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7thSignalTrader
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Rhody Trader,
You make some very good observations about human behavior when it comes to trading. You are correct – many people do want the “quick fix” – but they don’t necessarily want to pay the price for it. In their narrow little small world, they equate paying a price to actually paying some money for somebody else’s work. They never once stop to think that paying the price means long hours, working hard, working smart, and many years of discovery.
There are also those in this world who feel that the world and everybody in it, owes them something. These lazy bums will be the very first to interrupt you and start making obscene demands of you and actually think that they are going to get a response from you. These are some of the laziest people on planet earth and they are hardly interested in “real solutions”. They just want more flawed premise in their narrow minds that will justify and reinforce their own inadequacies and shortcomings.
So, yes – the quick fix, holy grail, and laziness mentality runs ramped throughout the particular business that we happen to be involved with. I wholeheartedly agree with you on that score.
“I know in my case I was never a particularly great student, though I managed to get by with pretty good grades. I did my homework, but was never enamoured of it.”
---------------
But, at least you got it done. Where I went to school, we had a saying that went something like this: “A”ceptable, “B”arely, “C”youfail. So, a grade of “C” was very much frowned upon. I got two (2) “C’s” my entire time in college, but none of them were in the core of either of my three degrees and they all came in my freshman year. It was a culture shock year and besides, the girls were cute back then – so, I was very distracted.
I graduated from high school one year ahead of my class, so I guess deep down inside I felt like I had a little bit of a cushion during my first year of college and I probably got a little soft on the study side. But, I managed a “C” average just goofing around campus.
However, I did knuckle down, ran the board 2 semesters in a row with straight “A’s”, failed to do the same the third semester with two “B’s”, but picked off the forth semester with straight “A’s” again. I hung around two college campuses and went after three degrees between two schools.
So, I think I learned the benefit of doing thy homework early on in my life. But, I agree with you – not everyone learns the value of this lesson.
“When I speak to young people, the value of preparation is something I harp on.”
---------------
Kool! You like kids – good start! I held a CFI and CFII for years and I trained 17 pilots at various levels (from private ticket all the way through instrument rating), and almost half of my students were young people still in school. Parents with deep pockets mostly, but there were several who worked 5-8 hour a day while attending college at the same time AND engaging in their Flight Training. I really admired those students, because that is exactly how I did it – pay as you go (something our Congress should learn how to do).
I instructed from a very tight syllabus that I created, and my 1-v-1 instruction was intense and very focused. Afterwards, I would give them homework assignments that would prep them for the next lesson. During the training, some of them engaged in some light complaining about the level of homework I was assigning and the level of information that I was expecting them to absorb from lesson to lesson.
However, almost all of them, after taking their written, oral and flight examinations in the end, would come back and tell me how thankful they were that I trained them beyond what their examination would require – and – how easy all of their examinations turned out to be. Well, that’s how I was trained – so it should be no surprise that I would the impart the same lessons learned about the value of “homework” to my students.
Today, out of the 17 students that I have trained, four (4) of them are either Air Force or Navy Pilots flying the F/A 18 Hornet, F-15E (Night Attack) Eagle, C-130 Hercules and one S-3B Viking. Three (3) others are now commercial airline pilots flying either with a Regional Airline or a Major in the CRJ-700, EMB-145 and one just upgraded last summer to the left-seat with JetBlue in an A320 Airbus. The rest are successful private pilots in their own right and 2 of them have gone on to obtain their own CFI and one CFII qualifications – they can now teach others how to fly. About half of my students were adults and had no intention on flying commercially.
So – yes – I would constantly harp on the value of smart study habits with my young people. Ironically, I always had to poke and prod my adult students into doing their homework! (funny). They always had some “excuse” for not being prepared early on in the syllabus. By the end of the syllabus, I never had to ask them if they did their work – there actions proved that they did.
In other words Rhody, I had “great students” because I also had “great expectations” for them. I expected them to do well, and they did. In our country, unfortunately, we set too low an expectation bar, and then we wonder why and how our kids are not growing and developing mentally. I cannot ever remember a time when my parents would ever allow me to hold on to low bar expectations.
Every time I would get into trouble, one or both of them would sit me down and ask me what my plans were for solving the problem that I created for myself. They expected a written plan of action and they expected me to engage that plan creatively to solve the problem ethically and morally. They would never tell me how to do it – they forced me to think things out for myself. They had high expectation and so I simple rose to the challenge. My students got the same treatment from me. That is why today, they are “thinking pilot” and not robots.
“Those that find long-term success eventual find something that works for them and stick with it. Everyone else wanders around fairly aimlessly.”
-----------------
And, of course, blaming others for their lack of success, or ridiculing others for discovering paths that they themselves did not discover. Yes – there is a lot of that going around.
“Since you've obviously spent a ton of time doing research, what advice would you offer folks new to the game? How should they start their own path to discovery?”
----------------
Very good question. In my own opinion, you’ve got to go to the money – the money won’t come to you. And, the money exists inside the data – that is where the money resides. In other words, you will have to get good at exploring the data – OHLC.
Look – you really have two (2) choices:
1) You can follow the crowd.
2) You can write your own ticket.
Following the crowd is the path of least resistance and it is the path most traveled. However, broad is the gate the leads to destruction and many will find it. Writing your own ticket is of course the path least traveled. Narrow is the path to success and few will find it.
Either way, it is going to take a lot of study, a lot of time, a lot of focus and a lot of dedication. My first bit of advice would be to first decide why you are in the trading business in the first place. Many people just jump into this business because they saw some Wizetrade infomercial, or some Options Made Easy infomercial or Trend Trader, or a who host of other solutions. They always knew that “somebody” was making large sums of cash in the stock market, or the options market, or the commodities market or the Forex, but they never quite saw themselves doing the same.
Many felt early on, that the markets seemed too technical and too complicated for them to handle, or that the time that they would need to spend in getting up to speed was simply not outweighed by the potential returns of the business. So, they ended up sticking their toes in the waters of the trading business only to get them eaten off by sharks waiting around for neophyte traders to take the plunge for the first time. I was a little wet behind the ear trader neophyte just like everyone else who approached this market for the very first time. Everyone has to start somewhere and we ALL start ignorant – so don’t allow that word to create the wrong mentality.
Ignorance is not a bad thing – but ONLY if one recognizes that they are indeed ignorant AND takes the necessary steps to become educated along the correct path. Ignorance only becomes a serious problem for the would-be trader when he/she fails to recognize that they are in fact, ignorant. These people walk around in a complete self-inflicted cloud (and I don’t mean Ichimoku) where all they can attain is mediocrity and a failed sense of progress when they attack others for their own success, capability, knowledge and skill.
So, you have to first define who you are as a Trader. I am a Day Trader. I am a Swing Trader. I am a Strategic Position Trader. I am a [you fill in the blanks]. Whatever you are – only you have the power to decide. Don’t allow others to decide for you.
Second, I would say that once you have defined the type of trader you think you want to be – you have to make the decision that you are going to spend the time, energy and effort at getting high proficient at your trade. Leaning how to trade successfully is not a part-time gig. You will need to time to study, test and analyze. So, whatever is decided upon, there must be a clear sense of resolve about your determination to get the job done – to reach a level or proficiency in your trading that no one will be able to take away from you. So, develop a resolve, if you don’t have one already.
Third, you have the purpose and the resolve – now, you need understanding. There must be an above average understanding about how to make successful trades. There are many average traders out there and you don’t want to be one of them. The understanding you need must based in the type of trader that you desire to become. The market battle field is replete with the cut-off heads of those who tried to do too much at the same time without any focus whatsoever and very little trading discipline.
All because they do not understand who they are in the market that they attempt to trade. So, one day you see then dressed up like a Day Trader, the next time you see then dressed up like a Scalper, a Pull Back Trader, a Fundamental News Trader, etc. They are all over the place getting their hard earned cash stolen from them on a daily and weekly basis – only waking up months later (sometimes never) asking the question: “what just happened?” So, you have to understand those elements of the market that directly impact your style and approach to trading.
Fourthly, if you are going to chart your own course, you will have to expose yourself to researching raw data. This is the path that I took. I would like to tell you that it is easy – but it is not. It has been some of the hardest work that I’ve ever done. There is a wealth of information inside of 5 to 40 days of OHLC Daily Data for the Day and the Swing Trader. 5 to 40 daily bars or 5 to 40 weekly bars. These numbers have a particular type of significance associated with them.
You will need to develop a healthy diet for pure research. This is different than merely studying something that somebody else created. No! Pure Research is striping a thing down to its bare elements and exposing them to the light of your creativity and vision/inspiration. This is the essence of the system that I’ve created. It uses no conventional TA and it not a harbor for traditional wisdom or traditional decision making. It is based on a view and an understanding of the raw data inside the 5 to 40 bar range for daily and weekly segments.
There are crystal clear patterns that jump out at you with enough exploration of the raw data, but you are going to have to build tools for testing them as well. Once you find what you think is a repeating pattern, you will need to validate it through exhaustive (what I like to call) forensic testing. Your task will be to “view” the data from multiple perspectives within the time-frame that interests you the most.
The very first question that you will need to derive a good repeatable answer for is that of Magnitude. Before, you enter any trade – you should always know what the present magnitude is for any given instrument. You could have excellent Timing, Direction and Probability, but if your trade possesses no Magnitude, your potential for profit is severely handicapped and by definition, you just increased your risk do to market exposure. So, having a thorough understanding of Magnitude, is your first and best step in writing your own ticket.
Visit the site:
Example of Original Engine Core
This is not my site. However, this particular trading system was based on my original prototype. The core of the engine that drives this systems comes from my original work. The owner of the site took my original work and developed an excellent Swing Trading System. Click on the “Software” link, to get an idea of what it looks like. It is not quite as difficult to read as a Level II screen, but it is a semi-technical screen to look at. That system is two (2) full generations behind my current version right now. My early work was not predictive. My current work is a Predictive Model. The core of the engine that you see at this website comes from my early engine technology.
At some point in your project, you will need to build a model that seeks and notifies you of repeatable patterns. This will be the core of your research, investigation, exploration and skills development. All the while, you will be building a trading technology of your own. I maintained a very high standard for inclusion into the core system. In other words, I’ve created many signals over the years and some of them are pretty good about 70% of the time. However, I don’t allow 70% resolution into my engine.
I set a much higher standard than that, and I would advise, that if you really want as precise a system as you can get, to only include those signals that are as close to 100% as you can get. None will ever be 100% all the time, but if your research is good, then you can get close enough. So, be very wise about what you allow into your final core.
It is very easy to get attached to one particular Indictor or Signal simply because you’ve spent so much time developing it – but you don’t want to fall into that trap. I have many signals and indicators that I spent many months working on, and final came to the conclusion that they simply did not meet the very high standards – so they were not included in the core of the engine. Your system will be no strong than its weakest signals.
Fifthly, get ready for the idiots – they will come out of the woodwork and attack what you have created. They don’t know anything about what you will have created, but they will have much to say about what you have created and you as well. They are clueless. They will try to speak the language of your system only to make themselves appear on the surface to be learned about what you have built. They are fools of the highest order and you will need to get ready to deal with them.
They will be so hung-up on old ways of thinking that what you are trying to describe to them will seem like another language to them. But, rather than admit that they are ignorant and in desperate need of an education, they will ridicule you for building something that they cannot understand.
That’s the brutal truth about this mentality and they will call you arrogant and condescending for speaking the truth about them – so get ready for that as well.
Lastly, at some point – you are going to have to decide what you want to do with the years of hard work that you have just finished, or are about to finish! You will need to determine whether or not you will share you work with the general public (be ready for the idiots at this point), pick someone to mentor like a Protégé of some sort (some one you can trust), select a small group of closely held company to share your work with, or quite easily – simply keep your work to yourself and trade it quietly while you move on to other projects in your life – sharing it with no one.
The choice will be all yours!
I like the idea of trying to help others, but that quickly becomes a chore given all the various forms of lunacy and insanity that you end up having to deal with from people that just don’t get it and never will. But, you can find many different ways to help people – it does not all have to be through showing them how to trade better. For example, I have certain goals that are going to be very expensive to fully fund and get off the ground – so, I will be able to use my work for the purpose of funding those goals and projects that have nothing at all to do with trading.
So, pick something that is worthy of doing and spending your valuable time on (hint: think kids and young people!) and then devote much of your new found wealth on something that will be here long after you leave this planet. Improve the planet in some way – make contribution. There are so many narrow minded selfish people in this world, that your contributions to a better world are much needed.
Use your new found power for good, bottom line. Some will hate you for it – but that’s their own lack of integrity coming to the surface. It is no reflection on you and it speaks volumes about them. In the end game, YOU will be the ONLY one who will have to give an account for what you did while you were here on this earth.
With becoming a successful trader, you will have a bit of an advantage in making that record an outstanding one when it is time for you to give an account of your actions.
You make some very good observations about human behavior when it comes to trading. You are correct – many people do want the “quick fix” – but they don’t necessarily want to pay the price for it. In their narrow little small world, they equate paying a price to actually paying some money for somebody else’s work. They never once stop to think that paying the price means long hours, working hard, working smart, and many years of discovery.
There are also those in this world who feel that the world and everybody in it, owes them something. These lazy bums will be the very first to interrupt you and start making obscene demands of you and actually think that they are going to get a response from you. These are some of the laziest people on planet earth and they are hardly interested in “real solutions”. They just want more flawed premise in their narrow minds that will justify and reinforce their own inadequacies and shortcomings.
So, yes – the quick fix, holy grail, and laziness mentality runs ramped throughout the particular business that we happen to be involved with. I wholeheartedly agree with you on that score.
“I know in my case I was never a particularly great student, though I managed to get by with pretty good grades. I did my homework, but was never enamoured of it.”
---------------
But, at least you got it done. Where I went to school, we had a saying that went something like this: “A”ceptable, “B”arely, “C”youfail. So, a grade of “C” was very much frowned upon. I got two (2) “C’s” my entire time in college, but none of them were in the core of either of my three degrees and they all came in my freshman year. It was a culture shock year and besides, the girls were cute back then – so, I was very distracted.
I graduated from high school one year ahead of my class, so I guess deep down inside I felt like I had a little bit of a cushion during my first year of college and I probably got a little soft on the study side. But, I managed a “C” average just goofing around campus.However, I did knuckle down, ran the board 2 semesters in a row with straight “A’s”, failed to do the same the third semester with two “B’s”, but picked off the forth semester with straight “A’s” again. I hung around two college campuses and went after three degrees between two schools.
So, I think I learned the benefit of doing thy homework early on in my life. But, I agree with you – not everyone learns the value of this lesson.
“When I speak to young people, the value of preparation is something I harp on.”
---------------
Kool! You like kids – good start! I held a CFI and CFII for years and I trained 17 pilots at various levels (from private ticket all the way through instrument rating), and almost half of my students were young people still in school. Parents with deep pockets mostly, but there were several who worked 5-8 hour a day while attending college at the same time AND engaging in their Flight Training. I really admired those students, because that is exactly how I did it – pay as you go (something our Congress should learn how to do).
I instructed from a very tight syllabus that I created, and my 1-v-1 instruction was intense and very focused. Afterwards, I would give them homework assignments that would prep them for the next lesson. During the training, some of them engaged in some light complaining about the level of homework I was assigning and the level of information that I was expecting them to absorb from lesson to lesson.
However, almost all of them, after taking their written, oral and flight examinations in the end, would come back and tell me how thankful they were that I trained them beyond what their examination would require – and – how easy all of their examinations turned out to be. Well, that’s how I was trained – so it should be no surprise that I would the impart the same lessons learned about the value of “homework” to my students.
Today, out of the 17 students that I have trained, four (4) of them are either Air Force or Navy Pilots flying the F/A 18 Hornet, F-15E (Night Attack) Eagle, C-130 Hercules and one S-3B Viking. Three (3) others are now commercial airline pilots flying either with a Regional Airline or a Major in the CRJ-700, EMB-145 and one just upgraded last summer to the left-seat with JetBlue in an A320 Airbus. The rest are successful private pilots in their own right and 2 of them have gone on to obtain their own CFI and one CFII qualifications – they can now teach others how to fly. About half of my students were adults and had no intention on flying commercially.
So – yes – I would constantly harp on the value of smart study habits with my young people.
Ironically, I always had to poke and prod my adult students into doing their homework! (funny). They always had some “excuse” for not being prepared early on in the syllabus. By the end of the syllabus, I never had to ask them if they did their work – there actions proved that they did.In other words Rhody, I had “great students” because I also had “great expectations” for them. I expected them to do well, and they did. In our country, unfortunately, we set too low an expectation bar, and then we wonder why and how our kids are not growing and developing mentally. I cannot ever remember a time when my parents would ever allow me to hold on to low bar expectations.
Every time I would get into trouble, one or both of them would sit me down and ask me what my plans were for solving the problem that I created for myself. They expected a written plan of action and they expected me to engage that plan creatively to solve the problem ethically and morally. They would never tell me how to do it – they forced me to think things out for myself. They had high expectation and so I simple rose to the challenge. My students got the same treatment from me. That is why today, they are “thinking pilot” and not robots.
“Those that find long-term success eventual find something that works for them and stick with it. Everyone else wanders around fairly aimlessly.”
-----------------
And, of course, blaming others for their lack of success, or ridiculing others for discovering paths that they themselves did not discover. Yes – there is a lot of that going around.
“Since you've obviously spent a ton of time doing research, what advice would you offer folks new to the game? How should they start their own path to discovery?”
----------------
Very good question. In my own opinion, you’ve got to go to the money – the money won’t come to you. And, the money exists inside the data – that is where the money resides. In other words, you will have to get good at exploring the data – OHLC.
Look – you really have two (2) choices:
1) You can follow the crowd.
2) You can write your own ticket.
Following the crowd is the path of least resistance and it is the path most traveled. However, broad is the gate the leads to destruction and many will find it. Writing your own ticket is of course the path least traveled. Narrow is the path to success and few will find it.
Either way, it is going to take a lot of study, a lot of time, a lot of focus and a lot of dedication. My first bit of advice would be to first decide why you are in the trading business in the first place. Many people just jump into this business because they saw some Wizetrade infomercial, or some Options Made Easy infomercial or Trend Trader, or a who host of other solutions. They always knew that “somebody” was making large sums of cash in the stock market, or the options market, or the commodities market or the Forex, but they never quite saw themselves doing the same.
Many felt early on, that the markets seemed too technical and too complicated for them to handle, or that the time that they would need to spend in getting up to speed was simply not outweighed by the potential returns of the business. So, they ended up sticking their toes in the waters of the trading business only to get them eaten off by sharks waiting around for neophyte traders to take the plunge for the first time. I was a little wet behind the ear trader neophyte just like everyone else who approached this market for the very first time. Everyone has to start somewhere and we ALL start ignorant – so don’t allow that word to create the wrong mentality.
Ignorance is not a bad thing – but ONLY if one recognizes that they are indeed ignorant AND takes the necessary steps to become educated along the correct path. Ignorance only becomes a serious problem for the would-be trader when he/she fails to recognize that they are in fact, ignorant. These people walk around in a complete self-inflicted cloud (and I don’t mean Ichimoku) where all they can attain is mediocrity and a failed sense of progress when they attack others for their own success, capability, knowledge and skill.
So, you have to first define who you are as a Trader. I am a Day Trader. I am a Swing Trader. I am a Strategic Position Trader. I am a [you fill in the blanks]. Whatever you are – only you have the power to decide. Don’t allow others to decide for you.
Second, I would say that once you have defined the type of trader you think you want to be – you have to make the decision that you are going to spend the time, energy and effort at getting high proficient at your trade. Leaning how to trade successfully is not a part-time gig. You will need to time to study, test and analyze. So, whatever is decided upon, there must be a clear sense of resolve about your determination to get the job done – to reach a level or proficiency in your trading that no one will be able to take away from you. So, develop a resolve, if you don’t have one already.
Third, you have the purpose and the resolve – now, you need understanding. There must be an above average understanding about how to make successful trades. There are many average traders out there and you don’t want to be one of them. The understanding you need must based in the type of trader that you desire to become. The market battle field is replete with the cut-off heads of those who tried to do too much at the same time without any focus whatsoever and very little trading discipline.
All because they do not understand who they are in the market that they attempt to trade. So, one day you see then dressed up like a Day Trader, the next time you see then dressed up like a Scalper, a Pull Back Trader, a Fundamental News Trader, etc. They are all over the place getting their hard earned cash stolen from them on a daily and weekly basis – only waking up months later (sometimes never) asking the question: “what just happened?” So, you have to understand those elements of the market that directly impact your style and approach to trading.
Fourthly, if you are going to chart your own course, you will have to expose yourself to researching raw data. This is the path that I took. I would like to tell you that it is easy – but it is not. It has been some of the hardest work that I’ve ever done. There is a wealth of information inside of 5 to 40 days of OHLC Daily Data for the Day and the Swing Trader. 5 to 40 daily bars or 5 to 40 weekly bars. These numbers have a particular type of significance associated with them.
You will need to develop a healthy diet for pure research. This is different than merely studying something that somebody else created. No! Pure Research is striping a thing down to its bare elements and exposing them to the light of your creativity and vision/inspiration. This is the essence of the system that I’ve created. It uses no conventional TA and it not a harbor for traditional wisdom or traditional decision making. It is based on a view and an understanding of the raw data inside the 5 to 40 bar range for daily and weekly segments.
There are crystal clear patterns that jump out at you with enough exploration of the raw data, but you are going to have to build tools for testing them as well. Once you find what you think is a repeating pattern, you will need to validate it through exhaustive (what I like to call) forensic testing. Your task will be to “view” the data from multiple perspectives within the time-frame that interests you the most.
The very first question that you will need to derive a good repeatable answer for is that of Magnitude. Before, you enter any trade – you should always know what the present magnitude is for any given instrument. You could have excellent Timing, Direction and Probability, but if your trade possesses no Magnitude, your potential for profit is severely handicapped and by definition, you just increased your risk do to market exposure. So, having a thorough understanding of Magnitude, is your first and best step in writing your own ticket.
Visit the site:
Example of Original Engine Core
This is not my site. However, this particular trading system was based on my original prototype. The core of the engine that drives this systems comes from my original work. The owner of the site took my original work and developed an excellent Swing Trading System. Click on the “Software” link, to get an idea of what it looks like. It is not quite as difficult to read as a Level II screen, but it is a semi-technical screen to look at. That system is two (2) full generations behind my current version right now. My early work was not predictive. My current work is a Predictive Model. The core of the engine that you see at this website comes from my early engine technology.
At some point in your project, you will need to build a model that seeks and notifies you of repeatable patterns. This will be the core of your research, investigation, exploration and skills development. All the while, you will be building a trading technology of your own. I maintained a very high standard for inclusion into the core system. In other words, I’ve created many signals over the years and some of them are pretty good about 70% of the time. However, I don’t allow 70% resolution into my engine.
I set a much higher standard than that, and I would advise, that if you really want as precise a system as you can get, to only include those signals that are as close to 100% as you can get. None will ever be 100% all the time, but if your research is good, then you can get close enough. So, be very wise about what you allow into your final core.
It is very easy to get attached to one particular Indictor or Signal simply because you’ve spent so much time developing it – but you don’t want to fall into that trap. I have many signals and indicators that I spent many months working on, and final came to the conclusion that they simply did not meet the very high standards – so they were not included in the core of the engine. Your system will be no strong than its weakest signals.
Fifthly, get ready for the idiots – they will come out of the woodwork and attack what you have created. They don’t know anything about what you will have created, but they will have much to say about what you have created and you as well. They are clueless. They will try to speak the language of your system only to make themselves appear on the surface to be learned about what you have built. They are fools of the highest order and you will need to get ready to deal with them.
They will be so hung-up on old ways of thinking that what you are trying to describe to them will seem like another language to them. But, rather than admit that they are ignorant and in desperate need of an education, they will ridicule you for building something that they cannot understand.
That’s the brutal truth about this mentality and they will call you arrogant and condescending for speaking the truth about them – so get ready for that as well.
Lastly, at some point – you are going to have to decide what you want to do with the years of hard work that you have just finished, or are about to finish! You will need to determine whether or not you will share you work with the general public (be ready for the idiots at this point), pick someone to mentor like a Protégé of some sort (some one you can trust), select a small group of closely held company to share your work with, or quite easily – simply keep your work to yourself and trade it quietly while you move on to other projects in your life – sharing it with no one.
The choice will be all yours!
I like the idea of trying to help others, but that quickly becomes a chore given all the various forms of lunacy and insanity that you end up having to deal with from people that just don’t get it and never will. But, you can find many different ways to help people – it does not all have to be through showing them how to trade better. For example, I have certain goals that are going to be very expensive to fully fund and get off the ground – so, I will be able to use my work for the purpose of funding those goals and projects that have nothing at all to do with trading.
So, pick something that is worthy of doing and spending your valuable time on (hint: think kids and young people!) and then devote much of your new found wealth on something that will be here long after you leave this planet. Improve the planet in some way – make contribution. There are so many narrow minded selfish people in this world, that your contributions to a better world are much needed.
Use your new found power for good, bottom line. Some will hate you for it – but that’s their own lack of integrity coming to the surface. It is no reflection on you and it speaks volumes about them. In the end game, YOU will be the ONLY one who will have to give an account for what you did while you were here on this earth.
With becoming a successful trader, you will have a bit of an advantage in making that record an outstanding one when it is time for you to give an account of your actions.
7thSignalTrader
Well-known member
- Messages
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- Likes
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Twalker,
“Wow, amusing thread. I take it you are no advocate then of the KISS system.”
---------------
Glad you find it amusing. However, do you actually have something cogent to talk about relative to this thread. There is a lot being discussed here from a “technical” standpoint, can you add anything to the technical discussion?
“Is that your L-39 TV ? Lovely aircraft, unfortunately with fuel and maintenance costs in this country being what they are these cost about $1000/hr to fly. Certainly need a good system if you want to keep that baby in the air.”
-------------------
Do you have any ratings to talk about? If so, how many PIC HR’s would I find in your LB?
No – this is an L-39-C fighter trainer aircraft. This obviously, does not have the same capabilities of an F-22 Raptor, but it is certainly no Cessna 152 by any stretch of the imagination.
No – I own a different L-39-C as well as a Legacy2000 and I have designs on building a new high performance jet prototype as well. My L-39-C was prepaired by: www.worldwidewarbirds.com.
One of the nice things about this aircraft is that it is a fairly high energy ship capable of 470 MPH. It is also fully aerobatic and stressed to -4 and +8 G’s. It is low on maintenance, easy to fly, safe to fly, and for a jet engine in the 3,800lb trust category, it climbs very well at more than 4,300fpm.
I get about 2.6 hours flight time at cruise altitude with a 45 minute reserve @ 332 max fuel loads. Jet A of class 1 runs about $1.69 per gallon nationwide (changing rapidly), so a full load costs me on average about $561.08 right now. I get 2.6 flight hours out of that excluding fuel burn during ground operations – so, I’ll normally see about 2.0 hours on a round trip flight. That is approximately $280.54 per hour. Average maintenance costs per hour on my aircraft is approximately $400 per hour and the housing and insurance costs per hour for me run about $275 per hour. All total – about $955.54 per hour.
So, you were not that far off from reality.
“Wow, amusing thread. I take it you are no advocate then of the KISS system.”
---------------
Glad you find it amusing. However, do you actually have something cogent to talk about relative to this thread. There is a lot being discussed here from a “technical” standpoint, can you add anything to the technical discussion?
“Is that your L-39 TV ? Lovely aircraft, unfortunately with fuel and maintenance costs in this country being what they are these cost about $1000/hr to fly. Certainly need a good system if you want to keep that baby in the air.”
-------------------
Do you have any ratings to talk about? If so, how many PIC HR’s would I find in your LB?
No – this is an L-39-C fighter trainer aircraft. This obviously, does not have the same capabilities of an F-22 Raptor, but it is certainly no Cessna 152 by any stretch of the imagination.
No – I own a different L-39-C as well as a Legacy2000 and I have designs on building a new high performance jet prototype as well. My L-39-C was prepaired by: www.worldwidewarbirds.com.
One of the nice things about this aircraft is that it is a fairly high energy ship capable of 470 MPH. It is also fully aerobatic and stressed to -4 and +8 G’s. It is low on maintenance, easy to fly, safe to fly, and for a jet engine in the 3,800lb trust category, it climbs very well at more than 4,300fpm.
I get about 2.6 hours flight time at cruise altitude with a 45 minute reserve @ 332 max fuel loads. Jet A of class 1 runs about $1.69 per gallon nationwide (changing rapidly), so a full load costs me on average about $561.08 right now. I get 2.6 flight hours out of that excluding fuel burn during ground operations – so, I’ll normally see about 2.0 hours on a round trip flight. That is approximately $280.54 per hour. Average maintenance costs per hour on my aircraft is approximately $400 per hour and the housing and insurance costs per hour for me run about $275 per hour. All total – about $955.54 per hour.
So, you were not that far off from reality.
TradeVector said:
My mind is reeling with sarcastic replies.
But it's Christmas, and if nothing else Mr. Vector I can honestly say your posts make me smile.
Can I perhaps suggest you don't take yourself quite so seriously in the New Year?
Best of luck to you and all.
7thSignalTrader
Well-known member
- Messages
- 351
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------------triax said:
Not one single word relevant or cogent to the technical dialog between myself and D998. The inability to dialog on the technical merrits and/or the issues speaks volumes.
Merry Christmas!
Last edited:
TradeVector said:------------
Not one single word relevant or cogent to the technical dialog between myself and D998. The inability to dialog on the technical merrits and/or the issues speaks volumes.
Merry Christmas!
You may be confusing inability with unwillingness, but anyway, I'll leave you to it; I did not intend to come across as mean-spirited (though on reflection I may have done - mea culpa).
Seriously, Merry Christmas to you as well.
TV,
Structure governs Function, has been appropriated from Medicine. The inverse must logically also be true, "Function governs Structure". Therefore should we examine the function of FX, the examination should enlighten and elucidate a rational approach to profitability.
The FX markets comprise 4 different markets; Spot, Futures, Options, Derivatives. Most FX trading now occurs in the derivatives market consisting of; Forward contracts, Swaps, Forward Rate agreements, Barrier options.
The FX market is closely linked with the trading of securities, particularly bonds and money market instruments.
The participants include; Exporters / Importers, firms that operate internationally ,eventually converting into their home currency.
Investors,businesses own facilities, hold property or buy companies in other countries. These activities constitute direct investment. Investment also takes the form of investments within bonds, equities, or other securities denominated in foreign currency.
Speculators, buy and sell currencies solely to profit from anticipated changes in exchange rates.
Governments, may trade currency for the purpose of affecting exchange rates. A governments deliberate attempt to alter exchange rates between 2 currencies by buying one and selling the other is called intervention.
Herstatt risk, is the time zone risk, due to settlement factors.
Why exchange rates fluctuate in the short term is due to the latest news, proposed legislation, fiscal, monetary, economic data, etc. However the "fundamental" drivers of value and therefore the "price" are "Real interest rates".
The mechanism by which real interest rates affect exchange rates is known by "Covered interest arbitrage"
This will at any given time result in the "Covered interest parity"
Now from your previous posts there would seem to be some inconsistencies regarding the underlying philosophy of your methodology.
Quote;
"The concept of “value” really has no place in this trading technology. Bond Traders care about value – Real Estate investors care about value – Derivative Speculators care about value – Venture Capitalists care about value – M&A Specialists care about value…. I don’t care about value. I care about Movement. Nothing more and nothing less."
Now from my previous brief descriptions regarding the function of the market it is plain to see that valuation does matter within the structure of the market. The structure being now defined as "price data points" These price data points will privide a real value return to the investor. They form historical data within the market forming a value structure.
Quote;
"Valuations are not at the core of what the system does. At some point, if I’m going to make money in the market, I’ve got to actually pull the trigger on executing the trade. Trading is less about trading than it is making decisions. Let me repeat that another way: Trading is not about trading, it is about making decisions.
The decision to execute has to be based on a premise. The premise can only be based on what I understand about the expected outcome of the trade. The expected outcome of the trade is the premise revealed. I cannot make a good decision in a vacuum (i.e., without a sound premise). Therefore, I always have four (4) choices:"
As valuations are not core to the system, you are speculating on price volatility and the short term trend of price to trend in a direction for an indeterminate amount of time. This must be true as you claim not to calculate value, therefore you will not arbitrage, you seek movement, therefore by definition you need price to trend in a consistent direction for a period of time. You have given examples of 150pip direction,(ie. a trend of 150pips ) as a target that is predicted via your model. I am assuming a non-hedged position here......and this must in point of fact be true as if you were hedging a position, then 3-10pips would be your range give or take.
Quote;
The Decision Support System (DSS) module of the system is responsible for managing the details of the of the “quality” or “condition” of the currently dominant trajectory. This is why in volatile markets, I am able to make the entries and the exist at relatively close approximations to the actual morphing position of the Trajectory itself. The identity of the actual pivot is inside the transitional phase of the two trajectories. In other words, the system already has the DNA of the Trajectory typed, mapped and stored in the system database. When it comes across a trajectory transitional phase, it sees the distinctions between the two trajectory types, maps the transitional characteristics to a historically significant probability and then throws the “decision” light to the screen"
Quote;
Sure, when I’m running up pip totals as the “close price” moves either up or down the time-scale, one might say that I’m moving with the “trend”. That may, or may not be true – it depends on which Trajectory I happen to be trading at the time. It could be the Short Trajectory, or it could be the Long Trajectory. Now, here is something that is really going to blow some minds:
I can actually trade the Subordinate Trajectory, and STILL net a hefty gain on the trade.
This means that no matter which direction I trade in (Long or Short), on almost any given day (there are conditional concerns of course), I can still net a very respectable profit as long as I enter the trade at the right location within the Price Structure AND as long as the Price Structure itself remains intact, which is a known quantity long before I ever enter the trade."
This would just confirm that you are in point of fact taking a directional trade for a predictive pip total. The right location within a trade would indicate inflection points, or pivot points, or support / resistance points from a more orthodox trading terminology. This methodology is well known and understood, the accuracy and reliability of these points is open to much debate however.
Quote;
Reoccurring fundamental new vectors will always be a part of the model (see my explanation above). The question is, how does that news get encoded into the system via the news vector key. Remember, I do not view all news to be the same, the system categorizes and the types the news into relationships. Those relationships are then used as inputs to the MetaBrain™, as described earlier."
You cannot avoid macro-economics if you are a trader or an investor in the Forex. Its impact is there whether the trader/investor knows it or not, desires it or not, likes it or not, or understands it or not. It cannot be avoided or filtered out under any circumstances. Especially, in the Forex, macro-economics plays a major role in the direction of “price”. It is a very entrenched component of the “market”.
Quote;
Applying mathematics to patterns and getting the results as seen above is far more important to this technology than theorizing about which Fundamental factor “might” impact the trade today. Being “aware” of the Fundamentals is very important. But, that does not build the tactical decision basis for making the trade in the first place. Fundamental factors have their place and Technical factors have their place in the market. Which is why this trading technology uses b
Fundamental news vectors imply a "valuation" is calculated. Macro-economics implies that a value has been calculated. Now we know that this is in point of fact incorrect as I have queried this previously.
Therefore, ( an assumption ) the history of past "news" of the same "type" or content has been analysed to "probable" outcome, not in a valuation context, but an impact upon short term beta and psychology. This of course is not a valuation, it is irrational, emotional, and momentum based. It will result in trends that drive substantial overvaluations and undervaluations. And as such relies not upon a quantitative analysis of the facts, but a qualitative analysis of the human psychology. This contradiction and inconsistency would give me pause for thought.
The news vector that does the damage would therefore be the news that would revise the underlying fundamentals ( value) in a way that would impact the current valuation, or imply a serious change in underlying fundamentals.
Quote;
The historical data contains all news vectors that have ever impacted the landscape of the currency pair. All news classified by the system as “Parity”, is already accounted for. Only Non-Parity news cannot be accounted for. But, saying that the system is flawed because it cannot account for Unexpected News, is like saying that an atmospheric High Pressure system is flawed because it cannot account for the atmospheric Low Pressure system that is about to occlude it. The warm are mass had no prior knowledge of the cold air mass or the occluded front that was about to up-root it and change its structure."
No not flawed, just imperfect. There simply is not a perfect system as the future is an unknown quantity. Analysis is concerned primarily with values which are supported by the facts and not those which depend largely upon expectations . In this respect the analyst's approach is diametrically opposed to that of the speculator, meaning thereby one whose success tuns on his ability to forcast or to guess future developments. Needless to say, the analyst must take possible future changes into account, but his primary aim is not so much to profit from them as to guard against them. He views the business future as a hazard which his conclusions must encounter rather than as the source of his vindication.
Quote;
For the value investor – maybe. Traders on the other hand don’t have the same event horizons as investors (much shorter time segments), therefore, the accuracy of the “decision” to enter/exit a trade needs to be much higher than the investor."
The need to be right time after time, possibly several times a day puts an immeasurable strain upon the system, and possibly the trader who will need to make the final decision as to jump or stay. This exponential increase the reduction of margin for error, is the reason for the vast failure rate in daytrading generally, it remains to be seen if the decision and recognition process can be automated, as this is clearly the intent of your proprietary methodology. When I say automated, we are really talking about artificial intelligence now. This is leading to the conceptual theory of "Efficient Market" where all decisions are rational, and based on an understanding of the values. This would by definition eliminate profit opportunity, as at any given moment the information, values, are all calculated, the moment new information that was fundamentally important hit, the fastest execution would profit.
Quote;
That simply blows my mind to bits. It makes absolutely no sense at all, when all that same “investor” has to do is study the Forex and it’s very long term (10-15 year swings) and capture at least 500% net return over the same time frame and there would be no more “money management headaches” than there would be in worrying about whether or not your Mutual Fund Manager was going to lose you money for you."
These are driven by the fundamentals, it becomes a moot point that you must be able to analyse, understand, and select the correct investment to profit from any decision. This has always been, and probably remains a big ask.
Quote;
That’s because they are busy trying to calculate “value”, when they should be focused on Trajectories. They are bound by rules of analysis that I am not bound by. They are trapped inside a 33 year old technical analysis world view, and I am not. They are bounded by self-inflicted rules of “Risk Management”, and I am not. I have re-written my own personal views on “Risk”. They must be extremely conservative in their approach to profit and revenue, while I am extremely liberal in my approach in relative terms. I can be because my model for growth is base in the technology that I use and therefore, I am free to think outside the box. Most “professionals” in this business cannot."
While it may be argued that you have indeed rewritten the rules on "technical analysis", and that will be proven or not as the case may be in the fullness of time, you have not yet made a case for the suspension of valuation as a methodology for profiting from the financial markets. The FX, in the longer time frames will still conform to its "Structure, as governed by its function"
Quote;
If it were that imperfect and that seriously flawed, Well Fargo Bank would not “risk” $318 million per day in the Forex. Macro Funds, Micro Funds, International Banks, and large scale players all use the same data and they all come to the Forex to conduct business on a daily basis. $1.5 Trillion per day (more than 3 times that of the NYSE, NASDAQ and AMEX combined) would not flow through this global machine if those who make up the Interbank community thought the reality was too imperfect and too flawed"
Unfortunately, banks now seek to derive revenue from speculative trading. They accept that risk is present, and seek to manage that risk via risk management plans. These are sometimes up to the task, and at others, sadly lacking, viz, Barings and National Australia Bank recently, also China Petroleum Company disclosed heavy FX losses from poorly managed risk.. The point being, that the banks embrace risk, to drive revenue, quite different from saying there is no risk as the data is not corrupted by speculation, as quite clearly it is.
Quote;
This is a Hybrid Trading Technology that uses both Technical AND Fundamental inputs. The Fundamental inputs come from the market in either expected or unexpected form. The Technical inputs are new and not related to old TA. I understand Fundamental “valuations” perfectly fine – and that is the main reason why I think they are a waste of my time. They don’t help with Timing, Direction, Magnitude and Probability anywhere near the same degree as the technology within this trading solution does on a routine basis."
From a purely daytrading perspective I would have to agree, however from the standpoint of making and keeping a substantial profit, I must seriously disagree. And it is about earning a return on invested capital.
Quote;
“My business partner, was for 20yrs the head FX trader at Citibank with a $100M daytime limit……..he uses technical analysis.”
------------
Which Technical Analysis? They are not all created equal."
He uses vertical red,green,yellow and orange lines.They are spaced at a specific timeframe apart, and traded upon a cyclical analysis.
Quote;
This trading technology is not about “Value Investing”. Value Investing is very slow. It is at least one universe away from what this trading technology does. It is like taking a grand of sand and using it to fully describe an orange. It is not even an apple to orange question. It is worse than that. Two entirely different worlds that approach the problem from entire different perspectives. The cannot be compared along any other line outside of results. And, I just don’t see any value investor in the Forex even remotely approaching the same level of results (as seen above).
Besides, how many Day Traders use “Value Investing” methodologies? Investing is worlds apart from Trading.
Value investors in the FX, well Warren Buffett is $600M short the USD from 2yrs ago, I guess he just liked the look of the chart, but seriously, Buffett is an exception, however if more people had his acumen, more people would have wealth. As to daytraders utilising value, probably none........but how many daytraders make money?
Quote;
“Now this example is not pertinant to currency, and I would never trade currency for that very reason. The difficulty of analysis and accuracy of analysis must be seriously questioned.”
----------------
Ok – thanks – I was getting a little bit concerned that you would actually use this approach to Day Trade the Forex!"
No, but let me supply you with a calculation for trading the FX;
Let,
E = expected earnings (GDP)
R= expected growth rate
Y= current Yield on AAA Bonds........then
E(2R + 8.5 ) * Y/4 = intrinsic value of the currency.
Cheers d998
Structure governs Function, has been appropriated from Medicine. The inverse must logically also be true, "Function governs Structure". Therefore should we examine the function of FX, the examination should enlighten and elucidate a rational approach to profitability.
The FX markets comprise 4 different markets; Spot, Futures, Options, Derivatives. Most FX trading now occurs in the derivatives market consisting of; Forward contracts, Swaps, Forward Rate agreements, Barrier options.
The FX market is closely linked with the trading of securities, particularly bonds and money market instruments.
The participants include; Exporters / Importers, firms that operate internationally ,eventually converting into their home currency.
Investors,businesses own facilities, hold property or buy companies in other countries. These activities constitute direct investment. Investment also takes the form of investments within bonds, equities, or other securities denominated in foreign currency.
Speculators, buy and sell currencies solely to profit from anticipated changes in exchange rates.
Governments, may trade currency for the purpose of affecting exchange rates. A governments deliberate attempt to alter exchange rates between 2 currencies by buying one and selling the other is called intervention.
Herstatt risk, is the time zone risk, due to settlement factors.
Why exchange rates fluctuate in the short term is due to the latest news, proposed legislation, fiscal, monetary, economic data, etc. However the "fundamental" drivers of value and therefore the "price" are "Real interest rates".
The mechanism by which real interest rates affect exchange rates is known by "Covered interest arbitrage"
This will at any given time result in the "Covered interest parity"
Now from your previous posts there would seem to be some inconsistencies regarding the underlying philosophy of your methodology.
Quote;
"The concept of “value” really has no place in this trading technology. Bond Traders care about value – Real Estate investors care about value – Derivative Speculators care about value – Venture Capitalists care about value – M&A Specialists care about value…. I don’t care about value. I care about Movement. Nothing more and nothing less."
Now from my previous brief descriptions regarding the function of the market it is plain to see that valuation does matter within the structure of the market. The structure being now defined as "price data points" These price data points will privide a real value return to the investor. They form historical data within the market forming a value structure.
Quote;
"Valuations are not at the core of what the system does. At some point, if I’m going to make money in the market, I’ve got to actually pull the trigger on executing the trade. Trading is less about trading than it is making decisions. Let me repeat that another way: Trading is not about trading, it is about making decisions.
The decision to execute has to be based on a premise. The premise can only be based on what I understand about the expected outcome of the trade. The expected outcome of the trade is the premise revealed. I cannot make a good decision in a vacuum (i.e., without a sound premise). Therefore, I always have four (4) choices:"
As valuations are not core to the system, you are speculating on price volatility and the short term trend of price to trend in a direction for an indeterminate amount of time. This must be true as you claim not to calculate value, therefore you will not arbitrage, you seek movement, therefore by definition you need price to trend in a consistent direction for a period of time. You have given examples of 150pip direction,(ie. a trend of 150pips ) as a target that is predicted via your model. I am assuming a non-hedged position here......and this must in point of fact be true as if you were hedging a position, then 3-10pips would be your range give or take.
Quote;
The Decision Support System (DSS) module of the system is responsible for managing the details of the of the “quality” or “condition” of the currently dominant trajectory. This is why in volatile markets, I am able to make the entries and the exist at relatively close approximations to the actual morphing position of the Trajectory itself. The identity of the actual pivot is inside the transitional phase of the two trajectories. In other words, the system already has the DNA of the Trajectory typed, mapped and stored in the system database. When it comes across a trajectory transitional phase, it sees the distinctions between the two trajectory types, maps the transitional characteristics to a historically significant probability and then throws the “decision” light to the screen"
Quote;
Sure, when I’m running up pip totals as the “close price” moves either up or down the time-scale, one might say that I’m moving with the “trend”. That may, or may not be true – it depends on which Trajectory I happen to be trading at the time. It could be the Short Trajectory, or it could be the Long Trajectory. Now, here is something that is really going to blow some minds:
I can actually trade the Subordinate Trajectory, and STILL net a hefty gain on the trade.
This means that no matter which direction I trade in (Long or Short), on almost any given day (there are conditional concerns of course), I can still net a very respectable profit as long as I enter the trade at the right location within the Price Structure AND as long as the Price Structure itself remains intact, which is a known quantity long before I ever enter the trade."
This would just confirm that you are in point of fact taking a directional trade for a predictive pip total. The right location within a trade would indicate inflection points, or pivot points, or support / resistance points from a more orthodox trading terminology. This methodology is well known and understood, the accuracy and reliability of these points is open to much debate however.
Quote;
Reoccurring fundamental new vectors will always be a part of the model (see my explanation above). The question is, how does that news get encoded into the system via the news vector key. Remember, I do not view all news to be the same, the system categorizes and the types the news into relationships. Those relationships are then used as inputs to the MetaBrain™, as described earlier."
You cannot avoid macro-economics if you are a trader or an investor in the Forex. Its impact is there whether the trader/investor knows it or not, desires it or not, likes it or not, or understands it or not. It cannot be avoided or filtered out under any circumstances. Especially, in the Forex, macro-economics plays a major role in the direction of “price”. It is a very entrenched component of the “market”.
Quote;
Applying mathematics to patterns and getting the results as seen above is far more important to this technology than theorizing about which Fundamental factor “might” impact the trade today. Being “aware” of the Fundamentals is very important. But, that does not build the tactical decision basis for making the trade in the first place. Fundamental factors have their place and Technical factors have their place in the market. Which is why this trading technology uses b
Fundamental news vectors imply a "valuation" is calculated. Macro-economics implies that a value has been calculated. Now we know that this is in point of fact incorrect as I have queried this previously.
Therefore, ( an assumption ) the history of past "news" of the same "type" or content has been analysed to "probable" outcome, not in a valuation context, but an impact upon short term beta and psychology. This of course is not a valuation, it is irrational, emotional, and momentum based. It will result in trends that drive substantial overvaluations and undervaluations. And as such relies not upon a quantitative analysis of the facts, but a qualitative analysis of the human psychology. This contradiction and inconsistency would give me pause for thought.
The news vector that does the damage would therefore be the news that would revise the underlying fundamentals ( value) in a way that would impact the current valuation, or imply a serious change in underlying fundamentals.
Quote;
The historical data contains all news vectors that have ever impacted the landscape of the currency pair. All news classified by the system as “Parity”, is already accounted for. Only Non-Parity news cannot be accounted for. But, saying that the system is flawed because it cannot account for Unexpected News, is like saying that an atmospheric High Pressure system is flawed because it cannot account for the atmospheric Low Pressure system that is about to occlude it. The warm are mass had no prior knowledge of the cold air mass or the occluded front that was about to up-root it and change its structure."
No not flawed, just imperfect. There simply is not a perfect system as the future is an unknown quantity. Analysis is concerned primarily with values which are supported by the facts and not those which depend largely upon expectations . In this respect the analyst's approach is diametrically opposed to that of the speculator, meaning thereby one whose success tuns on his ability to forcast or to guess future developments. Needless to say, the analyst must take possible future changes into account, but his primary aim is not so much to profit from them as to guard against them. He views the business future as a hazard which his conclusions must encounter rather than as the source of his vindication.
Quote;
For the value investor – maybe. Traders on the other hand don’t have the same event horizons as investors (much shorter time segments), therefore, the accuracy of the “decision” to enter/exit a trade needs to be much higher than the investor."
The need to be right time after time, possibly several times a day puts an immeasurable strain upon the system, and possibly the trader who will need to make the final decision as to jump or stay. This exponential increase the reduction of margin for error, is the reason for the vast failure rate in daytrading generally, it remains to be seen if the decision and recognition process can be automated, as this is clearly the intent of your proprietary methodology. When I say automated, we are really talking about artificial intelligence now. This is leading to the conceptual theory of "Efficient Market" where all decisions are rational, and based on an understanding of the values. This would by definition eliminate profit opportunity, as at any given moment the information, values, are all calculated, the moment new information that was fundamentally important hit, the fastest execution would profit.
Quote;
That simply blows my mind to bits. It makes absolutely no sense at all, when all that same “investor” has to do is study the Forex and it’s very long term (10-15 year swings) and capture at least 500% net return over the same time frame and there would be no more “money management headaches” than there would be in worrying about whether or not your Mutual Fund Manager was going to lose you money for you."
These are driven by the fundamentals, it becomes a moot point that you must be able to analyse, understand, and select the correct investment to profit from any decision. This has always been, and probably remains a big ask.
Quote;
That’s because they are busy trying to calculate “value”, when they should be focused on Trajectories. They are bound by rules of analysis that I am not bound by. They are trapped inside a 33 year old technical analysis world view, and I am not. They are bounded by self-inflicted rules of “Risk Management”, and I am not. I have re-written my own personal views on “Risk”. They must be extremely conservative in their approach to profit and revenue, while I am extremely liberal in my approach in relative terms. I can be because my model for growth is base in the technology that I use and therefore, I am free to think outside the box. Most “professionals” in this business cannot."
While it may be argued that you have indeed rewritten the rules on "technical analysis", and that will be proven or not as the case may be in the fullness of time, you have not yet made a case for the suspension of valuation as a methodology for profiting from the financial markets. The FX, in the longer time frames will still conform to its "Structure, as governed by its function"
Quote;
If it were that imperfect and that seriously flawed, Well Fargo Bank would not “risk” $318 million per day in the Forex. Macro Funds, Micro Funds, International Banks, and large scale players all use the same data and they all come to the Forex to conduct business on a daily basis. $1.5 Trillion per day (more than 3 times that of the NYSE, NASDAQ and AMEX combined) would not flow through this global machine if those who make up the Interbank community thought the reality was too imperfect and too flawed"
Unfortunately, banks now seek to derive revenue from speculative trading. They accept that risk is present, and seek to manage that risk via risk management plans. These are sometimes up to the task, and at others, sadly lacking, viz, Barings and National Australia Bank recently, also China Petroleum Company disclosed heavy FX losses from poorly managed risk.. The point being, that the banks embrace risk, to drive revenue, quite different from saying there is no risk as the data is not corrupted by speculation, as quite clearly it is.
Quote;
This is a Hybrid Trading Technology that uses both Technical AND Fundamental inputs. The Fundamental inputs come from the market in either expected or unexpected form. The Technical inputs are new and not related to old TA. I understand Fundamental “valuations” perfectly fine – and that is the main reason why I think they are a waste of my time. They don’t help with Timing, Direction, Magnitude and Probability anywhere near the same degree as the technology within this trading solution does on a routine basis."
From a purely daytrading perspective I would have to agree, however from the standpoint of making and keeping a substantial profit, I must seriously disagree. And it is about earning a return on invested capital.
Quote;
“My business partner, was for 20yrs the head FX trader at Citibank with a $100M daytime limit……..he uses technical analysis.”
------------
Which Technical Analysis? They are not all created equal."
He uses vertical red,green,yellow and orange lines.They are spaced at a specific timeframe apart, and traded upon a cyclical analysis.
Quote;
This trading technology is not about “Value Investing”. Value Investing is very slow. It is at least one universe away from what this trading technology does. It is like taking a grand of sand and using it to fully describe an orange. It is not even an apple to orange question. It is worse than that. Two entirely different worlds that approach the problem from entire different perspectives. The cannot be compared along any other line outside of results. And, I just don’t see any value investor in the Forex even remotely approaching the same level of results (as seen above).
Besides, how many Day Traders use “Value Investing” methodologies? Investing is worlds apart from Trading.
Value investors in the FX, well Warren Buffett is $600M short the USD from 2yrs ago, I guess he just liked the look of the chart, but seriously, Buffett is an exception, however if more people had his acumen, more people would have wealth. As to daytraders utilising value, probably none........but how many daytraders make money?
Quote;
“Now this example is not pertinant to currency, and I would never trade currency for that very reason. The difficulty of analysis and accuracy of analysis must be seriously questioned.”
----------------
Ok – thanks – I was getting a little bit concerned that you would actually use this approach to Day Trade the Forex!"
No, but let me supply you with a calculation for trading the FX;
Let,
E = expected earnings (GDP)
R= expected growth rate
Y= current Yield on AAA Bonds........then
E(2R + 8.5 ) * Y/4 = intrinsic value of the currency.
Cheers d998
7thSignalTrader
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“Now from my previous brief descriptions regarding the function of the market it is plain to see that valuation does matter within the structure of the market.”
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You say that there are inconsistencies in my trading system, but none are ever shown in your replies. Not sure why?
Who’s valuation? How many primary, large scale players/participants are there in the Forex jockeying for position for various reasons and various purposes? What are their valuations at 0800 GMT, 1100GMT, 1315GMT, etc?
Because other market participants use, rely upon and administer valuation based trading mechanisms, does not require that another trader or market participant do the same, or use the exact same valuation concepts that everyone else uses. That does not mean that there are any inconsistencies in the views of those who do not use the same valuation methods. To force a market participant to use the exact same valuation methodologies that everyone else uses, would eventually lead to a rather inefficient market that no one would want to trade. There would still be structural participants who use the Forex for other purposes, but the trader would soon go away.
Not every participant in the Forex is there to make a profit on ever single transaction. This is part of the structure of the market. Some large scale players (banks and other large financial institutions) are there for the Compensating Balances effect that the Forex provides as a hedge of sorts against other non-performing or underperforming assets in other portfolios of various kinds.
Because of the underlying differences in currencies (exchange rates), a bank can do a fine job of off-setting the poorer performance of other instruments where they have capital invested, by setting up a compensating balance effect through the buying and/or selling of their natural currency, or that of another country – whether they make a profit or not is not important to them in this regard. They are able to establish a sufficient compensating balance, and that is why they might buy/sell any particular currency at any given time – it would depend on the performance of their other portfolios.
Here’s a better example of valuation distinction:
In the NFL on Super Bowl Sunday coming up this January, there will be millions of bets being placed on the game through various booking sources. Some will be Long the AFC, some will be Short the AFC (the same for the NFC). On the playing field there will be “valuations” being made for the 60 minute bet that others will be placing. Quarterbacks will be “evaluating” the respective Defenses on the field. Defensive Coordinators will be making “valuation” decisions about the Offense on the field, but they will be making their valuations from a different vantage point – in the booth well above the playing field. Each player (all 22 of them) will be making real time valuations about individual players and individual situations on the field.
Everyone engaged in the process of making decisions that will give them an advantage in the game will be making valuations about various aspects and from various locations within the stadium itself.
Yet, the Joe Sixpack in Reno or Las Vegas, sitting down inside the Casino, who’s not on the playing field and not inside the stadium and not part of the game plan on the field, could give a hoot about the valuations being made inside the stadium by those who provide the structure that everybody else bets on. Joe Sixpack is doing his own “valuation” of the game, but it has absolutely nothing to do with the Double Ace Right – Blue Shift – Z Check With Me on 2, call that the Quarterback just made inside the Red Zone during a 3 and long call on the field that was handed down to him from his Offensive Coordinator who is sitting several hundred feet away from the field and high above the stadium floor.
Multiple “valuations” being made at the exact same time inside the exact same arena, but from very different vantage points, while Joe Sixpack could care less.
Joe Sixpack is monitoring the situation from a completely different perspective and with a completely different motive associated with his valuation. Joe Sixpack does not care about the Wells Fargo Compensating Balance entry made for $105 million dollars at 0831 GMT. Or, the BOJ intervention move at 1220 GMT of $700 million. Or, the RCB dump of USD on the market to adjust their foreign holdings down below 49%. Joe Sixpack uses a methodology (if you insist on referring to it that way) that takes all of these market gyrations into consideration and then he applies an additional layer to filter them in his own unique way.
Joe Sixpack has a completely different perspective AND reason for being involved, and therefore his task is not to try and figure out what call the Quarterback will make next, or what defense the Defensive Coordinator will use next, or what skilled position substitution the coach will make next from the sidelines. No – Joe’s job is to use the historical statistics, facts, figures, empirical evidence and current real-time information just before kick-off AND inside a completely different model, to get an understanding of whether or not he will take the AFC, or the NFC.
With trading, I have the ability to set stops and limits and control to some extent the final outcome. Which you don’t get with a bet on the Super Bowl.
So, there is no inconsistency in my model. Rather, a misunderstanding of how I apply it – which is to be expected – there is a massive amount of information that I have not talked about.
“As valuations are not core to the system, you are speculating on price volatility and the short term trend of price to trend in a direction for an indeterminate amount of time.”
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No. I might suggest a re-reading of what I posted. Several times, I’ve said that I don’t trade trends. On more than one occasion, I’ve indicated that I trade Trajectories and I’ve stated more than once that this trading technology has the ability to calculate the Magnitude of that Trajectory. The time for how long a Trajectory lasts, is not relevant to this system. The relevance to this system is the length of the Trajectory and not its time in one direction or the other.
The Timing aspect of this system is directly proportional to the Magnitude of the Dominant Trajectory and inversely proportional the Subordinate Trajectory. Therefore, when I’m following the system’s recommendations, the length of the Trajectory is already known before the trade is made within 20 pips on average. It is a very simple Draw-Down factor per entry and it is a variable that is calculated by the system in real-time.
All traders and market participants whether they make their decisions based on traditional methods of “valuation” or not (which I do not) – use speculation to some degree in their trading models. There is no such thing as a trader who does not speculate in the Forex, as I’ve also stated on several occasions.
“This must be true as you claim not to calculate value, therefore you will not arbitrage, you seek movement, therefore by definition you need price to trend in a consistent direction for a period of time.”
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No. I don’t use traditional and/or conventional forms of valuation in this system – that is correct. However, every trader has to use some form of value in their trading methodology. I just don’t use the same tools, nor do I place the same emphasis, nor do I use the same “definition” of valuation that the rest of the market uses. There are “values” in numeric form all over this system. In fact, this system is all about Numbers, Mathematics and Logical Statements that generate Plain Text Messages generated in English and Numerical “values” that are part of the Decision Support Infrastructure.
So, I use “numerical numbers” extensively – I just don’t use a standard, formal, and/or conventional market valuation schemes that others use when they speculate where the price is going next. This system utilizes a different approach to viewing and assessing the market. So, language like traditional valuations, and trends have no meaning here.
“This would just confirm that you are in point of fact taking a directional trade for a predictive pip total. The right location within a trade would indicate inflection points, or pivot points, or support / resistance points from a more orthodox trading terminology. This methodology is well known and understood, the accuracy and reliability of these points is open to much debate however.”
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For those who use Pivot Points, Resistance & Support Levels and all the other orthodoxy, conventional and traditional TA tools, that statement might true. Since I don’t use any of that, the statement does not apply, here. It only applies if you use it.
Here’s an example of the distinctions – conceptually:
I use Enhanced Synthetic TCD’s which are Transequential Contiguous Delta’s. I use Direction Finder Dimensions and Pointers. I use Enhanced Trajectory Ratio’s in the form: Internal, External Real-Time, and External Tactical. I use Enhanced Distinct Vega. I use a 5 Day Micro Trajectory Cluster. I use TCD Exception Markers. I use TCD Frequency Markers. I use an A4D Contrarian along with an LVF and SVF Functions as inputs. I use Target Probability Look-ups. And, at least 590 other non conventional and un-traditional technical analysis creations that cannot be found in any TA book on the market. This does not even scratch the tip of the iceberg.
So, the reliability exists within separate domains and is based on different things. If conventional TA was as reliable, I would be using it in my creation. Since it is not – I don’t see the need to degrade my system with underperforming indicators and tools.
“Fundamental news vectors imply a "valuation" is calculated. Macro-economics implies that a value has been calculated. Now we know that this is in point of fact incorrect as I have queried this previously.”
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Who said that, “fundamental new vectors imply a valuation is calculated?” Also, who said that macro-economics implies that a value has been calculated? You are saying that it is in point of fact incorrect, but I don’t see where anyone made that conclusion in this thread? Can you show where these two conclusions were actually made?
“Therefore, ( an assumption ) the history of past "news" of the same "type" or content has been analysed to "probable" outcome, not in a valuation context, but an impact upon short term beta and psychology. This of course is not a valuation, it is irrational, emotional, and momentum based.”
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No. It is not a conventional “valuation”. And, no – it is not irrational, emotional and momentum based. This is a partial understanding of a much bigger concept that cannot be relayed in a few internet posts. You are missing the bigger picture and thus the full probability equations (algorithms), so you can’t possibly have a full understanding of exactly how probabilities inside of this trading technology work, or how they are calculated. I’ve only given you conceptual information in an attempt to describes “some” aspects of the system. You don’t have total knowledge about this system and therefore cannot make valuations about the systems capabilities are efficacy. You’re just not in that position.
However, I have given some information that describes certain aspects of how the system works, which is all I can do without giving away about 5 years worth of work, and that is not very probable to happen. In reality, the News Module in this system works very well and I’m more than happy with the results. It is only part of the probability equation and not the entire equation itself. However, it is one of the most sensitive components of the system in terms of how much detailed information that I will release to the public.
“It will result in trends that drive substantial overvaluations and undervaluations. And as such relies not upon a quantitative analysis of the facts, but a qualitative analysis of the human psychology. This contradiction and inconsistency would give me pause for thought.”
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Well, it should – because it is a gross misunderstanding and over-generalization of what I’ve already posted. I works just fine for me – but I have the benefit of using it every day and the particularly interesting vantage point of having been the designer. So, I probably can see things from a height that others will not – simply because they don’t know enough about the technology.
Again, I can only communicate so much and it would behoove the one truly interested in understanding the tool, to avoid making over-generalizations about it without having the benefit of knowing the Mathematics and Logic behind its structure, as well as all of the inputs that go into generating the trading output.
“The news vector that does the damage would therefore be the news that would revise the underlying fundamentals ( value) in a way that would impact the current valuation, or imply a serious change in underlying fundamentals.”
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Impact who’s current valuation and why does that matter to this trading technology? And, does “serious change” in the underlying “fundamentals” equate to a change in the Price Structure? If so, to what degree will the Price Structure change and how does that impact the current trade decision to Hold, or take the Loss?
The key here is the Price Structure which defines that parameters of the trade for a hyper-short-term period of time. Much of the effects that you allude to, are longer term in nature and may or may not have detrimental impact on the Price Structure at any given point along the Trajectory.
The news vector only does permanent damage when it destroys the Price Structure making the normative recovery process impossible, or beyond the difficulty level that I am willing to accept as a trader of this technology. Otherwise, adverse news can be such that a full recovery is not only possible, but highly probable. Knowing this, saves me a tremendous amount of money when I don’t bail out of a trade that most other traders who entered near the same price point – will.
Knowing the location and condition of the Price Structure alone – can save the average trader thousands, hundreds of thousands or even millions of dollars in unnecessarily lost profits due to ill-timed bail-outs after adverse news. This is why categorizing, classifying and codifying the various news vectors work so well in this system.
“No not flawed, just imperfect. There simply is not a perfect system as the future is an unknown quantity.”
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True. However, if nothing more than a “simple” profit is required to define success in trading – then I can most assuredly come to within 99.999% of a 100% perfect solution. To wit: I have a side project running. It has been running for exactly 25 months 1 week and 3 days (at this typing). It is a simple profit trading plan that has not lost money since inception. It uses no price targets and it has no minimum design criteria like my prototype has. All that is required is that the trade nets a simple profit. As of 12/21/04, it has not failed one single time to do that task.
So, when you say that perfection does not exist – I would have to disagree. It really all depends on how you define Accuracy in your trading, which is exactly what my very first post on this forum was all about. And, precisely the reason why I selected that topic as my very first post here – just to see what people really understand about trading – an experiment of sorts.
By the way – this 25 months old test is very easy to do. On the day that it fails to make a simple profit, I’ll come back to this forum and post that failure – but I think that will be years down the road given the data that I’m looking at.
When you say perfect, you obviously mean to a significant profit target. But, then again – who’s definition of “significant” are we talking about? If all one needs to do is maintain a few billion dollars, or a few hundred million dollars, then one does not need ANY trading system at all. All one needs to do is wait until a specific time of the week and enter a trade in ANY direction and that trade will net a simply profit about 100% of the time – according to the results that I’m getting from this little side project that I have working right now.
Perfection is therefore, in the eye of the beholder.
“Analysis is concerned primarily with values which are supported by the facts and not those which depend largely upon expectations .”
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But, that is exactly what this is not. This is not a Trend Following Analysis. One would have to simply “let go” of that way of thinking. This is a Predictive Model and therefore, the use of expectations is highly desirable – in fact, absolutely necessary. How can a system “predict”, without taking as input into its calculations, that which is an expectation? That would be like saying that the Golden Gate Bridge can take you across the water without a span.
I look at this type of analysis as being an examination of the facts, and not one looking for support from the facts. In a Predictive Model, the model itself is really responsible for projecting certain “facts” before they actually enter the physical world. This is the essence of Predictive Models – to bring about some kind of probability for future events that have yet to happen.
“He views the business future as a hazard which his conclusions must encounter rather than as the source of his vindication.”
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I’m sorry, but I view the Forex as a place where I plan to blow the doors off of Bill Gates hold at the top of the billionaires list in the U.S. I view the business future as an opportunity to be explored to the fullest extend humanly possible. I do believe in a place called “perfection”. I do believe that it can be accomplished with the right amount of faith, hard work, smart work, patience, diligence, and a systematic approach to always improving upon what you already have.
There is no way that I would have a 93% to 98+% (it changes depending on the last trade) accurate to a specified target trading system if I did not believe that “perfection” was possible. I’ve had many reasons to quit many years ago, but if I had, I would still be just a mediocre trader obtaining average results at best. It was the believe in conquering the impossible that has got me where I am today – among the top traders in the world in terms of accuracy and consistency and profitability on a per trade percentage basis.
“The need to be right time after time, possibly several times a day puts an immeasurable strain upon the system, and possibly the trader who will need to make the final decision as to jump or stay.”
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It sure does and that is why I typically only make 3-4 trades per week! I’m not a purist. I don’t sit down at my machine and go after 7 pips here, and 10 pips there, although some people do. I personally think that it nuts – to be quite honest with you.
Instead, I am a Trajectory Hunter (or, the system is). I look for the “next” Trajectory (or, the system does) and then I get into position. Each currency pair is different in terms of its Magnitude. However, the system is designed to capture a minimum profit per trade which is based on the historical and empirical evidence shown in the pair since the inception of the Retail Forex Market.
Right now (as of 12/21/04), the EURUSD has a Daily Magnitude of 122 pips. But, its Long Trajectory has daily Magnitude of 84 pips, and its Short Trajectory has a daily Magnitude of 75 pips (all Strategic numbers). Now, there are two additional sets of the same value points but they are calculated differently – they are Tactical Values and Real-Time Values. Or, put another way – the system has three (3) different types of Trajectories: Strategic (which I just gave you), Tactical and Real-Time.
Inside the engine these Trajectories are called TCD or Transequential Contiguous Delta (core system indicators), and there are six (6) of them one for each trade type (Long and Short). So, when I trade, I’m going after these pip classifications as minimums. I put the minimum design profit just under these classifications, so as not to place too much stress on the system. Day trade minimums are 50 pips, so you can now see how I can do this as they fit nicely under the strategic, tactical and real-time TCD numerical values. This is all part of the Enhanced TCD Double Helix Module.
“This exponential increase the reduction of margin for error, is the reason for the vast failure rate in daytrading generally, it remains to be seen if the decision and recognition process can be automated, as this is clearly the intent of your proprietary methodology.”
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Automating it all – yes. Allowing for 50 billion trades per day – no. I’ve never found any real benefit to inflicting that kind of massive headache on myself. Besides, when you understand TCD’s and Price Structures, you really don’t have the need to engage in so many trades on a daily basis. Some day’s I don’t even make a trade because there are no signals with a high enough probability – so I just pass and wait for higher probability numbers.
“These are driven by the fundamentals, it becomes a moot point that you must be able to analyse, understand, and select the correct investment to profit from any decision. This has always been, and probably remains a big ask.”
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The point is the ease with which one can boost their annual returns over what their Mutual Fund Manager is getting them – that’s the things that blows my mind. The Forex has got to be one of the easiest trades to make for an Investor with a 5-10-15 year event horizon.
Example: The EURUSD is right now running inside of an approximate 10 year, 4000+ pip range that is fairly predictable. It is now nearing that high point again – which is where it was some 10 years ago. If I were a long term trader, I could pick up at least 2000 pips (being very conservative) on the EURO to the downside at some point during the same amount of time into the future. The dollar simply cannot get much weaker against the Yen, and the EUR before both Japan, Europe and the U.S. begin to turn the currencies (through policy actions) around. Sometimes the pattern snaps at 5 years and the recycles back to a 10 year pattern.
So, if I were a long term investor in the Forex – I’d be getting ready to Short the EURUSD – just not quite yet. There is still some topside of about 800 to 1000 pips left in this EUR bull run on a much shorter time frame. How far ahead of the game would the typical Mutual Fund Investor be with a cool 2000 pip run on the EURUSD, as compared to the 15% per year they get from the stock market.
That was my point.
“While it may be argued that you have indeed rewritten the rules on "technical analysis", and that will be proven or not as the case may be in the fullness of time, you have not yet made a case for the suspension of valuation as a methodology for profiting from the financial markets.”
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Nor, do I want to! I need those people in the market doing their “valuations” and moving the marketing up and down, or just sideways. I’m not trying to shoot my meal ticket (LOL!) I need those who bring “order” to the market. I can’t do what I do without their “order” conduct.
So, I will never be making the case that conventional valuations should be suspended. However, I have made the case that I simply don’t need to do exactly what they do, in order to profit consistently and accurately.
“Unfortunately, banks now seek to derive revenue from speculative trading.”
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Be very careful, here. Not all of them do. See my examples of “Compensating Balances”. They use it as a hedging device, too. Not only to make a profit and in some cases they don’t immediately turn a profit – but they might be holding a currency that is doing better than there own homeland paper. This could give then an off-set they the otherwise would not be able obtain with their overly inflated paper, or overly devalued paper in the short-term.
“From a purely daytrading perspective I would have to agree, however from the standpoint of making and keeping a substantial profit, I must seriously disagree. And it is about earning a return on invested capital.’
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What else can a highly accurate trading system for Day Trading and Swing Trading do, other than make and keep substantial profits? That’s my goal. I can’t speak for anyone else. My goals are to make and grow by geometric proportions, and substantial account balance. The only way that I know to do that is to trade efficiently which means doing so with a high degree of accuracy to a substantial target, rolling over a high percentage of profits into the next trade (I personally roll 100% for now because I simply don’t need the money to live off of), and then repeat with consistency that same process.
Isolated and individual Fundamental “valuations” don’t help me in this regard when using this trading technology. It might help me if I were using something else, but I would not be in the Forex with any other tool simply because I have not found one that works as well, or that I am as comfortable with. I have not seen one that is as precise, or as accurate, or as consistent as this one – so, I can only speak to this system – and – under it, no individual and isolated fundamental “valuations” are required. They don’t even make sense in this environment – there’s no where to plug them in, other than that which is already accounted for in the historical data.
“He uses vertical red,green,yellow and orange lines.They are spaced at a specific timeframe apart, and traded upon a cyclical analysis.”
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If they are vertical lines, then they are definitely time based TA tools. And, if they are time based conventional TA tools, then they must be tweaked by him to yield specific buy/sell/hold recommendations. Most conventional TA has at its core some form of mathematical averaging concept. The vast majority of traditional TA falls into this category – which is why the vast majority of all TA lags behind my TA – basically, can’t see far enough down the road to make any projections with any real degree of clarity that my profiles contain (when I post them – have not done that here – only parameters with a trade signal).
“Value investors in the FX, well Warren Buffett is $600M short the USD from 2yrs ago, I guess he just liked the look of the chart, but seriously, Buffett is an exception, however if more people had his acumen, more people would have wealth.”
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Yeah, but that’s cheating – invoking Buffett is like invoking King Kong at the local zoo. The guy is extraordinarily amazing. Besides, he’s not a day trader and that is a very long-term event horizon. It is also a very powerful trade!
I have every intention of catching Mr. Buffett and Bill Gates at the top of America’s billionaire list. Not, to make a name for myself, but just to validate my work as being beyond reproach. I have a long way to go, but I have already driven my revenue model through several 56 trade cycles and it worked just fine using a 30/30/100 formula (30% net return per trade, 30% of total account balance used as per trade cost basis and reinvesting 100% of al profits for X number of trades required to reach $1 million). I’ve only done this once using the new 50/30/100 formula and I am working on number two (a test run) right now.
So, my trades are only in the low 7 figure range for now – no where near Mr. Buffett, but if I follow the revenue model and do what this system tells me to do and only take high probability trades, then I fully expect to get on that list some day in the not so distant future. You have to believe you can, or you won’t. You also have to have a solid tool.
“As to daytraders utilising value, probably none........but how many daytraders make money?”
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Correct.
“Let,
E = expected earnings (GDP)
R= expected growth rate
Y= current Yield on AAA Bonds........then
E(2R + 8.5 ) * Y/4 = intrinsic value of the currency.”
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But, this is a Predictive Model. The word expected shows up twice. Expected growth rate of what – the earnings themselves? Also, current yield on A3B’s, which ones - are you talking about the street’s aggregated estimate – or do you just pick one? You can’t be just picking one – so it has to be the listed/tracked aggregate.
How frequently does this generate a Trade Signal? And, can you calculate the Probability for the target (your Intrinsic value of the currency) to be struck before the trade? Lastly, what is the time-line for such a trade? In other words, when you back-tested this Model against historical data, what was the average holding period before the target (intrinsic value of the currency) was struck?
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You say that there are inconsistencies in my trading system, but none are ever shown in your replies. Not sure why?
Who’s valuation? How many primary, large scale players/participants are there in the Forex jockeying for position for various reasons and various purposes? What are their valuations at 0800 GMT, 1100GMT, 1315GMT, etc?
Because other market participants use, rely upon and administer valuation based trading mechanisms, does not require that another trader or market participant do the same, or use the exact same valuation concepts that everyone else uses. That does not mean that there are any inconsistencies in the views of those who do not use the same valuation methods. To force a market participant to use the exact same valuation methodologies that everyone else uses, would eventually lead to a rather inefficient market that no one would want to trade. There would still be structural participants who use the Forex for other purposes, but the trader would soon go away.
Not every participant in the Forex is there to make a profit on ever single transaction. This is part of the structure of the market. Some large scale players (banks and other large financial institutions) are there for the Compensating Balances effect that the Forex provides as a hedge of sorts against other non-performing or underperforming assets in other portfolios of various kinds.
Because of the underlying differences in currencies (exchange rates), a bank can do a fine job of off-setting the poorer performance of other instruments where they have capital invested, by setting up a compensating balance effect through the buying and/or selling of their natural currency, or that of another country – whether they make a profit or not is not important to them in this regard. They are able to establish a sufficient compensating balance, and that is why they might buy/sell any particular currency at any given time – it would depend on the performance of their other portfolios.
Here’s a better example of valuation distinction:
In the NFL on Super Bowl Sunday coming up this January, there will be millions of bets being placed on the game through various booking sources. Some will be Long the AFC, some will be Short the AFC (the same for the NFC). On the playing field there will be “valuations” being made for the 60 minute bet that others will be placing. Quarterbacks will be “evaluating” the respective Defenses on the field. Defensive Coordinators will be making “valuation” decisions about the Offense on the field, but they will be making their valuations from a different vantage point – in the booth well above the playing field. Each player (all 22 of them) will be making real time valuations about individual players and individual situations on the field.
Everyone engaged in the process of making decisions that will give them an advantage in the game will be making valuations about various aspects and from various locations within the stadium itself.
Yet, the Joe Sixpack in Reno or Las Vegas, sitting down inside the Casino, who’s not on the playing field and not inside the stadium and not part of the game plan on the field, could give a hoot about the valuations being made inside the stadium by those who provide the structure that everybody else bets on. Joe Sixpack is doing his own “valuation” of the game, but it has absolutely nothing to do with the Double Ace Right – Blue Shift – Z Check With Me on 2, call that the Quarterback just made inside the Red Zone during a 3 and long call on the field that was handed down to him from his Offensive Coordinator who is sitting several hundred feet away from the field and high above the stadium floor.
Multiple “valuations” being made at the exact same time inside the exact same arena, but from very different vantage points, while Joe Sixpack could care less.
Joe Sixpack is monitoring the situation from a completely different perspective and with a completely different motive associated with his valuation. Joe Sixpack does not care about the Wells Fargo Compensating Balance entry made for $105 million dollars at 0831 GMT. Or, the BOJ intervention move at 1220 GMT of $700 million. Or, the RCB dump of USD on the market to adjust their foreign holdings down below 49%. Joe Sixpack uses a methodology (if you insist on referring to it that way) that takes all of these market gyrations into consideration and then he applies an additional layer to filter them in his own unique way.
Joe Sixpack has a completely different perspective AND reason for being involved, and therefore his task is not to try and figure out what call the Quarterback will make next, or what defense the Defensive Coordinator will use next, or what skilled position substitution the coach will make next from the sidelines. No – Joe’s job is to use the historical statistics, facts, figures, empirical evidence and current real-time information just before kick-off AND inside a completely different model, to get an understanding of whether or not he will take the AFC, or the NFC.
With trading, I have the ability to set stops and limits and control to some extent the final outcome. Which you don’t get with a bet on the Super Bowl.
So, there is no inconsistency in my model. Rather, a misunderstanding of how I apply it – which is to be expected – there is a massive amount of information that I have not talked about.
“As valuations are not core to the system, you are speculating on price volatility and the short term trend of price to trend in a direction for an indeterminate amount of time.”
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No. I might suggest a re-reading of what I posted. Several times, I’ve said that I don’t trade trends. On more than one occasion, I’ve indicated that I trade Trajectories and I’ve stated more than once that this trading technology has the ability to calculate the Magnitude of that Trajectory. The time for how long a Trajectory lasts, is not relevant to this system. The relevance to this system is the length of the Trajectory and not its time in one direction or the other.
The Timing aspect of this system is directly proportional to the Magnitude of the Dominant Trajectory and inversely proportional the Subordinate Trajectory. Therefore, when I’m following the system’s recommendations, the length of the Trajectory is already known before the trade is made within 20 pips on average. It is a very simple Draw-Down factor per entry and it is a variable that is calculated by the system in real-time.
All traders and market participants whether they make their decisions based on traditional methods of “valuation” or not (which I do not) – use speculation to some degree in their trading models. There is no such thing as a trader who does not speculate in the Forex, as I’ve also stated on several occasions.
“This must be true as you claim not to calculate value, therefore you will not arbitrage, you seek movement, therefore by definition you need price to trend in a consistent direction for a period of time.”
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No. I don’t use traditional and/or conventional forms of valuation in this system – that is correct. However, every trader has to use some form of value in their trading methodology. I just don’t use the same tools, nor do I place the same emphasis, nor do I use the same “definition” of valuation that the rest of the market uses. There are “values” in numeric form all over this system. In fact, this system is all about Numbers, Mathematics and Logical Statements that generate Plain Text Messages generated in English and Numerical “values” that are part of the Decision Support Infrastructure.
So, I use “numerical numbers” extensively – I just don’t use a standard, formal, and/or conventional market valuation schemes that others use when they speculate where the price is going next. This system utilizes a different approach to viewing and assessing the market. So, language like traditional valuations, and trends have no meaning here.
“This would just confirm that you are in point of fact taking a directional trade for a predictive pip total. The right location within a trade would indicate inflection points, or pivot points, or support / resistance points from a more orthodox trading terminology. This methodology is well known and understood, the accuracy and reliability of these points is open to much debate however.”
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For those who use Pivot Points, Resistance & Support Levels and all the other orthodoxy, conventional and traditional TA tools, that statement might true. Since I don’t use any of that, the statement does not apply, here. It only applies if you use it.
Here’s an example of the distinctions – conceptually:
I use Enhanced Synthetic TCD’s which are Transequential Contiguous Delta’s. I use Direction Finder Dimensions and Pointers. I use Enhanced Trajectory Ratio’s in the form: Internal, External Real-Time, and External Tactical. I use Enhanced Distinct Vega. I use a 5 Day Micro Trajectory Cluster. I use TCD Exception Markers. I use TCD Frequency Markers. I use an A4D Contrarian along with an LVF and SVF Functions as inputs. I use Target Probability Look-ups. And, at least 590 other non conventional and un-traditional technical analysis creations that cannot be found in any TA book on the market. This does not even scratch the tip of the iceberg.
So, the reliability exists within separate domains and is based on different things. If conventional TA was as reliable, I would be using it in my creation. Since it is not – I don’t see the need to degrade my system with underperforming indicators and tools.
“Fundamental news vectors imply a "valuation" is calculated. Macro-economics implies that a value has been calculated. Now we know that this is in point of fact incorrect as I have queried this previously.”
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Who said that, “fundamental new vectors imply a valuation is calculated?” Also, who said that macro-economics implies that a value has been calculated? You are saying that it is in point of fact incorrect, but I don’t see where anyone made that conclusion in this thread? Can you show where these two conclusions were actually made?
“Therefore, ( an assumption ) the history of past "news" of the same "type" or content has been analysed to "probable" outcome, not in a valuation context, but an impact upon short term beta and psychology. This of course is not a valuation, it is irrational, emotional, and momentum based.”
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No. It is not a conventional “valuation”. And, no – it is not irrational, emotional and momentum based. This is a partial understanding of a much bigger concept that cannot be relayed in a few internet posts. You are missing the bigger picture and thus the full probability equations (algorithms), so you can’t possibly have a full understanding of exactly how probabilities inside of this trading technology work, or how they are calculated. I’ve only given you conceptual information in an attempt to describes “some” aspects of the system. You don’t have total knowledge about this system and therefore cannot make valuations about the systems capabilities are efficacy. You’re just not in that position.
However, I have given some information that describes certain aspects of how the system works, which is all I can do without giving away about 5 years worth of work, and that is not very probable to happen. In reality, the News Module in this system works very well and I’m more than happy with the results. It is only part of the probability equation and not the entire equation itself. However, it is one of the most sensitive components of the system in terms of how much detailed information that I will release to the public.
“It will result in trends that drive substantial overvaluations and undervaluations. And as such relies not upon a quantitative analysis of the facts, but a qualitative analysis of the human psychology. This contradiction and inconsistency would give me pause for thought.”
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Well, it should – because it is a gross misunderstanding and over-generalization of what I’ve already posted. I works just fine for me – but I have the benefit of using it every day and the particularly interesting vantage point of having been the designer. So, I probably can see things from a height that others will not – simply because they don’t know enough about the technology.
Again, I can only communicate so much and it would behoove the one truly interested in understanding the tool, to avoid making over-generalizations about it without having the benefit of knowing the Mathematics and Logic behind its structure, as well as all of the inputs that go into generating the trading output.
“The news vector that does the damage would therefore be the news that would revise the underlying fundamentals ( value) in a way that would impact the current valuation, or imply a serious change in underlying fundamentals.”
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Impact who’s current valuation and why does that matter to this trading technology? And, does “serious change” in the underlying “fundamentals” equate to a change in the Price Structure? If so, to what degree will the Price Structure change and how does that impact the current trade decision to Hold, or take the Loss?
The key here is the Price Structure which defines that parameters of the trade for a hyper-short-term period of time. Much of the effects that you allude to, are longer term in nature and may or may not have detrimental impact on the Price Structure at any given point along the Trajectory.
The news vector only does permanent damage when it destroys the Price Structure making the normative recovery process impossible, or beyond the difficulty level that I am willing to accept as a trader of this technology. Otherwise, adverse news can be such that a full recovery is not only possible, but highly probable. Knowing this, saves me a tremendous amount of money when I don’t bail out of a trade that most other traders who entered near the same price point – will.
Knowing the location and condition of the Price Structure alone – can save the average trader thousands, hundreds of thousands or even millions of dollars in unnecessarily lost profits due to ill-timed bail-outs after adverse news. This is why categorizing, classifying and codifying the various news vectors work so well in this system.
“No not flawed, just imperfect. There simply is not a perfect system as the future is an unknown quantity.”
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True. However, if nothing more than a “simple” profit is required to define success in trading – then I can most assuredly come to within 99.999% of a 100% perfect solution. To wit: I have a side project running. It has been running for exactly 25 months 1 week and 3 days (at this typing). It is a simple profit trading plan that has not lost money since inception. It uses no price targets and it has no minimum design criteria like my prototype has. All that is required is that the trade nets a simple profit. As of 12/21/04, it has not failed one single time to do that task.
So, when you say that perfection does not exist – I would have to disagree. It really all depends on how you define Accuracy in your trading, which is exactly what my very first post on this forum was all about. And, precisely the reason why I selected that topic as my very first post here – just to see what people really understand about trading – an experiment of sorts.
By the way – this 25 months old test is very easy to do. On the day that it fails to make a simple profit, I’ll come back to this forum and post that failure – but I think that will be years down the road given the data that I’m looking at.
When you say perfect, you obviously mean to a significant profit target. But, then again – who’s definition of “significant” are we talking about? If all one needs to do is maintain a few billion dollars, or a few hundred million dollars, then one does not need ANY trading system at all. All one needs to do is wait until a specific time of the week and enter a trade in ANY direction and that trade will net a simply profit about 100% of the time – according to the results that I’m getting from this little side project that I have working right now.
Perfection is therefore, in the eye of the beholder.
“Analysis is concerned primarily with values which are supported by the facts and not those which depend largely upon expectations .”
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But, that is exactly what this is not. This is not a Trend Following Analysis. One would have to simply “let go” of that way of thinking. This is a Predictive Model and therefore, the use of expectations is highly desirable – in fact, absolutely necessary. How can a system “predict”, without taking as input into its calculations, that which is an expectation? That would be like saying that the Golden Gate Bridge can take you across the water without a span.
I look at this type of analysis as being an examination of the facts, and not one looking for support from the facts. In a Predictive Model, the model itself is really responsible for projecting certain “facts” before they actually enter the physical world. This is the essence of Predictive Models – to bring about some kind of probability for future events that have yet to happen.
“He views the business future as a hazard which his conclusions must encounter rather than as the source of his vindication.”
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I’m sorry, but I view the Forex as a place where I plan to blow the doors off of Bill Gates hold at the top of the billionaires list in the U.S. I view the business future as an opportunity to be explored to the fullest extend humanly possible. I do believe in a place called “perfection”. I do believe that it can be accomplished with the right amount of faith, hard work, smart work, patience, diligence, and a systematic approach to always improving upon what you already have.
There is no way that I would have a 93% to 98+% (it changes depending on the last trade) accurate to a specified target trading system if I did not believe that “perfection” was possible. I’ve had many reasons to quit many years ago, but if I had, I would still be just a mediocre trader obtaining average results at best. It was the believe in conquering the impossible that has got me where I am today – among the top traders in the world in terms of accuracy and consistency and profitability on a per trade percentage basis.
“The need to be right time after time, possibly several times a day puts an immeasurable strain upon the system, and possibly the trader who will need to make the final decision as to jump or stay.”
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It sure does and that is why I typically only make 3-4 trades per week! I’m not a purist. I don’t sit down at my machine and go after 7 pips here, and 10 pips there, although some people do. I personally think that it nuts – to be quite honest with you.
Instead, I am a Trajectory Hunter (or, the system is). I look for the “next” Trajectory (or, the system does) and then I get into position. Each currency pair is different in terms of its Magnitude. However, the system is designed to capture a minimum profit per trade which is based on the historical and empirical evidence shown in the pair since the inception of the Retail Forex Market.
Right now (as of 12/21/04), the EURUSD has a Daily Magnitude of 122 pips. But, its Long Trajectory has daily Magnitude of 84 pips, and its Short Trajectory has a daily Magnitude of 75 pips (all Strategic numbers). Now, there are two additional sets of the same value points but they are calculated differently – they are Tactical Values and Real-Time Values. Or, put another way – the system has three (3) different types of Trajectories: Strategic (which I just gave you), Tactical and Real-Time.
Inside the engine these Trajectories are called TCD or Transequential Contiguous Delta (core system indicators), and there are six (6) of them one for each trade type (Long and Short). So, when I trade, I’m going after these pip classifications as minimums. I put the minimum design profit just under these classifications, so as not to place too much stress on the system. Day trade minimums are 50 pips, so you can now see how I can do this as they fit nicely under the strategic, tactical and real-time TCD numerical values. This is all part of the Enhanced TCD Double Helix Module.
“This exponential increase the reduction of margin for error, is the reason for the vast failure rate in daytrading generally, it remains to be seen if the decision and recognition process can be automated, as this is clearly the intent of your proprietary methodology.”
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Automating it all – yes. Allowing for 50 billion trades per day – no. I’ve never found any real benefit to inflicting that kind of massive headache on myself. Besides, when you understand TCD’s and Price Structures, you really don’t have the need to engage in so many trades on a daily basis. Some day’s I don’t even make a trade because there are no signals with a high enough probability – so I just pass and wait for higher probability numbers.
“These are driven by the fundamentals, it becomes a moot point that you must be able to analyse, understand, and select the correct investment to profit from any decision. This has always been, and probably remains a big ask.”
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The point is the ease with which one can boost their annual returns over what their Mutual Fund Manager is getting them – that’s the things that blows my mind. The Forex has got to be one of the easiest trades to make for an Investor with a 5-10-15 year event horizon.
Example: The EURUSD is right now running inside of an approximate 10 year, 4000+ pip range that is fairly predictable. It is now nearing that high point again – which is where it was some 10 years ago. If I were a long term trader, I could pick up at least 2000 pips (being very conservative) on the EURO to the downside at some point during the same amount of time into the future. The dollar simply cannot get much weaker against the Yen, and the EUR before both Japan, Europe and the U.S. begin to turn the currencies (through policy actions) around. Sometimes the pattern snaps at 5 years and the recycles back to a 10 year pattern.
So, if I were a long term investor in the Forex – I’d be getting ready to Short the EURUSD – just not quite yet. There is still some topside of about 800 to 1000 pips left in this EUR bull run on a much shorter time frame. How far ahead of the game would the typical Mutual Fund Investor be with a cool 2000 pip run on the EURUSD, as compared to the 15% per year they get from the stock market.
That was my point.
“While it may be argued that you have indeed rewritten the rules on "technical analysis", and that will be proven or not as the case may be in the fullness of time, you have not yet made a case for the suspension of valuation as a methodology for profiting from the financial markets.”
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Nor, do I want to! I need those people in the market doing their “valuations” and moving the marketing up and down, or just sideways. I’m not trying to shoot my meal ticket (LOL!)
I need those who bring “order” to the market. I can’t do what I do without their “order” conduct.So, I will never be making the case that conventional valuations should be suspended. However, I have made the case that I simply don’t need to do exactly what they do, in order to profit consistently and accurately.
“Unfortunately, banks now seek to derive revenue from speculative trading.”
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Be very careful, here. Not all of them do. See my examples of “Compensating Balances”. They use it as a hedging device, too. Not only to make a profit and in some cases they don’t immediately turn a profit – but they might be holding a currency that is doing better than there own homeland paper. This could give then an off-set they the otherwise would not be able obtain with their overly inflated paper, or overly devalued paper in the short-term.
“From a purely daytrading perspective I would have to agree, however from the standpoint of making and keeping a substantial profit, I must seriously disagree. And it is about earning a return on invested capital.’
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What else can a highly accurate trading system for Day Trading and Swing Trading do, other than make and keep substantial profits? That’s my goal. I can’t speak for anyone else. My goals are to make and grow by geometric proportions, and substantial account balance. The only way that I know to do that is to trade efficiently which means doing so with a high degree of accuracy to a substantial target, rolling over a high percentage of profits into the next trade (I personally roll 100% for now because I simply don’t need the money to live off of), and then repeat with consistency that same process.
Isolated and individual Fundamental “valuations” don’t help me in this regard when using this trading technology. It might help me if I were using something else, but I would not be in the Forex with any other tool simply because I have not found one that works as well, or that I am as comfortable with. I have not seen one that is as precise, or as accurate, or as consistent as this one – so, I can only speak to this system – and – under it, no individual and isolated fundamental “valuations” are required. They don’t even make sense in this environment – there’s no where to plug them in, other than that which is already accounted for in the historical data.
“He uses vertical red,green,yellow and orange lines.They are spaced at a specific timeframe apart, and traded upon a cyclical analysis.”
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If they are vertical lines, then they are definitely time based TA tools. And, if they are time based conventional TA tools, then they must be tweaked by him to yield specific buy/sell/hold recommendations. Most conventional TA has at its core some form of mathematical averaging concept. The vast majority of traditional TA falls into this category – which is why the vast majority of all TA lags behind my TA – basically, can’t see far enough down the road to make any projections with any real degree of clarity that my profiles contain (when I post them – have not done that here – only parameters with a trade signal).
“Value investors in the FX, well Warren Buffett is $600M short the USD from 2yrs ago, I guess he just liked the look of the chart, but seriously, Buffett is an exception, however if more people had his acumen, more people would have wealth.”
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Yeah, but that’s cheating – invoking Buffett is like invoking King Kong at the local zoo. The guy is extraordinarily amazing. Besides, he’s not a day trader and that is a very long-term event horizon. It is also a very powerful trade!
I have every intention of catching Mr. Buffett and Bill Gates at the top of America’s billionaire list. Not, to make a name for myself, but just to validate my work as being beyond reproach. I have a long way to go, but I have already driven my revenue model through several 56 trade cycles and it worked just fine using a 30/30/100 formula (30% net return per trade, 30% of total account balance used as per trade cost basis and reinvesting 100% of al profits for X number of trades required to reach $1 million). I’ve only done this once using the new 50/30/100 formula and I am working on number two (a test run) right now.
So, my trades are only in the low 7 figure range for now – no where near Mr. Buffett, but if I follow the revenue model and do what this system tells me to do and only take high probability trades, then I fully expect to get on that list some day in the not so distant future. You have to believe you can, or you won’t. You also have to have a solid tool.
“As to daytraders utilising value, probably none........but how many daytraders make money?”
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Correct.
“Let,
E = expected earnings (GDP)
R= expected growth rate
Y= current Yield on AAA Bonds........then
E(2R + 8.5 ) * Y/4 = intrinsic value of the currency.”
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But, this is a Predictive Model. The word expected shows up twice. Expected growth rate of what – the earnings themselves? Also, current yield on A3B’s, which ones - are you talking about the street’s aggregated estimate – or do you just pick one? You can’t be just picking one – so it has to be the listed/tracked aggregate.
How frequently does this generate a Trade Signal? And, can you calculate the Probability for the target (your Intrinsic value of the currency) to be struck before the trade? Lastly, what is the time-line for such a trade? In other words, when you back-tested this Model against historical data, what was the average holding period before the target (intrinsic value of the currency) was struck?
moderators , I think a word limit law is required now .
even a sceptic like me wants to be able read what I am sceptical about , before I make judgements .
if I have to go through a thesis everytime , then the post itself is truly worthless to everyone .
even a sceptic like me wants to be able read what I am sceptical about , before I make judgements .
if I have to go through a thesis everytime , then the post itself is truly worthless to everyone .
rosemary999
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how do i replace a broken scroll wheel?
If you find it worthless, wisetsguy, why not simply ignore it, rather than use up more space just to tell everyone that you find it worthless? There are plenty of conversations and threads here that I have no interest in at all, and I just keep away from them. What's the problem?wisestguy said:
7thSignalTrader
Well-known member
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Rob,
You wrote:
"What's the problem?"
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Because the clueless among us will always find it a requirement in their small world's to hi-jack a perfectly good thread that they themselves cannot follow. So, rather than discuss the merits inside the thread, they will attempt to re-direct and hi-jack, so that their own agenda of foolishness can be administered.
It is a classic "online" fools maneuver. Notice how none of these absent minded wasted joules of energy have injected anything remotely cogent and/or relevant to the thread’s content. They have nothing to add, nothing to offer, nothing to contribute – so they do all that they can – mock. When in reality, they only end up mocking themselves without knowing it.
It is the height of the abandonment of common sense. At this point, I just ignore them, Rob.
You wrote:
"What's the problem?"
----------
Because the clueless among us will always find it a requirement in their small world's to hi-jack a perfectly good thread that they themselves cannot follow. So, rather than discuss the merits inside the thread, they will attempt to re-direct and hi-jack, so that their own agenda of foolishness can be administered.
It is a classic "online" fools maneuver. Notice how none of these absent minded wasted joules of energy have injected anything remotely cogent and/or relevant to the thread’s content. They have nothing to add, nothing to offer, nothing to contribute – so they do all that they can – mock. When in reality, they only end up mocking themselves without knowing it.
It is the height of the abandonment of common sense. At this point, I just ignore them, Rob.
>>If you find it worthless, wisetsguy, why not simply ignore it, rather than use up more space just to tell >>everyone that you find it worthless?
this is out of context , the reason why is in the previous sentence .
>>how do i replace a broken scroll wheel?
my turn to LOL
>>When in reality, they only end up mocking themselves without knowing it.
this coming from a guy who only paper trades for a living and has never used his own self hyped system.
you are funny
this is out of context , the reason why is in the previous sentence .
>>how do i replace a broken scroll wheel?
my turn to LOL
>>When in reality, they only end up mocking themselves without knowing it.
this coming from a guy who only paper trades for a living and has never used his own self hyped system.
you are funny
Rhody Trader
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TV
In other words Rhody, I had “great students” because I also had “great expectations” for them.
There it is, right there!
I coach volleyball at the collegiate and youth club level and expectations are a big focus. It is amazing what the difference is when you have high expectations for people. I do not allow my players to tell me they can't. When you say that, you automatically put up barriers. Instead, I force them to address the issue proactively: "How can I?" That little change of phrase makes the biggest difference in the world. It turns them in to problems solvers. It's something I apply in all my various coaching/teaching endevours.
Ignorance is not a bad thing – but ONLY if one recognizes that they are indeed ignorant AND takes the necessary steps to become educated along the correct path. Ignorance only becomes a serious problem for the would-be trader when he/she fails to recognize that they are in fact, ignorant.
I agree. The first step on the path to enlightenment is realizing that you don't know.
Visit the site: Example of Original Engine Core
I took a look. Not a well documented system. I think I finally sorted out how to read the screen and work with it, but it's poorly written.
Fifthly, get ready for the idiots
Fortunately, I don't really care much what others think about my work. If I'm satisfied with it (and my standards are VERY high), then that's all that matters.
So, pick something that is worthy of doing and spending your valuable time on (hint: think kids and young people!) and then devote much of your new found wealth on something that will be here long after you leave this planet.
That's the easy part.
I've got so many things I would like to accomplish or see accomplished. Education and devleopment play a major part in that. Volleyball, as you might expect, is a part, but by no means the major one. I delight in helping others learn, but I cannot stand educational system we have at present. It is sorely in need of change and I have ideas for doing it. I have an old professor who has been on me for 10 years to do my PhD (I have a Masters), but I have difficulty seeing the value. That puts me in the system where everything is so locked in to an ineffecient, ineffective, out-moded model that it won't be improved by little changes here and there. I feel like I can do more operating from the outside on a different path. The term "creative destruction" comes to mind!
Of course, coming up with a new educational paradigm and implementing it means $$$, and lots of them.
What sorts of things are you looking to do?
In other words Rhody, I had “great students” because I also had “great expectations” for them.
There it is, right there!
I coach volleyball at the collegiate and youth club level and expectations are a big focus. It is amazing what the difference is when you have high expectations for people. I do not allow my players to tell me they can't. When you say that, you automatically put up barriers. Instead, I force them to address the issue proactively: "How can I?" That little change of phrase makes the biggest difference in the world. It turns them in to problems solvers. It's something I apply in all my various coaching/teaching endevours.
Ignorance is not a bad thing – but ONLY if one recognizes that they are indeed ignorant AND takes the necessary steps to become educated along the correct path. Ignorance only becomes a serious problem for the would-be trader when he/she fails to recognize that they are in fact, ignorant.
I agree. The first step on the path to enlightenment is realizing that you don't know.
Visit the site: Example of Original Engine Core
I took a look. Not a well documented system. I think I finally sorted out how to read the screen and work with it, but it's poorly written.
Fifthly, get ready for the idiots
Fortunately, I don't really care much what others think about my work. If I'm satisfied with it (and my standards are VERY high), then that's all that matters.
So, pick something that is worthy of doing and spending your valuable time on (hint: think kids and young people!) and then devote much of your new found wealth on something that will be here long after you leave this planet.
That's the easy part.
I've got so many things I would like to accomplish or see accomplished. Education and devleopment play a major part in that. Volleyball, as you might expect, is a part, but by no means the major one. I delight in helping others learn, but I cannot stand educational system we have at present. It is sorely in need of change and I have ideas for doing it. I have an old professor who has been on me for 10 years to do my PhD (I have a Masters), but I have difficulty seeing the value. That puts me in the system where everything is so locked in to an ineffecient, ineffective, out-moded model that it won't be improved by little changes here and there. I feel like I can do more operating from the outside on a different path. The term "creative destruction" comes to mind!
Of course, coming up with a new educational paradigm and implementing it means $$$, and lots of them.
What sorts of things are you looking to do?
7thSignalTrader
Well-known member
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Rhody
Rhody,
“It is amazing what the difference is when you have high expectations for people.”
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It blows my mind that “some” (certainly not all) people just don’t get this. If you look at all of the positive advancement in human civilization, somewhere along the line, somebody had to start thinking outside the box in order to pull humanity into the future.
The discovery/invention of: fire, the wheel, horse and buggy, electricity, internal combustion engine (we really need to start looking at Hydrogen fuel sources, but that’s another forum), the television (has it drawbacks too), automobile, train, airplane, computer, electronic financial exchanges, and the list goes on forever – all required – no – demanded some serious outside the box thinking initiated by a rise in human expectation. Students of history fully understand this.
“I do not allow my players to tell me they can't.”
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That makes my blood boil! I had a Track Coach (many years ago) who told me that every race I entered was mine to lose. He told that to all of us on the team because he understood that you cannot win until you at least believe that you can. If you cannot elevate your expectations, then you will only stumble upon success in life. Too many people on this earth walk around with this attitude – and they have the audacity to scoff at those who are actually living out their dreams as a result of their elevated thinking.
Bottom line: we live inside a global crab barrel. Don’t ever try to rise above the norm, or step out in a different direction, because there will always be somebody there to remind you that you are just like them.
“That little change of phrase makes the biggest difference in the world.”
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Yes. Unfortunately, the average person does not study psychosomatic causes. So, they are completely unaware of their self-talk and how violent their self talk can be to their subconscious mind and eventually their conscious mind. People are continually putting junk into their sub-conscious mind and coming up with flawed premise after flawed premise and then they wonder why things are not working out in their lives. Typically, they will start to point the finger at anyone else who comes along with their act together and blame them for their own failure to elevate their stinking thinking.
It sounds like this is being extra “hard” on people, but it is the truth. As human beings, we don’t like the truth, especially when it exposes our flaws.
I used to have a really, really bad habit of being late for things. Late for appointments, late for work, late for class, late for personal gatherings with friends and family – just plain ole late. It really became a problem many years ago, until somebody pulled me aside and told me the honest truth about myself.
The truth hurt – and the fact is that back then, I did not care about other people’s schedule. I did not care and therefore, if I was late then that was YOUR fault, not mine. My attitude was that you should have given me more time. The truth was that I was being selfish and inconsiderate of other people’s time. I had a very low expectation and understanding of the value that people placed on their time.
So, I changed. Because, a wise man will change where a fool never will. I no longer wanted to be a fool for my entire life. So, I realized that it was the right thing to do when I respected the time of other people. I was both ignorant and foolish until I decided that I was responsible for outcome of my life.
“I took a look. Not a well documented system. I think I finally sorted out how to read the screen and work with it, but it's poorly written.”
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It might be a language issue. The person who built the site is really smart and very intelligent, but English is like a second for him. But, he’s a really sharp Man. At the core of the system sits my very first prototype. I am now into the next generation of that core.
The look and feel is not the same, nor is the functionality. Basically, what I’m developing right now is at least one light year ahead of where I was two years ago. What you saw on that sight was a very good Trend Following Swing Trade System. What I am working on now is the next generation of that which is an intelligent Predictive Model trading solution. But, the core of his system is the core of my early work.
“Fortunately, I don't really care much what others think about my work. If I'm satisfied with it (and my standards are VERY high), then that's all that matters.”
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You are better then me on this. When I see something completely irrational, it is like somebody just walked up to the chalkboard and ran their fingernails down the face. Very annoying – you just want to yell the words: WAKE UP! Eventually, I learn to ignore them when I find out that I cannot help them due to their total blindness.
“What sorts of things are you looking to do?
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Children, Education, Aviation, Disease Research, Medical Services, Indy Race Team, Private Aerospace Company and Medical Humanitarian Foundation (airborne).
My wish list if full – but, I just won’t be able to get to everything. Some of the stuff is personal wants and goals. I’d like to build an Indy Car Program and Racing Team. But, before I did that, I have a High Performance Jet project that is on the drawing boards and should lead to a private aerospace company. Private Space Exploration is a distant thought.
Other things are more important however such as, Children, Disease Research and Airborne Medical Services. I hope to get these funded and organized properly with quality people. There are too many children around the world dying needlessly or suffering needlessly simply because they don’t have access to proper treatment (of course, the geopolitical climate causes much of this). There are kids around the world sleeping in card board boxes in some back alley or some muddy ditch. That bothers me to know end.
Most of this stuff will require billions and really good strategic planning coupled to really intelligent people behind it with the right personal motivation. See ORBIS for some clues about what I have on my mind: http://www.orbis.org/bins/content_page.asp?cid=1-4-11-12&lang=1 Also, see: http://www.l1011.homestead.com/flyinghosp.html.
Both of these projects use the DC-10 and the L-1011. I'd like to go wider and deeper by converting four (4) 747's for the same purpose. That way, there could be 1 hospital engaged on the four corners of the earth at all times (with rotating shifts of course) - global reach. All medical services would of course be free.
There are many issues and obstacles that will have to be overcome - namely getting something as large as a 747 into areas where there is no adequate runway. Landing gear modifications and possibly even building runways for the missions are some of the possible solutions.
So, you can see why trading a few million dollars in the Forex does not really excite me all that much. I need billions and I don't know of any other place better than the Forex to acquire it over a fairly short period of time (relatively short). Lots of projects – but only two hands and one brain (for now).
I like your educational reform idea and I think it is way over-due, especially here in the U.S. One of the things I wanted to build was a National Aerospace Academy with Schools all across America. They would be private and free institutions but highly skewed towards those children with economically disadvantaged parents, or no parents still alive at all.
Instead of being a 4 year program – it would span 6 years and include the 7th and 8th grades up through the 12th grade. The students would have their “High School Diploma” a full two years ahead of their counterparts at other schools – by the 10th grade (I think 4 years just to obtain a high school diploma is nuts!). The remaining two (2) years would consist of: College Level Courses and Career Training.
Just think of it – two whole years to spend with a Student on real College Freshman and College Sophomore level courses plus real Career Development training. We would have Sponsorship/Partnership Programs in place with companies and institutions through the entire spectrum of career choices from Agriculture to Aerospace.
It would be called a National Aerospace Academy, but the students would be able to get an education that would prepare them for any career discipline that they could possibly imagine. For those students interested, they would also be able to obtain their Pilots License through CFII Rating.
The environment would have a certain business like tempo to it. Not too rushed, but not overly relaxed either. The students would know that they are part of a unique experience and part of something bigger than themselves. The attitude on campus would be one of team work, hard work, smart work, friendliness, and personal responsibility.
The atmosphere would be charged with the anticipation of learning something new, making progress, and building a foundation of small successes at a time. The overall campus theme will be honor, ethics, morals and character. The principle theme will be learning how to make good decisions and leading by example. It will be an incredibly fun environment and at the same time, people will know that something very special and purposeful is happening on the campus.
Only the highest caliber Teacher and/or Instructor would be allowed to teach at this institution. You would have to be a Teacher and/or Instructor at the top of your game, in order to even think about applying for a position. And, when you do come to work everyday you would do so with the understanding that you have been given an enormous privilege to lead the young minds of today into the future. Yours (as a Teacher/Instructor) will not be a “job” – it will be an “honor” and a great privilege. It will be the greatest thing you have ever done as a teacher/instructor in your entire life. The students will respect you, and you will respect them.
Just imagine what their academic resume would look like upon entering College for the first time! Every college and university in the world would be throwing money at this very well prepared young men and women to study at their institutions. And, that would be the only way that you would get your hands on them – you would have to offer them a full scholarship AND you would have to offer to pay for ANY post graduate work that my kids wanted to do after they obtained their basic BS/BA degree.
My kids/young men and women (students – of course, I would think of them like my very own babies) would be some of the most highly prepared new college students on the planet. And, I would be extremely proud of every last one of them. A new generation of super cool kids!
Do I have some ideas on “education” in this country – yeah.............just a few.
Rhody,
“It is amazing what the difference is when you have high expectations for people.”
-----------------
It blows my mind that “some” (certainly not all) people just don’t get this. If you look at all of the positive advancement in human civilization, somewhere along the line, somebody had to start thinking outside the box in order to pull humanity into the future.
The discovery/invention of: fire, the wheel, horse and buggy, electricity, internal combustion engine (we really need to start looking at Hydrogen fuel sources, but that’s another forum), the television (has it drawbacks too), automobile, train, airplane, computer, electronic financial exchanges, and the list goes on forever – all required – no – demanded some serious outside the box thinking initiated by a rise in human expectation. Students of history fully understand this.
“I do not allow my players to tell me they can't.”
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That makes my blood boil! I had a Track Coach (many years ago) who told me that every race I entered was mine to lose. He told that to all of us on the team because he understood that you cannot win until you at least believe that you can. If you cannot elevate your expectations, then you will only stumble upon success in life. Too many people on this earth walk around with this attitude – and they have the audacity to scoff at those who are actually living out their dreams as a result of their elevated thinking.
Bottom line: we live inside a global crab barrel. Don’t ever try to rise above the norm, or step out in a different direction, because there will always be somebody there to remind you that you are just like them.
“That little change of phrase makes the biggest difference in the world.”
----------------
Yes. Unfortunately, the average person does not study psychosomatic causes. So, they are completely unaware of their self-talk and how violent their self talk can be to their subconscious mind and eventually their conscious mind. People are continually putting junk into their sub-conscious mind and coming up with flawed premise after flawed premise and then they wonder why things are not working out in their lives. Typically, they will start to point the finger at anyone else who comes along with their act together and blame them for their own failure to elevate their stinking thinking.
It sounds like this is being extra “hard” on people, but it is the truth. As human beings, we don’t like the truth, especially when it exposes our flaws.
I used to have a really, really bad habit of being late for things. Late for appointments, late for work, late for class, late for personal gatherings with friends and family – just plain ole late. It really became a problem many years ago, until somebody pulled me aside and told me the honest truth about myself.
The truth hurt – and the fact is that back then, I did not care about other people’s schedule. I did not care and therefore, if I was late then that was YOUR fault, not mine. My attitude was that you should have given me more time. The truth was that I was being selfish and inconsiderate of other people’s time. I had a very low expectation and understanding of the value that people placed on their time.
So, I changed. Because, a wise man will change where a fool never will. I no longer wanted to be a fool for my entire life. So, I realized that it was the right thing to do when I respected the time of other people. I was both ignorant and foolish until I decided that I was responsible for outcome of my life.
“I took a look. Not a well documented system. I think I finally sorted out how to read the screen and work with it, but it's poorly written.”
--------------
It might be a language issue. The person who built the site is really smart and very intelligent, but English is like a second for him. But, he’s a really sharp Man. At the core of the system sits my very first prototype. I am now into the next generation of that core.
The look and feel is not the same, nor is the functionality. Basically, what I’m developing right now is at least one light year ahead of where I was two years ago. What you saw on that sight was a very good Trend Following Swing Trade System. What I am working on now is the next generation of that which is an intelligent Predictive Model trading solution. But, the core of his system is the core of my early work.
“Fortunately, I don't really care much what others think about my work. If I'm satisfied with it (and my standards are VERY high), then that's all that matters.”
----------------
You are better then me on this. When I see something completely irrational, it is like somebody just walked up to the chalkboard and ran their fingernails down the face. Very annoying – you just want to yell the words: WAKE UP! Eventually, I learn to ignore them when I find out that I cannot help them due to their total blindness.
“What sorts of things are you looking to do?
----------------
Children, Education, Aviation, Disease Research, Medical Services, Indy Race Team, Private Aerospace Company and Medical Humanitarian Foundation (airborne).
My wish list if full – but, I just won’t be able to get to everything. Some of the stuff is personal wants and goals. I’d like to build an Indy Car Program and Racing Team. But, before I did that, I have a High Performance Jet project that is on the drawing boards and should lead to a private aerospace company. Private Space Exploration is a distant thought.
Other things are more important however such as, Children, Disease Research and Airborne Medical Services. I hope to get these funded and organized properly with quality people. There are too many children around the world dying needlessly or suffering needlessly simply because they don’t have access to proper treatment (of course, the geopolitical climate causes much of this). There are kids around the world sleeping in card board boxes in some back alley or some muddy ditch. That bothers me to know end.
Most of this stuff will require billions and really good strategic planning coupled to really intelligent people behind it with the right personal motivation. See ORBIS for some clues about what I have on my mind: http://www.orbis.org/bins/content_page.asp?cid=1-4-11-12&lang=1 Also, see: http://www.l1011.homestead.com/flyinghosp.html.
Both of these projects use the DC-10 and the L-1011. I'd like to go wider and deeper by converting four (4) 747's for the same purpose. That way, there could be 1 hospital engaged on the four corners of the earth at all times (with rotating shifts of course) - global reach. All medical services would of course be free.
There are many issues and obstacles that will have to be overcome - namely getting something as large as a 747 into areas where there is no adequate runway. Landing gear modifications and possibly even building runways for the missions are some of the possible solutions.
So, you can see why trading a few million dollars in the Forex does not really excite me all that much. I need billions and I don't know of any other place better than the Forex to acquire it over a fairly short period of time (relatively short). Lots of projects – but only two hands and one brain (for now).
I like your educational reform idea and I think it is way over-due, especially here in the U.S. One of the things I wanted to build was a National Aerospace Academy with Schools all across America. They would be private and free institutions but highly skewed towards those children with economically disadvantaged parents, or no parents still alive at all.
Instead of being a 4 year program – it would span 6 years and include the 7th and 8th grades up through the 12th grade. The students would have their “High School Diploma” a full two years ahead of their counterparts at other schools – by the 10th grade (I think 4 years just to obtain a high school diploma is nuts!). The remaining two (2) years would consist of: College Level Courses and Career Training.
Just think of it – two whole years to spend with a Student on real College Freshman and College Sophomore level courses plus real Career Development training. We would have Sponsorship/Partnership Programs in place with companies and institutions through the entire spectrum of career choices from Agriculture to Aerospace.
It would be called a National Aerospace Academy, but the students would be able to get an education that would prepare them for any career discipline that they could possibly imagine. For those students interested, they would also be able to obtain their Pilots License through CFII Rating.
The environment would have a certain business like tempo to it. Not too rushed, but not overly relaxed either. The students would know that they are part of a unique experience and part of something bigger than themselves. The attitude on campus would be one of team work, hard work, smart work, friendliness, and personal responsibility.
The atmosphere would be charged with the anticipation of learning something new, making progress, and building a foundation of small successes at a time. The overall campus theme will be honor, ethics, morals and character. The principle theme will be learning how to make good decisions and leading by example. It will be an incredibly fun environment and at the same time, people will know that something very special and purposeful is happening on the campus.
Only the highest caliber Teacher and/or Instructor would be allowed to teach at this institution. You would have to be a Teacher and/or Instructor at the top of your game, in order to even think about applying for a position. And, when you do come to work everyday you would do so with the understanding that you have been given an enormous privilege to lead the young minds of today into the future. Yours (as a Teacher/Instructor) will not be a “job” – it will be an “honor” and a great privilege. It will be the greatest thing you have ever done as a teacher/instructor in your entire life. The students will respect you, and you will respect them.
Just imagine what their academic resume would look like upon entering College for the first time! Every college and university in the world would be throwing money at this very well prepared young men and women to study at their institutions. And, that would be the only way that you would get your hands on them – you would have to offer them a full scholarship AND you would have to offer to pay for ANY post graduate work that my kids wanted to do after they obtained their basic BS/BA degree.
My kids/young men and women (students – of course, I would think of them like my very own babies) would be some of the most highly prepared new college students on the planet. And, I would be extremely proud of every last one of them. A new generation of super cool kids!
Do I have some ideas on “education” in this country – yeah.............just a few.
Last edited:
Rhody Trader
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TradeVector
It can also be said that the real innovation doesn't take place until some kind of stressor is put on the system. A lot of times it takes a jarring kind of circumstance (loss of a job, death of a loved one, medical problem, etc.) to get things moving. We get comfortable and stagnant.
You and I would not have gotten along very well back then at all! I really hate tardiness, and that includes my own - especially my own. That touches on a related point. My personal opinion is that so many problems you see on a day-to-day basis can be linked back to a lack of simple consideration for each other. If we just paid more attention to how our actions were impacting those around us, the world would be a much nicer place. As it stands, an awful lot of people seem to travel in a little bubble, complete oblivious to what's going on around them.
Sounds great. My only consideration is that there needs to be more individualized focus for a maximized educational experience. Any time you have class & time based system you create a mean-based system which does not provide as much of a challenge to the upper students as they need, nor as much support to the lower students as they require. I have some ideas toward that, but still really need to work through how best to optimize every students learning process.
Of course that is a big component in any quality educational system. The current tenure-based one must get thrown out. The teachers need incentives to grow and develop their skills just like the kids.
There's one catch. Arguably, our best universities are the Ivy League. They do not provide anything but need-based financial aid to anyone, at least at the undergraduate level. That's where I coach. Of course, if your students are all under-priviledged, that won't be a problem.
That actually touches on something I would really like to do - namely bring together a collection of outstanding individuals to work together on just the sorts of projects we're discussing. There are so many outstanding minds out there. Imagine the synergies of getting them cross-fertilizing each other. The things that could be accomplished!
To switch back to the original theme of this thread, I had a question after reading one of your posts on another thread. Does your system provide you with a way to monitor the price structure? I ask because you mentioned that it sometimes suffers badly at the hands of news items that destroy the price structure. My thinking is that maybe the stability of the price structure itself could be a kind of leading indicator of the risk associated with those events. By that, I mean you could see a degradation of the price structure and take measures to guard against major adverse action.
It can also be said that the real innovation doesn't take place until some kind of stressor is put on the system. A lot of times it takes a jarring kind of circumstance (loss of a job, death of a loved one, medical problem, etc.) to get things moving. We get comfortable and stagnant.
You and I would not have gotten along very well back then at all! I really hate tardiness, and that includes my own - especially my own. That touches on a related point. My personal opinion is that so many problems you see on a day-to-day basis can be linked back to a lack of simple consideration for each other. If we just paid more attention to how our actions were impacting those around us, the world would be a much nicer place. As it stands, an awful lot of people seem to travel in a little bubble, complete oblivious to what's going on around them.
Sounds great. My only consideration is that there needs to be more individualized focus for a maximized educational experience. Any time you have class & time based system you create a mean-based system which does not provide as much of a challenge to the upper students as they need, nor as much support to the lower students as they require. I have some ideas toward that, but still really need to work through how best to optimize every students learning process.
Of course that is a big component in any quality educational system. The current tenure-based one must get thrown out. The teachers need incentives to grow and develop their skills just like the kids.
There's one catch. Arguably, our best universities are the Ivy League. They do not provide anything but need-based financial aid to anyone, at least at the undergraduate level. That's where I coach. Of course, if your students are all under-priviledged, that won't be a problem.
That actually touches on something I would really like to do - namely bring together a collection of outstanding individuals to work together on just the sorts of projects we're discussing. There are so many outstanding minds out there. Imagine the synergies of getting them cross-fertilizing each other. The things that could be accomplished!
To switch back to the original theme of this thread, I had a question after reading one of your posts on another thread. Does your system provide you with a way to monitor the price structure? I ask because you mentioned that it sometimes suffers badly at the hands of news items that destroy the price structure. My thinking is that maybe the stability of the price structure itself could be a kind of leading indicator of the risk associated with those events. By that, I mean you could see a degradation of the price structure and take measures to guard against major adverse action.
"So, you can see why trading a few million dollars in the Forex does not really excite me all that much. I need billions and I don't know of any other place better than the Forex to acquire it over a fairly short period of time (relatively short). Lots of projects – but only two hands and one brain (for now). "
It would certainly excite me!
I could do a lot of good with a few mil.
It would certainly excite me!
I could do a lot of good with a few mil.
peterpr
Established member
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I have been following this thread (and the Weekly parameter...) carefully and appreciate the time you have devoted to it - facinating stuff. However, I have a suggestion that I think would clarify your treatment of 'price' at least in so far as making things more intelligible to readers is concerned.
The word 'Price' already has a very clear and precise scientific meaning. In trading terms it is universally accepted as the number of currency units required to settle a purchase/sale agreement on a unit of something else at a particular moment in time. I accept that it is possible to derive all manner of other potentially useful concepts from the price/time continuum but surely that is exactly what such concepts are - derivatives. Your meaning at various points would be clearer if 'price' retained its universally accepted meaning and "price" were clearly defined and called something else.
Best of luck with your project. Judging by the number of 'views' I've no doubt there are many here (myself included) who will watch out for more.
The word 'Price' already has a very clear and precise scientific meaning. In trading terms it is universally accepted as the number of currency units required to settle a purchase/sale agreement on a unit of something else at a particular moment in time. I accept that it is possible to derive all manner of other potentially useful concepts from the price/time continuum but surely that is exactly what such concepts are - derivatives. Your meaning at various points would be clearer if 'price' retained its universally accepted meaning and "price" were clearly defined and called something else.
Best of luck with your project. Judging by the number of 'views' I've no doubt there are many here (myself included) who will watch out for more.
