Hey, Techies......Reality Check

[ducati998]

Just been looking at some data on this site regarding returns, after chump kinda suggested that daytrading would surpass returns available to investing.

Now these are not daytrades, they are swing trades, but I make no claims to the accuracy of the data, I am just utilising a source of data.

None of these are annualised, just the raw actualised returns.

January..........# of Trades taken 8............return 0.05%
February........# of trades taken 16...........return 3.61%
March...........................................12.......................3.70%
April..............................................9..........................dr(0.12%)
May...............................................7........................6.25%
June............................................18.......................3.88%

Total # trades............................70...........total return 2.90% on capital employed

Compared with a fundie approach;

Total # trades..............................2...........total return 36.5% on capital employed.

Food for thought
Cheers d998

 

[chump]

Duc,
Interestingly I went to have a look at your original post to which the reply you allude was made...so that I could quote it to put your post above into context..but you have deleted it as I have have now deleted mine as your deletion left it looking as though I was starting this discussion.
You have taken both my post out of context and indeed you have misquoted me...I could be kind and say you did that accidentally,but I won't be..you have a problem..it's called 'blinkeritus'...horses suffer from it ...basically it means they are so f]rightened in the starting gate they have to wear blinkers so they cannot see anything but the space in front of them..they can't perform otherwise...you're the same about trading and FA blinkers...daytrading and TA must have given you a very unpleasant experience !
For accuracy I previously responded to one of your statements regarding the invariably and now becoming boring superioty of FA over TA and daytrading and virtually any other methodology...I simply said the determinant was not the methodology or the timeframe but the skill of the trader...above you manage to twist that to suit your own ends...
Again I will clarify what I said...take two traders with equal skill in employing their methododoly and there is no basis for suggesting the fundie will outperform the techie who is daytrading...if you had the first clue about business you would recognise this statement immediately to relate to the basic accounting concept of turning over your working capital which relates to working your capital has hard as you can.
That will now have to do from me on this subject ...discussing this issue with you is simply a lost cause and waste of time.

Edit to include your own words ....
"Actually I have become much more conservative in my assumption of risk, and it is the acknowledgement that I was very lucky as a daytrader, very lucky to not get wiped out, as I regularly swung for the fences, that I wised up.

I now have the reformed smoker mentality."....enough said I think

 

[ducati998]

chump

Is this the quote you were referring to?

By trading "slower" you will make more money on aggregate than the vast majority of daytraders."...possibly true..but consider 'crap' fa trader takes longer to lose money than a 'crap' intraday trader..however they both end up inthe same place ...a skilled fa trader trading for the long term by the same token is not guaranteed to exceed the skilled intraday trader..

This is the one I was referring to inasmuch as it got me to thinking..................

You have taken both my post out of context and indeed you have misquoted me...I could be kind and say you did that accidentally,but I won't be..you have a problem..it's called 'blinkeritus'...horses suffer from it ...basically it means they are so f]rightened in the starting gate they have to wear blinkers so they cannot see anything but the space in front of them..they can't perform otherwise...you're the same about trading and FA blinkers...daytrading and TA must have given you a very unpleasant experience !

Everyone loves to question my past experiences, hell loads of my trades are posted, you can just go judge for yourself if you're remotely interested.

All prompted by a rather innocuous allusion,

after chump kinda suggested that daytrading would surpass returns available to investing.

You are obviously a little wound up.......................

if you had the first clue about business you would recognise this statement immediately to relate to the basic accounting concept of turning over your working capital which relates to working your capital has hard as you can.

And therefore, I have posted the numbers, which tell a rather interesting story. And that is;
70 Trades returns 2.90%
2 Trades returns 36.5%

So in regards to your accounting concept of turning over working capital, this has to be contrasted with the profit margin earned from that inventory turn.

That will now have to do from me on this subject ...discussing this issue with you is simply a lost cause and waste of time.

I guess you didn't like my numbers.
Cheers d998

 

[roguetrader]

Everyone loves to question my past experiences, hell loads of my trades are posted, you can just go judge for yourself if you're remotely interested.

I wonder why?
Because you are a trader employing FA and extolling its virtues perhaps?
I seem to recall another trader employing FA and extolling it's virtues on this board, strangely he doesn't seem to attract anywhere near the same amount of controversy.
I'm afraid I'd have to agree with Chump, you may have posted successful trades on the site, that I have no issue with, but your attitude towards TA does not support a successful overall experience. You are a borderline fanatic on the subject. Your resentment of TA overshadows most of what you have to say on anything else which is a great shame.

 

[barjon]

ducati

your stats may stimulate debate but they are pretty meaningless and can hardly be offered as proof that the fundie approach rules ok

a truer test would be to take a single (or a portfolio) equity instrument selected by our expert fundie and see who can make most money out of it (or lose least) over selected periods of time and until such time as our expert fundie calls a halt because the instrument no longer meets his criteria.

i'm sure there's a techie out there who would rise to your challenge :cheesy: it would make an interesting thread.

good trading

jon

 

[charliechan]

Just been looking at some data on this site regarding returns, after chump kinda suggested that daytrading would surpass returns available to investing.

Now these are not daytrades, they are swing trades, but I make no claims to the accuracy of the data, I am just utilising a source of data.

None of these are annualised, just the raw actualised returns.

January..........# of Trades taken 8............return 0.05%
February........# of trades taken 16...........return 3.61%
March...........................................12.......................3.70%
April..............................................9..........................dr(0.12%)
May...............................................7........................6.25%
June............................................18.......................3.88%

Total # trades............................70...........total return 2.90% on capital employed

Compared with a fundie approach;

Total # trades..............................2...........total return 36.5% on capital employed.

Food for thought
Cheers d998

yes ducati, it is food for thought. thoughts on how deluded you seem to be to me.

i man whats the point? you say yourself the data probably isnt accurate, and you make the unforegivable mistake of assuming these lacklustre restults are typical of everyone who trades this way.

dear oh dear.

 

[neil]

Baa !

Come on guys. Humour him. Remember it must be lonely for him out there where the nearest sentient being is a sheep.

 

[danfreek]

This makes no sense, how about comparing a newbie trader who has just learned how to draw a trend line and pitting him/her against Warren Buffet, I wonder who would do best, TA or FA???

Your stats prove nothing, you are assuming that a) every technical trader would make exactly those trades and b) that every fundamental trader would do the same, this is clearly wrong, neither method is better than the other, each trader has to find the method that they are most comfortable with, for you that's FA, not a problem, but don't dump on TA just because you don't find it suits your trading personality.

 

[neil]

One mans' meat is anothers' poison?

This makes no sense, how about comparing a newbie trader who has just learned how to draw a trend line and pitting him/her against Warren Buffet, I wonder who would do best, TA or FA???

Your stats prove nothing, you are assuming that a) every technical trader would make exactly those trades and b) that every fundamental trader would do the same, this is clearly wrong, neither method is better than the other, each trader has to find the method that they are most comfortable with, for you that's FA, not a problem, but don't dump on TA just because you don't find it suits your trading personality.

Excellent and logical reply Dan. Live and let live but I feel he feeds off confrontational posts with a view to gaining attention rather than to further the business of trading.

 

[charliechan]

his squirming response should be fun

any one care to think of what lousy excuse he will use this time?

 

[FetteredChinos]

i'd be surprised if he did actually. im sure Grant has a lot better things to do than deal with yet another petty squabbling match on here.

and people wonder why this site is viewed by some as heading down the pan...

 

[mark_b_27]

your stats may stimulate debate but they are pretty meaningless and can hardly be offered as proof that the fundie approach rules ok

a truer test would be to take a single (or a portfolio) equity instrument selected by our expert fundie and see who can make most money out of it (or lose least) over selected periods of time and until such time as our expert fundie calls a halt because the instrument no longer meets his criteria.

jon

This is a very good point you've raised Jon.

There are obviously a variety of independently audited funds using pure FA, index funds, hedge funds using a variety of techniques, statistical arbitrage, convertible arbitrage, macro, event driven, market neutral, etc, etc.

As a result, there are pretty reliable measures of how these various trading systems perform over time.

Are there any funds out there that manage money by predominantly using technical analysis?

 

[neil]

Good point Mark

This is a very good point you've raised Jon.

There are obviously a variety of independently audited funds using pure FA, index funds, hedge funds using a variety of techniques, statistical arbitrage, convertible arbitrage, macro, event driven, market neutral, etc, etc.

As a result, there are pretty reliable measures of how these various trading systems perform over time.

Are there any funds out there that manage money by predominantly using technical analysis?

I will have a look around Mark and invite replies. Hopefully we will have some sort of comparism.

I've started a thread over at Elite Trader repeating Marks' question:

http://www.elitetrader.com/vb/showthread.php?s=&postid=788532#post788532

 

[neil]

Two views from Elite Trader

I will have a look around Mark and invite replies. Hopefully we will have some sort of comparism.

I've started a thread over at Elite Trader repeating Marks' question:

http://www.elitetrader.com/vb/showt...vb/showthread.php?s=&postid=788553#post788553

 

[neil]

I will have a look around Mark and invite replies. Hopefully we will have some sort of comparism.

I've started a thread over at Elite Trader repeating Marks' question:

http://www.elitetrader.com/vb/showt...vb/showthread.php?s=&postid=788553#post788553

http://www.elitetrader.com/vb/showthread.php?s=&postid=788553#post788553

 

[ducati998]

rogue

I'm afraid I'd have to agree with Chump, you may have posted successful trades on the site, that I have no issue with, but your attitude towards TA does not support a successful overall experience. You are a borderline fanatic on the subject. Your resentment of TA overshadows most of what you have to say on anything else which is a great shame.

Actually, while I appreciate your sentiment, I disagree and for the following reasons;
1........In a predominantly TA site, an alternate viewpoint should be considered healthy.
2........If TA was so robust, why are you all so threatened by my posts?
3........My posts while constituting in many cases my opinion, also contain many referenced statements
4.......The numbers tell a far more eloquent story than the clumsy abuse that passes as counter-argument on this site.

The Techie numbers are anonymous, simply to divert attention from the originator, they are accurate as they were all live trades.

My 2 trades are as posted.
You may not have read my assertion on slugs, but in essence it went something like this........................If the Market is efficient, your results will be random, viz 50%, as the future is unknown, random, hence price will be by definition random.

If the market is inefficient, as the market returns to efficiency, your trade will become profitable.
This is the principal of selectivity and is well documented.

You asked LION for a Fundamentalists opinion of the indices the other day. Not, I suspect that you would place a trade on the strength of that alone, but it does tell me that you are starting to question the brainwash that passes for wisdom on this site.

barjon

your stats may stimulate debate but they are pretty meaningless and can hardly be offered as proof that the fundie approach rules ok

That is true enough, and the problem is that everyone is secretive about their results, and hide them away, and getting accurate and thevolume of data required is very difficult.

However, just on the bits that crop up from time to time, the story looks bad.

a truer test would be to take a single (or a portfolio) equity instrument selected by our expert fundie and see who can make most money out of it (or lose least) over selected periods of time and until such time as our expert fundie calls a halt because the instrument no longer meets his criteria.

Indeed, and both LION and myself have put ourselves forward to do so.
All we lack are some Techies.

dan

This makes no sense, how about comparing a newbie trader who has just learned how to draw a trend line and pitting him/her against Warren Buffet, I wonder who would do best, TA or FA???

While I appreciate your comparison to WEB, The techie in question is not a novice, he is an experienced trader, or that is what I have been led to believe.

I would not pick a novice account as a comparison.

Your stats prove nothing, you are assuming that a) every technical trader would make exactly those trades and b) that every fundamental trader would do the same, this is clearly wrong, neither method is better than the other, each trader has to find the method that they are most comfortable with, for you that's FA, not a problem, but don't dump on TA just because you don't find it suits your trading personality.

Interesting how defensive all the techies have become. The numbers have rattled your paradigm and belief system..........................I never said this was proof, I said food for thought and obviously you are thinking, just not in the right direction

Fettered

I am a glutton for punishment............and I just enjoy being right.

Cheers d998

 

[SOCRATES]

Attention seeking...

Excellent and logical reply Dan. Live and let live but I feel he feeds off confrontational posts with a view to gaining attention rather than to further the business of trading.

Actually, my view is somewhat different of all this.

I would hazard a guess and say it is the opposite of what you all think, and has little or nothing to do with confrontation at all but instead something completely different.

I fail to see why all of you with your combined brain power are not able to suss it immediately....yet you allow it and yourselves to go on and on about it...

 

[marketsurfer]

Ta ?

having worked with TA for a number of years, i have found that it has limited use and only as a form of an art rather than a science. the main patterns are not even quantified outside of the work of dr. andrew lo http://www.fenews.com/fen26/lo.html of MIT therefore its difficult to test their validity without being able to define them. TA will show you were a stock has been in the past and is useful sometimes for analysis and bias creation but not to trade from only. yeah, everyone can point to someone that is succesful using TA strictly, but one can also point to succesful palm readers etc. furthermore, its not FA or TA that works in daytrading but rather an understanding of supply and demand that enables long term success. Ta represents the past, don't forget it ! here's an interview i found with someone who has done extensive testing of TA , its good reading. enjoY !

http://www.realworldtrading.com/index.cfm?section=interviews&id=40


surfer

 

[roguetrader]

1........In a predominantly TA site, an alternate viewpoint should be considered healthy.

Couldn't agree more, and as you point out I invited the views of a fundamental analyst just today on another thread, however how that viewpoint is expressed determines to a great degree how it is received. It is doubtless fortunate you do not have to make a living as a negotiator.

The Techie numbers are anonymous, simply to divert attention from the originator, they are accurate as they were all live trades.

As you have traded technically yourself I wonder why you didn't use your own numbers to "tell the story"

You asked LION for a Fundamentalists opinion of the indices the other day. Not, I suspect that you would place a trade on the strength of that alone,

Indeed, I have neither the desire, nor the need to place trades by fundamentals. However I am open minded and absorb all information relative to whatever environment I inhabit. In this particular instance I was interested to know how a fundamental trader approaches the broad market at this time, as I suspected

I am bearish but will not put my money on the line until things get worse or there is another catalyst to send them south.

Interestingly when he commits to his trade there will doubtless be technical traders already on board that ride.

but it does tell me that you are starting to question the brainwash that passes for wisdom on this site

I am a christian but have read into Buddhism, Judaism and Islam. There is no need to lack faith or belief in one concept to observe or study another. I leave that way of thinking to the narrow minded. Indeed it is the attitude of "My way, or a variant of my way, to the exclusion of all others" that creates the darker side of the world we live in

 

[ducati998]

From another site, an alternate viewpoint; initiated by TheBramble

Bramble, welcome. As a general rule, the tighter your initial stop the lower the win rate will be but usually the higher the win/loss will also be around 0.30

Larry Williams as an example uses very very wide stops. He therefore acheives extremely high win rates, but very low win/loss ratio's. He repeatedly shows win percentages as high as 90%, but looking carefully the win/loss ratio will be around 0.30 or so.

These numbers work in reverse. Example. The Turtles who are trend follwers tend to have win rates around 35% - 40% but their win/loss ratio is closer to 3.0.

Which is better? Its a personal choice. I prefer the latter but many others don't. A high win percentage has nothing to do with net profitability and its easy to argue that shorter term systems can acheive higher win percentages than longer-term systems, but slippage and brokerage also become a big factor.

You wanted an example. I traded triangles and nothing else for 5 years. I used a tight stop and a EMA trailing stop of 13 days. The win percentage was 40%. The win/loss ratio was approxiamtely 3.0. At that time it suited my visual style of trading.

More recently I have been researching more quantitative styles of trading and the current research shows a win rate of 62% with a win/loss ratio of 3.5.

The holding period is approximately 20 days. Out of the 44 stocks I have tested so far (rules are the same across every stock) only 3 have been net losers over the last 5 years

So, this is from a systems trader, who is actually the head trader for Macquarie Bank in Aus.
Unfortunately I don't have access to his % stats. for trades taken, but also that currently the ASX is enjoying a bull run, always tickles the results a little.

food for thought
cheers d998