Come out and fight!

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i_claudius

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Post Number: 1343
Registered: 11-2002

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Votes: 0


Friday, February 13, 2004 - 05:40 am:

Hello Shaguar

I am pleased to find you agree there is no easy road.

I have yet to see the evidence that TA is time saving. As to cost saving ... money management principles can be used whether one is using TA or FA

Regarding "easy to use" I have yet to see the evidence that such systems exist

I agree that TA provides a degree of objectivity and I have never said that the two methods are in conflict with each other.

My view is that they work best when used together.

Finally let me assure you that in the end nothing is more important than the trend of the cash and realisable assets ratio ... but the movements of sentiment around underlying value as seen in charts are certainly worthy of study.

I have never opposed the use of TA ... only exaggerated claims made for its ease of use.

It is also instructive to note that many TA "experts" disagree. I've been receiving e-mails for 12 months telling me the US market is on the verge of collapse and that deflation is upon us ... meanwhile the US indices have had one of their best years ever. Perhaps this explains my somewhat jaundiced view of some TA "expertise".

By contrast the Trading Diary of Colin Twiggs is clear and informative.

With Best Wishes

Roger (Executor of the Claudius Literary Estate)

QUOTATION :- "Never stop questioning" ... Posted by Bundy in the Options and Derivatives Forum on Friday, 16 January, 2004 - 21:40

deanrosario

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Post Number: 217
Registered: 11-2002

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Votes: 1


Friday, February 13, 2004 - 06:06 am:

Good morning, Roger

Why is it that "exaggerated claims" on an anonymous, public forum cause you so much angst. (Interestingly, I think I am one of the few people who doesn't hide behind a pseudonym and actually uses his real name...)

I could think of no better medium to disseminate "exaggerated claims".

Why do they bother you? Why not just smile and move on?

I think there are many outrageous and exaggerated claims made within "The ASX" thread on the forum - especially since the markets started their bull run during the middle of last year.

But, why, should it bother me?

I just smile and move on - each to his own.

Good trading to you today.
DR

i_claudius

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Post Number: 1344
Registered: 11-2002

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Votes: 0


Friday, February 13, 2004 - 06:24 am:

Hi Dean

Excellent question

I actually do discount many claims about individual stocks

When it comes to systems that are said to be sure fire my interest is always raised ... until the inevitable let down follows except when genuine information is offered such as your own postings on trading setups.

Perhaps like you I should simply smile and walk away, and continue my researches into your setups and those of some others such as DR and Shawky ... and the practical application of Elder, Tharp and Weinstein ... whom I regard as useful, clear, and well substantiated.

Still if there are any who feel they can improve on Elder, Tharp and Weinstein, and give clear supporting evidence, my interest could be aroused ...

With Best Wishes

Roger (Executor of the Claudius Literary Estate)

QUOTATION :- "Never stop questioning" ... Posted by Bundy in the Options and Derivatives Forum on Friday, 16 January, 2004 - 21:40

shaguar

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Post Number: 227
Registered: 10-2002

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Votes: 0


Friday, February 13, 2004 - 07:11 am:

Hi i_claudius,

The statements I made above is just my subjective view and judgement over TA vs FA. And things can vary from person to person since we have different personality and ability to handle different informations. So, I wouldn't agree or disagree on your comments.

DR,
"Interestingly, I think I am one of the few people who doesn't hide behind a pseudonym and actually uses his real name..."
You never know whether or not "Roger Hatton" is actually another alias of "i_claudius", nothing can be too sure in cyber space.

Cheers,

Shaguar.

scarrie

Member

Post Number: 91
Registered: 08-2003

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Votes: 0


Friday, February 13, 2004 - 08:57 am:

Hi all,
This discussion about whether TA works or not, and whether it is simple or not, has been going on on this and other threads for a while, and as spider has pointed out in the past, "it is a good discussion that people can sink their teeth into and distract them from discovering the reality of how simple it is." It can't be proven because it is an issue of opinion, not an issue of fact. Its 35 degrees in Adelaide today. In my opinion thats not overly hot, but I'm sure any visiting eskimos would probably disagree. I can't prove to them that it is not hot, its just my opinion. If they don't like the heat, then they could just go home.
I'm with spider. Keep the discussion going forever.
Cheers
Dave

bundy

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Post Number: 230
Registered: 03-2003

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Votes: 0


Friday, February 13, 2004 - 09:22 am:

Dean,

You said............

"Interestingly, I think I am one of the few people who doesn't hide behind a pseudonym and actually uses his real name."

------------------------------------

I have me full name in my profile - as do many others.

It's ok for you - deanrosario looks and sounds neat.

arthursawilejskij looks like someone dropped something onto their keyboard.

Besides, I get an "overflow error" when I try to use my real name in the handle space.

---
Bundy

Good judgment is gained through experience.
Experience is gained through poor judgment.

deanrosario

Member

Post Number: 218
Registered: 11-2002

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Votes: 0


Friday, February 13, 2004 - 09:40 am:

Arthur - now that's such a noble name!

Camelot and chivalry and fair maidens to be rescued!!

OF course, a surname like Sawilejskij is as common as Smith, Nguyen or Mohammed in Multicultural Melbourne!

Dean

(Message edited by deanrosario on February 13, 2004)

i_claudius

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Post Number: 1345
Registered: 11-2002

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Votes: 0


Friday, February 13, 2004 - 10:48 am:

For the record :-

I have never claimed that TA does not work

What is clearly nonsense is the claim that Blind Freddy or a 5 year old child can use TA

The latest suggestion that TA comprises opinions not facts is just another way of avoiding showing evidence that particular forms of TA do work

I repeat ... when someone can show evidence they have a system that is superior to Weinstein or Elder or Tharp or the Twiggs Daily Diary I for one will be extremely interested

Roger (Executor of the Claudius Literary Estate)

QUOTATION :- "Never stop questioning" ... Posted by Bundy in the Options and Derivatives Forum on Friday, 16 January, 2004 - 21:40

scarrie

Member

Post Number: 92
Registered: 08-2003

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Votes: 0


Friday, February 13, 2004 - 11:25 am:

For the record:
Many people believe that Blind freddy and a 5 year old can use TA, they just can't prove it, because it is a matter of opinion, not of fact.

I don't suggest that TA is a matter of opinion, not fact. Indeed I am in my current dilemma with ANZ and WBC because I formed an opinion on what I think the stocks should do, rather than looking at the facts on the chart of what they were actually doing.

I make the claim that TA is simple, not overly complicated, whatever term you may choose, but that is a matter of opinion that I cannot prove, I just happen to believe it. I haven't got myself so convinced that TA is a complex art that can't be mastered that I cannot see what is right in front of me.

This bloody discussion is starting to distract me now.
Cheers

bundy

Member

Post Number: 231
Registered: 03-2003

Rating:
Votes: 3


Friday, February 13, 2004 - 11:29 am:

claudius

You are misrepresenting what I (and others) said.

I never said TA was easy or that "a 5 year old child can use TA ".

What I said was ..........

"A trend is a trend is a trend (if in doubt - ask a 5 year old if a stock is trending up or down - it should be that clear - if not - pass on the trade)."

Shaguar also didn't say TA was easy - what he said was...........

"Once someone has develop the technique it could be easy to use (depends on their approach of course). "

Which is also true.

You and dave (and some others) have come to TA relatively late in your trading life.

That's ok - but you need to put things into perspective.

Some of us have been at it a bloody long time.

You can't possibly hope, at this stage of your TA journey, to understand or comprehend or amass the knowledge of long-time TA exponents - particularly those that do it for a living.

Nor can you expect us to simply lay it all on the table to satisfy your curiosity or frustrations.

I've worked hard on my trading over the years - I still do!

I spend a few hours most days reading trading-related material - not just the generic stuff the mainstream authors put out - but also technical and empirical papers and studies.

I study charts - any chart I can find - to get an idea of other people's perspective on things.

I've tried just about every indicator there is - not just tried them - learnt how they work - why they work - why they don't work, alternative ways to use them, backtested them, etc.

Of course I've made mistakes along the way - and the situation has been compounded by the fact that I choose to trade options short term - which is doubly hard (Mind you - there are some advantages of trading options - it's easy to short a stock - or, if you have absolutely no idea of where a stock is heading but know where it is not heading - you can always sell options.) - but as the tagline to my signature says.........

"Good judgment is gained through experience. Experience is gained through poor judgment."

Through this process I've developed a simple set of trading rules.

But as I said - the road to get there has not been simple.

Don't confuse the two!

My trading rules don't use any indicators - it can't get simpler than that.

---
Bundy

Good judgment is gained through experience.
Experience is gained through poor judgment.

starboard_tack

Member

Post Number: 99
Registered: 04-2003

Rating:
Votes: 1


Friday, February 13, 2004 - 11:31 am:

I think that I'm going to regret entering into this discussion, but here goes anyway.....

The debate very much reminds me of the age old debate about which religion is "right". Words like "opinion", "proof" etc have to be taken in the context of each individuals mindset and values. The word "faith" may even be relevent here. People have faith in their religion and often feel they have "personal proof". But we still get many differing views.

For me, I have "personal proof" that TA can work. But I am currently doing a lot better with my FA picks! Why?

I think that I took my very simple TA system, and then added to it too quickly. That made my TA methods too complex. Snifter always says "keep it simple". I also didn't have faith in it - so I didn't stick to it! ("Plan the trade, and trade the plan")

When I started out to manage my own hard earned capital (and stopped wasting time and money on "advisors"), I had not even heard of TA. I had been watching my portfolio for a while. It included BHP. Being a computer programmer, I started to notice some patterns in the price movement of BHP. I decided to download 5 years of daily historical data into a spreadsheet and see if I could "program" my ideas. I built in to it the costs of brokerage, and had it spit out buy and sell instructions on the open of the next trading day. The result was that I would have averaged over 20% return per year over the 5 years. It did make losses, but overall it worked well. So I started to trade real money. Guess what - the first few trades lost! So I put it away. I didn't have "faith" in it. I have now realised that I would be ahead now if I had stuck it out!!

At the same time as I was developing this (TA) system, I rebalanced my portfolio using FA. I have to say that 12 to 14 months later my FA picks are generally doing very well.

So, what am I saying? It has taken me over a year to learn what a lot of very generous guru's on this site have been saying all along. "You have to develop your own style". It is very much a personal thing. If you want "proof" then you have to develop it yourself - it is "personal proof". Nothing will work unless it works for you. A system might be simple, and it might work well for someone else, but does it fit your own mindset and belief system?

Unfortunately, there doesn't seem to be a quick way to gaining the keys to the executive wash room. You just have to take on board the great advice from the very generous people here, and slog it out for yourself. The advice will help you to protect your capital while you are slogging it out. At least that way you wont fall off by the wayside like so many seem to have done.

Good luck to all, and keep focussed,
Starb'd

tony_m

Member

Post Number: 83
Registered: 01-2003

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Votes: 2


Friday, February 13, 2004 - 12:41 pm:

Good to see the ongoing discussion, healthy and as always a source of info for the newcomers. I wanted to buy in to put some meat on the FA component. I use both FA and TA, FA for stock selection pool and risk management and TA for timing.

I suspect from looking at a lot FA/TA posts that FA is viewed as some sort of 'pipe and slippers' approach to investing. Not the way I see it, I believe FA gives me a real edge in getting good returns against a backdrop of lowered risk.

FA is not only about PE ratios, it is about a bunch of critical elements...
1. FA allows quick identification of well managed companies with a good balance sheet. Ignore the others. There are 'click of a button' tools to do this in seconds. (Can provide more detail)
2. Share price growth is linked to earnings growth, if you graph them they go hand in hand very consistently. Dont buy in if earnings growth for at least 2 years is not above at least 20%.
3. Dont buy overvalued companies. The PE should be less than the industry average and if it isn't then the PEG should be less then 1 to make sure the price has room to move.(tools to do this easily)
4. Check the announcements for any bad news.

So if you have 1, 2, 3 and 4 you have a some of the ducks lined up.

Next look at trend (I use weekly multiple moving averages but 15/30 weekly EMA is just as good). I generally steer clear of the early stage of trend a la Weinstein. look for low volatility, good way to see this is price action above 15 WEMA and not breaking through it. Has to be in solid uptrend (stage 2)

I then look at projected rate of return (progammed into Metastock) and wont buy unless projection is > 40% PA or if lower is trending up solidly. More ducks lined up.

Next look for dip to buy into, plenty of ways to do this already published by Snifter such as Stoch < 50% or 5 week ROC turns up from below zero. In some cases may have to bite bullet if in no dip in sight. Depends how strong the urge.

There are other factors like liquidity but that depends on individual preferences.

Then shoot. I run with a about 15 stocks, so far so good and I only invest long. I am a bit more sanguine about handling downturns than others because of the risk management focus in the portfolio plus I keep a couple of years living money in cash.

Re exits, I use a combo of Projected rate of return dropping to around 10-15% PA (signals a likely start of stage 3) or average true range of around 3. Until I get in the black after entry I set my stop at around 10%.

How is it going, pretty good as far as I can see, the last 2 weeks XAO up 1.9%, me 3.95%. In that time I bought one stock (MXI), sold and bought back into FWD mainly to protect some solid profits until the smoke cleared.

Hope this is useful for someone with similar investment profile..
Tony_M

zorba

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