Sluggish Market & Ant Theory

[charliechan]

JumpOff,

You have indicated that you prefer to roll with the tide (if I have read your post correctly) and that is one way of doing things but surely it is an added benefit to know when it started, what the force might be and how far it will go. That would ensure that the moves that might peter out after a brief spurt are not the ones you tend to follow.

Understanding market participant's psychology and what they are likely to do when armed with information and faced with certain environments will always be extra ammunition in trading. A recent example was when oil hit $60, a lot of people panicked and started making silly utterances which they did not make when it was $55.50; surely it would be better to be able to anticipate what the likely impact would be long before it occurred. Even if the trader did not not open positions evasive action to protect capital would have been a good thing.

indeed - which is why charts are useful (assuming one knows how to read a chart properly)

 

[LION63]

indeed - which is why charts are useful (assuming one knows how to read a chart properly)

You could not resist could you.

The point you still fail to accept is that I strongly believe that it is not the method but the executor.

 

[ZDO]

SOCRATES,

Please pardon the delay in my response – did a 5 day weekend. Thanks indeed for your ‘no shrink’ reply. Of the 38,000 members on T2W, a very small percentage care what you say. That’s a compliment. Most posters have maybe one reader who really ‘listens’. You get tens of thousands % more than most. Does it get any better than that? Well yes - Look at your recent posts. In many of them you say you don’t have time to tell the truth then spend God knows how much time crafting a verbal curtain about what you won’t do because you won’t and what we can’t to because we can’t. That, simply, is not the best you can bring up here to the Psychology forum (and this request only applies to the Psychology forum) and I’m simply, respectfully requesting that you bring your best…

Each conversation, every thread, develops it’s own little ‘culture’ and along it goes – supporting the big, real culture. Every reader chooses to attack, flee, relinquish, or embrace each thread. Should a participant or a newcomer bring anything truly new to the small emergent ‘culture’ to disrupt the mutual stroking fest of all the embracers, it always threatens and usually ‘kills the thread’. These shocks to the ‘culture’ may be debasing and they may be elevating. I am simply requesting that the quakes you provide to the Psychology forum when you don’t embrace, relinquish, flee a thread be of the elevating variety.

Requests. No expectations! Speaking for myself, please never share your ‘edge’. Don’t reveal any secrets of trading in whole or in part. But, also, please don’t ‘kill’ threads with derogs and disdain. Rather, ‘kill’ them with questions from outside the stupid little ‘cultures’. A few members of each conversation may really be listening for ways off the culture instead of the comforts of deeper into a thread’s ‘culture’. Instead of crafting ‘lessens’ or lessons, maybe craft clever questions to pull and push those few seeking and beautiful minds (or dirt dumb minds, as the case may be) on through these various threads.

Trading is not easy – or with your brilliance and aspects, you would have mastered it during your first week ever. Put another way, trading is easy – but not until one has worked through every item on ‘that personal list, the whole of which can’t be seen’ and the length of which is different for each trader. Isn’t your story a good example of this? So while the original issue on this thread may actually be truly stupid (or not), it is on someone’s ‘list’ and that alone makes it valid.

However possible it is, very few are actually ever going to see and ‘get it’ as if through your eyes. That’s unfortunate, but please don’t let that stop you from helping others work through even the dead ends in their own ‘lists’.

Thanks and all the best,

ZD



replying to:

What happens is that when all of this descends into a pitful morass, the effort required to straighten it out is huge, nearly superhuman.

You cannot expect me to sit down here and write a fat textbook 10 inches thick in order to redress the balance as from my point iof view I have been given ample proof that to embark on such an endeavour is not worthwhile for several reasons.

You cannot expect me to fully explain and reveal my edge for each specific groups of scenarios, for each set of firm probabilities and for each particular tactic, and for each set and sub set of strategies, because if you were in my position you could not be persuaded to do it either.

You cannot expect me to act like some sort of unpaid nanny cum unrewarded mobile university.

You cannot expect me to expect me to be any of you, because you are you, and I am me.

You cannot expect me to devote endless time to you because you can't.

You cannot expect me to reveal all my thoughts to you, on command, at will, like you would access information by referring to an encyclopedia, because it is not practical or even fair.

You cannot expect me to continue to struggle against all odds and get involved in endless closed loop arguments without foundation, additionally tainted by disrespect and outright rudeness.

You cannot expect me to do all these things, which is what you probably want.

So what can you reasonably expect me to do ?

I can only reveal fundamental truths as far as I dare, because it is neither advisable nor prudent to do so in a public forum as you have to be ready to embrace these, and I can see that to do this openly in public is not wise.

So how can I be expected to impart to you what you need but cannot be given ?

In reply to your four questions, here are the answers :~

Dumb questions are to be avoided because they have to be recognised to be dumb in the first place. Dumb questions are not to be confused with questioning the improbable, or the apparently implausible or even the impossible, because when everything that is logical and rational is eliminated, that, which appears to be the most arcane, however improbable, has to be the ultimate truth.

There was a time, yes, when I had an inaccurate inner model but not of the crowds in markets but of the public in general. This is because I spent a very long time in isolation before I was able to crack the whole riddle from A ~ Z. I became disconnected from the mainstream everyday life and behaviour of people, in the sense that I became isolated from what is described as street wisdom (cheating, lying, tricking and stealing) and the world of beezness (plaigarising, unfair practices, taking advantage of, abusing, conning, lying, cheating and stealing) as opposed to the world of commerce, which is something very different.

Later on I recieved a series of shocks to discover how it is that individuals become corrupted by their refusal to act within a moral and ethical framework as a result of being corrupted by greed, impatience and dishonesty. It served to totally wreck any vestige of open and unconditional trust that was my yardstick up till then. It caused me to change my view radically of everything and everybody, and it caused me to be guarded to such an extent as not to accept anyone at face value anymore.

The answer to question number three is negative. This is because I never allowed myself to lose sight of my goals and to work relentlessly to achieve them. I did not allow myself to be distracted or misdirected in my quest. And every time that I was able to make progress, I proceeded to test the result in conjunction to everything else achieved to ensure that it was an extension and not subject to wilful force fitting. It caused me to test all the new ideas to destruction and to try to counter argue if and why they would not fit, and only accepted them if they did. I was only satisfied if these new ideas could be proven, and could stand up to the most rigorous inquisition and testing. Of course when you are dealing with abstract concepts, this is a very difficult and slow process.

In reply to question number 4, I do this all the time. What happens is that the message does not land, because the recipient(s) of the message do not consciously put their attention on the message itself, but instead become distracted or diverted or even offended, by the use of language in which it is delivered.

 

[SOCRATES]

ZDO, I say in my post that you quote above, and in reply to all of what you seem to want, I have to restrict myself to do only that which is forthright, responsible, realistically practicable and prudent.

KInd Regards.

 

[JumpOff]

JumpOff,

You have indicated that you prefer to roll with the tide (if I have read your post correctly) and that is one way of doing things but surely it is an added benefit to know when it started, what the force might be and how far it will go. That would ensure that the moves that might peter out after a brief spurt are not the ones you tend to follow.

I think I didn't make myself clear. You got it partially - I do prefer to roll with the tide - can't imagine fighting or struggling against market direction. When traders enter and exit a market they leave tracks, the same way that an animal leaves tracks when walking through damp ground. Animal tracks look different, - based upon what the animal was doing, - or getting ready to do. For instance a dog can't really jump without gathering itself first - it has to get it's hind legs under itself and transfer the weight to the back legs - it shows in the tracks. It can't turn hard left until it has planted its right front paw and pressed harder with that heel while kind of clawing with the left front paw as it crosses under the animals chest - it shows in the tracks. Watching a real time chart seems like that to me - like I'm watching an invisible animal moving beside me - I can't see the beast, but I can see what it's done, which direction it is heading, how fast, what it's doing right now, and it often gives very straightforward clues about what might happen in the next instant. The starting time and the force of events show nearly instantly in the price and volume, and if you are trading stocks, I expect further intent may show in the L2 and T&S.

As to how far it will go? I really can't imagine anything more than the next bar. I'm still working out setup probabilities. The beast may have gathered itself for a mighty leap, but that doesn't mean it will jump, or that it will take a second leap... If the rabbit holes up, the dog will chase it full steam, - right up to hole and then stand with it's nose in it - going nowhere, just digging ineffectually and flailing around.

Clearly - if I could see the rabbit, I might be in a better position to guess what the beast might do - but at this point, I'm still learning about beast tracks - so my plate is pretty full. And in the Forex market, I expect there is a whole crew of 'red herring draggers' on the payrolls of the various nations, just to make things interesting - I doubt that "little ole me" will have the resources necessary to understand what's happening until the beast leaves a track for me to observe..

JO

 

[mark_b_27]

Just out of interest, are any of you TA's charting this thread? The way it trends, hits resistance levels, reverses, counter-trends, whip-saws, hits new highs, hits new lows.
Was it just me, or did anybody else notice that recent head and shoulder pattern?
Pure magic. I reckon you could fill a textbook.

Who needs ants when you've got all of this?

Joking aside, while I'm no scientist, but from by limited knowledgeof it, scientific study is based on the testing of theories by carrying out experiments in controlled conditions that can be replicated by others.
Ants are one way of studying how a large number of task orientated (anonymous?) individuals inter-react with each other and react to changing signals. Group behaviour.
Obviously ants aren't people. For one thing we can only speculate as to whether they are influenced by greed and fear (perhaps this in itself can teach us something). One advantage ants do have over real people is that while students are also pretty cheap, it was found that ants are easier to store in glass jars.

I realise that many people come here looking for the secret to making guaranteed quick and easy money.
They'll be disappointed to learn that a discussion on theory is neither quick, nor easy, nor in the end a guarantee of making money.
However, I find it bizarre that some of the same people who will happily tell you that it may require 3 or 4 years of consistantly losing money before you might gain the necessary skills and experience to trade charts profitable, are telling us that we're fools to even participate in this cost-less discussion on theory.

BTW, Go and have a look at http://www.dfaus.com/
A bunch of academics using pointless and irrelevant finance theory to successfully manage $69billion.

 

[LION63]

JumpOff,

You obviously do a lot of research before, during and after your trades and are seeking to get better at it, that is laudable. You may not have thought about market efficiency or lack thereof to date but I feel that it is inevitable that your travels will take you there sooner or later.

There is a big difference between what you have described and those that choose to look at a few lines or bars and place trades. When they lose money they are left wondering what happened, they are the ones that quite often cry foul and swear that the broker, spread bet firm or market makers set them up for a fall. Analysis is analysis irrespective of what type it is.

Mark B 27,

I do not suppose that you have a chart with trend lines drawn.

One could hazard a guess and say that those who have contributed to this thread and the readers have learnt a bit about traders' psychology. Hot and cold; irrational; exuberant, calm, exasperated, arrogant etc. It proves that psychologists will always be in demand because what started out as a simple debate has had so many............................(all contained in your post).

 

[JumpOff]

JumpOff,

You obviously do a lot of research before, during and after your trades...

I wish it were true, but I'm not trading now. I'm still working on setups. I can't see any reason to trade real money until my paper account can be made to go up reliably. Don't want to mislead anyone here by omission.

I haven't thought about market effeciency. I expect it will come up in my future studies.
JO

 

[chump]

"I wish it were true, but I'm not trading now. I'm still working on setups. I can't see any reason to trade real money until my paper account can be made to go up reliably" ....good for you..probably the most valuable contribution made to this thread ....you' r e not a descendant of Daniel Boone are you

 

[mark_b_27]

I do not suppose that you have a chart with trend lines drawn.

I'm afraid that not being practitioner of the dark arts, the drawing of a pretty chart is beyond me.
However, if I was correct in picking that recent 'head and shoulders' pattern, doesn't that indicate that we're going into another sustained down-trend?
And what do the Fibonacci numbers tell us? Was post 161 a turning point or a support level?

My FA instincts told me that the thread was priced well below it's intrinsic value when I bought into it. In hindsight, maybe I should have set an initial stop-loss and bailed out earlier (hey Charlie).
There's no doubt that the selling pressure has been long and sustained.
Do I simply hold on and accept the fact that I'm holding an unfashionable stock in a seller's market?

 

[chump]

"Do I simply hold on and accept the fact that I'm holding an unfashionable stock in a seller's market?" ...depends if you need the funds (time in this case) elsewhere

 

[charliechan]

BTW, Go and have a look at http://www.dfaus.com/
A bunch of academics using pointless and irrelevant finance theory to successfully manage $69billion.

this means very little.

it only means they have baffled and confused $69billion that their theories that nobody else will understand works.

what are the returns like?

de shaw is a good case. despite hiring some of the finest academics the planet has produced, his returns, although good, are not incredible - especially in relation to his share of the academic community.

whilst on the point of managed funds, i think it will be interesting for some of you to read any recent fund managers year book. in there, they describe their investment approach in very general terms.

90% of them say they use a combination of ta + fa. perhaps some of you doubters should apply for jobs at these places, as you clearly think you know better than 90% of the worlds top money managers when it comes to long term buy & hold/pray.

 

[SOCRATES]

Just out of interest, are any of you TA's charting this thread? The way it trends, hits resistance levels, reverses, counter-trends, whip-saws, hits new highs, hits new lows.
Was it just me, or did anybody else notice that recent head and shoulder pattern?
Pure magic. I reckon you could fill a textbook.

Who needs ants when you've got all of this?

Joking aside, while I'm no scientist, but from by limited knowledgeof it, scientific study is based on the testing of theories by carrying out experiments in controlled conditions that can be replicated by others.
Ants are one way of studying how a large number of task orientated (anonymous?) individuals inter-react with each other and react to changing signals. Group behaviour.
Obviously ants aren't people. For one thing we can only speculate as to whether they are influenced by greed and fear (perhaps this in itself can teach us something). One advantage ants do have over real people is that while students are also pretty cheap, it was found that ants are easier to store in glass jars.

I realise that many people come here looking for the secret to making guaranteed quick and easy money.
They'll be disappointed to learn that a discussion on theory is neither quick, nor easy, nor in the end a guarantee of making money.
However, I find it bizarre that some of the same people who will happily tell you that it may require 3 or 4 years of consistantly losing money before you might gain the necessary skills and experience to trade charts profitable, are telling us that we're fools to even participate in this cost-less discussion on theory.

BTW, Go and have a look at http://www.dfaus.com/
A bunch of academics using pointless and irrelevant finance theory to successfully manage $69billion.

The Explorer Charles Darwin, who was very interested in all aspect of anthropology and went on to write his great work, the Origin of Species, was also very interested in ant behaviour. He went on to conduct several experiments to find out what ants reacted to and did not react to. Among his discoveries was the fact that ants do not react to noise of any sort, dull, sharp, loud. soft, or even subsonic. He even tried shouting at them. He came to the conclusion that ants are deaf. I thought this would be the appropriate opportunity to mention this to all of you.

 

[JumpOff]

Snort! -Ouch!

You really should warn people first Socrates. I was drinking a soda and then you made me laugh and now my snout is really sore...
JO

 

[SOCRATES]

You really should warn people first Socrates. I was drinking a soda and then you made me laugh and now my snout is really sore...
JO

I am sorry. The thing is, when I first stumbled on this it seemed far fetched. And so, I decided to put it to the test. This is because of my habit to test everything.I do not like not knowing.

I went out into the garden looking for ants.

I found a trail of ants.

I went back indoors and armed myself with a whistle, a trumpet, a rattle, a saucepan and a wooden spoon, and a transistor radio.

First of all some music....LOUD...no result.

Then a blast from the whistle...a referee's whisle...VERY LOUD, just imagine it can be heard across a football pitch...no result.

Then the trumpet...several notes...also VERY LOUD...no result.

Then the rattle...no response either.

Then the saucepan and wooden spoon...really noisy..VERY LOUD also...no result.

Then clapping..no response either..

Finally Shouting at the top of my voice...(several times, to make sure) ...no response.

Having now meticulously carried out the experiment myself I can now confirm to you that the original findings of Charles Darwin himself, have to be correct, that is, Ants are Deaf. Fact !

KInd Regards.

 

[mark_b_27]

Thank you Charlie,

You're last post has helped me understand where my problem lies.

It would appear that every time I log on to the internet, my ISP is somehow transporting me through the space-time continuum into a parallel universe.

In this universe TA is the accepted orthodoxy, and is used by 90% of fund managers.
Other methods of viewing the markets is looked upon with a high degree of scepticism.
Concepts such as finance theory and critical thought are potentially dangerous.
The less well informed need to be protected from rash promises of slow hard-earned profits.

You can be assured that I will discuss this problem with my ISP and hopefully have it rectified post-haste.
In the meantime, please accept my sincerest apologies for some of the silly things I have previously posted.

 

[mark_b_27]

Socrates,

Yes, ants are deaf.

Therefore the idea of studying ants to gain an insight into group behaviour is obviously preposterous.

Thank you for taking the time to clear that up.

I'm also in no doubt that Darwin would have been highly impressed by your experiments were he alive to witness them.

It also goes some way in showing us why you are so highly regarded my one and all.

Well done you.

 

[LION63]

90% of them say they use a combination of ta + fa. perhaps some of you doubters should apply for jobs at these places, as you clearly think you know better than 90% of the worlds top money managers when it comes to long term buy & hold/pray.

Yes we do know better than them as their collective performance is woeful to say the least. Go and check the performance of funds over the last 10 yr; 5 yr; 3 yr; 1 yr or 6 month period and then draw your own conclusions.

Does the fact that they are managing multi billion Dollar funds make them good at what they do? No. It is the poor man/woman on the street that is paying the price for their mediocrity. They are the lumps that push airline shares up when oil is hitting new highs; the fools are paying 100 times trailing earnings and rating these stocks a strong hold. They are still touting the Euro as the new reserve currency when it is facing the prospect of becoming extinct.

 

[charliechan]

I am sorry. The thing is, when I first stumbled on this it seemed far fetched. And so, I decided to put it to the test. This is because of my habit to test everything.I do not like not knowing.

I went out into the garden looking for ants.

I found a trail of ants.

I went back indoors and armed myself with a whistle, a trumpet, a rattle, a saucepan and a wooden spoon, and a transistor radio.

First of all some music....LOUD...no result.

Then a blast from the whistle...a referee's whisle...VERY LOUD, just imagine it can be heard across a football pitch...no result.

Then the trumpet...several notes...also VERY LOUD...no result.

Then the rattle...no response either.

Then the saucepan and wooden spoon...really noisy..VERY LOUD also...no result.

Then clapping..no response either..

Finally Shouting at the top of my voice...(several times, to make sure) ...no response.

Having now meticulously carried out the experiment myself I can now confirm to you that the original findings of Charles Darwin himself, have to be correct, that is, Ants are Deaf. Fact !

KInd Regards.

what did the neighbours think?

lol

but....

perhaps ants just dont hear along the frequencies we do - just as we cant hear dog whistles or those noises elephants make out of their foreheads.

ive no idea if ants are deaf or not. im sure taking one apart would reveal this.

however, this is a problem people are prone to suffer from. judging everything by our own terms of reference, and drawing incorrect conclusions based upon our self imposed bias.

perhaps we should ask ducatii. i believe he is quite knowledgeable about ants and has even attempted to teach them to trade or something.

 

[charliechan]

Thank you Charlie,

You're last post has helped me understand where my problem lies.

It would appear that every time I log on to the internet, my ISP is somehow transporting me through the space-time continuum into a parallel universe.

In this universe TA is the accepted orthodoxy, and is used by 90% of fund managers.
Other methods of viewing the markets is looked upon with a high degree of scepticism.
Concepts such as finance theory and critical thought are potentially dangerous.
The less well informed need to be protected from rash promises of slow hard-earned profits.

You can be assured that I will discuss this problem with my ISP and hopefully have it rectified post-haste.
In the meantime, please accept my sincerest apologies for some of the silly things I have previously posted.

did i say that 90% of fund managers use ta only? no i did not.

i think your issues could be well beyond your isp.