on here, but it is far from crackpot in my view. The associated website for the Delta Soc. has example charts on it that are a fair representation of its effectiveness. There is no scam involved at least!
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Old Jan 22, 2004, 8:59pm   #4
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Agree with DaveJB

Bought the book. Bought the software. Used the software. Ran the trades.

It's not that WW is suggesting an astrological influence per se, but he uses the lunar cycle to establish a regular periodic frequency on which to 'hang' the cycles for the various sectors. (Although he does hint as possible astrological connection, but you could do that for any aspect of human life - and probably be right - who knows).

As Dave said, it can be awkward to discern at times even when you think you know where the price 'should' be going. (That was my problem. More of this later.)

There are also reversal points at which - which, as you might imagine from the term - a complete reversal of the cycle occurs. This is not only a probabilistic expectation but also highly tradeable situation according to WW.

I like the system and it produced some results, but I'm afraid given my own personal psychological makeup I found the clearly defined cycle points provided me with a temptation to 'read' what wasn't there into price action - which was my undoing. I didn't follow the rules and made assumptions based on what I thought most likely to happen rather than waiting for confirmation.

I'd recommend the book and the s/w if you've got the balance for it and are interested in trading systems for their own sake and your additional knowledge.

There is a UK site which handles DeltaP for WW in the UK.

www.activetech.co.uk
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Old Jan 22, 2004, 9:59pm   #5
 
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I have the Delta Phenomenon book, and it is very good indeed - BUT - while it tells you how to go about working out market cycles and turns, the onus is on you to do it yourself. And this is the problem. After all, everyone wants the answers in an A + B = C format which works 100% of the time. This book won't give you that, but it just shows what is there, how it works, and leaves you to do all the hard donkey work yourself, which very few are prepared to do.

I bought the book three years ago and put in the leg work, hundreds of hours of it in fact, and it paid off brilliantly - it made me have a much better understanding of the market flow and waves. But I do believe that very few people indeed actually put in the work themselves, and just toss the book aside when it doesn't promise the Holy Grail.

The Delta Phenomenon is discretionary - and if you're the mechanical type then you'll just hate the book and wonder why you bothered buying it. And if you're a sceptic about the planetary influences that affect us, then don't bother buying the book.

I didn't bother with the software, just the book. I printed out hundreds of charts, stuck them all together in one long line around the house, and went to work with my coloured pencils. I got through two large pencils of each colour, which just goes to show how many charts I scribbled on! With a lot of practice it is very easy to see the cycles, and while it is not the total answer, it does go some way towards it.

There is also a further work which goes further, and I have that too - but it's a little too mathematical for my liking.
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Old Jan 22, 2004, 10:28pm   #6
 
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Skim,
I used felt tips <g> It's actually, I'd suggest, a good way to understand it - going straight into the software is a shortcut that (I suspect) doesn't give you the understanding that trying to do it by hand does.... my version of stocks tended to find more points than the official version, but I'd say I saw plenty to convince me it wasn't all rubbish and that cycles could indeed be forecast.
I'd disagree (politely) regarding the phrase:-
<<<And if you're a sceptic about the planetary influences that affect us, then don't bother buying the book.>>>
I totally don't believe in Astrology, the chances that balls of gas light years away might move the markets or help me win the lottery is laughable in my view - that doesn't mean that I can't readily accept the timing of the cycles as cycles exist in many areas of life. The cycles etc don't even actually tie in to the phenomena described, I would suggest - the only values involved from start to finish is the time between repeats, the wavelength... the dates that are attached to the heavily coloured in lines might well match an observable event - but the turns are described relative to those points, the dates of the lines are basically just convenient reference points and all patterns could easily be described relative to any chosen date... now repeat every X days.....
Personally I'm happy it works, but being able to predict a turn is not the same as being able to profit from it. I don't care about the cause of the cycles that much, although I'm curious to understand what is actually driving this - ultimately the cylcles show that something is occurring quite regularly... I wonder what? (The given reason, in my view, is a good example of extrapolating incorrectly from partial data - the fact that a better cause can't be deduced shows the data is insufficient, not that the deduction is correct).
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Old Jan 22, 2004, 10:30pm   #7
 
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Oops -
paste didn't work - the missing phrase is that about skeptics not bothering with it... belief in the cause as 'explained' is not needed when you can see the cyclical effect.
Dave
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