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In theory something that consistently loses money will make money if the system is flipped over. In reality it doesn't work because often the loses come from commissions and slippage. Other times there's an inherent problem in the design that I guess I have to call slippage although not the type that comes from placing the order. Anyway that type of slippage, lets rename it the "give up" remains the same even when the systems inverted so it will always be a loser but 1 thing most all system testers do is try fading their losing systems.
LG, it's like I said earlier I realize there's a touch of a semantic misunderstanding between us as to the meaning behind the words that as technicians we must accept that absolutes don't exist for us. If I thought that it was entirely semantics I wouldn't be beating a dead horse but I ask of you to consider for a moment the methods that I use.
I don't do any of the techniques mentioned because I believe all of them have lost their connection to the basic truths at the foundation of TA which is: Close[1] = Close[1].
Everything I do calculates relationships between closes for example although I do use other truths too. But just taking closes into account say I'm looking at the relationship of c[ i ] to c[i+1] where i represents a given close and is incremented to compare the given close c to another close c.
Those types of measurements are absolute. The results of testing will always return the same when applied to the same data. Hence the results are absolute. The variance is based on the difference between in and out of sample testing not being an exact data match. But given that data can be classifed numerous ways it's possible to then state the probabilty of a given algorithm to return a value within a range based on it's tested output on similar data.
Ok, tear that appart if you like but that's my belief. Absolutes exist. And please forgive me for the transgression of not wanting to stray into all that stuff that's so far from measuring anything specific that I and everyone would of course immediately aggree that "it is not an absolute" but I don't think that argument can be used to generalize and say that absolutes simple don't exist in technical analysis.
Regards, MM
Bollinger bands are an area I'm weak in. I've never given them much of a look until I was exposed to talk of them on this thread earlier. I haven't done the work yet but I have a lot of notes that I'm thankful for.
suppose a system is consistently evenly split over 50% wins and 50% loses. If the sample period is large enough and includes the types of price action (trend, chop, sloping chop) then to me it's 100% certain that it will continue to be the same under the same conditions. One argument against that would be that the future won't be the same as the past but it's my opinion that rigorious testing combined with a deep understanding of what types of price movement will cause it to fail or succeed ... that's a good enough reason for me to believe that it will continue to perform the same in the future. And if the future is different then by knowing how the system changes when the market chops more than it did during testing will immediately make it apparent that the expected results need to be adjusted acordingly to acount for the proportion of chop to trend.
And for me too discipline is a real bugger. I've no problem taking signals when I'm supposed to. I have that discipline down. But managing aspects of my personal life leaves a lot to be desired and it's all due to a lack of discipline on my part. I've got to get control of the few things in my life I can and should have control over. My actions, how I spend my time, ect. those are the things I mismanage and it's not good to be weak in the few things where I have the choice to be strong.
Regards, MM
But yet you're able to trade counter trend upswings off the bottom during a bear market! I've given quite a bit of thought to that unfortunately I don't have my notes in front of me. So how do you do it?
I'd like to ask that the thread participants offer their views on whether we as technical analysts must accept that absolutes don't exist or whether we must accept that they do exist.
there are no absolutes
I believe Aristotle the founder of logic and reason could argue that asertation with you quite eloquently. Me, I can't but I do disagree. Although having read enough of your posts I think it's somewhat of a semantic matter and would let it go if I thought that was all it waswr. Howver I sense you truely feel that nothing can be relied upon as a truth, an absolute.
I offer these absolutes as a beginning:
Open=Open;
Hight=High;
Low=Low;
Close=Close;
I believe it fits under the law of identity which unfornately (or perhaps fortunately for our readers sake <g>) I'm not well versed in but it begins something like this:
A is A
So whenever you're thinking absolutes don't exist check your premises and how far you've strayed from the original absolutes. If indeed at that point the values are no longer absolutes then there's a logic bug somewhere in the calculations as the derivatives were created from the orignal truths.
You need to work on your discipline. <g>
If the wags are in a tight range either above or below c[1] then the odds favor taking the top or the bottom spot. Of course you already knew that! Congrats again, it was a good wag.
Lol, there's some creative minds out there! I like it.
~~~~ COMPX 11/27/2002 ~~~~~
Previous Close 1444.43
1473 MM
How much does it cost?
889
Who you calling dude?
test 123
Still LOL
test 1
test
Even with all the filler I add to make sure the good stuff sinks to the bottom! <ng>
I'm interested too but haven't had anything to contribute. At least you know there's more people studying this topic than there are posting here.
Nice wag SagDec15!
~~~~ COMPX 11/26/2002 ~~~~~
Previous Close 1481.90
1464 WTMHouston
1468 timhyma
1471 AKvetch
1496 shao
1501 Phil
1511 MM
1525 Muell
1625 broderick_s
LMAO! You've got style Zeev. I like that.
Hi LG,
Sorry about not responding earlier.
Augie complied some notes in which Zeev mentioned a parallelepiped. I didn't know what it was and in the process of trying to understand I tried reducing it to triangles. The triangles that interest me are probably different than what others are interested in. I need something with 3 points that I can clearly label. The peaks and troughs method that you use is the type of triangles that I look for and label, if I'm looking and I'm not always looking. but when I am then I find a lot more data points than I know what to do with because I have to accept everything that fits the description. If the result isn't something I can use then I have to change the description.
This post is getting way too long and I find myself rambling so I won't go further. But I hope that explains what we were up to while you were out of town. Btw, it's great that you're back! We missed you.
Best regards, MM
~~~~ COMPX 11/25/2002 ~~~~~
Previous Close 1468.74
1497 MM
That's a grubby thing to say.
It's ok I still have to read your's twice!
It's good to know I'm not the only one that understood that note! I was starting to worry.
LOL! I had to read that twice before it made sense.
What a great idea for breakfast!
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WARNING: this link could crash your browser: #msg-595479
Wow! Cool! Thanks!
Are you saying the 24 point matrix of 6 parallelograms is spot on ...if it contains time, price, and specific volume for each of the 24 data points? When you mention step function do you mean Heaviside step function or one it's variants like Walsh?
Thanks Zeev,
That's an interesting way to average volume. It's quite valid and superior to anything I've ever heard of.
Regards, MM
Thanks and you're right I was mistaken. I think the 3rd axis is signal data extracted from time price. Decomposition is a word that comes to mind. I doubt the 3rd axis contains time based signal ...but I like it for storing price relationships.
There's too many 2D parallelograms in the series. It can be truncated to allow for a 3rd signal axis but I can't picture it yet. 2 parallelograms seems like plenty.
Off Topic:
I only recall signing my name as The Mechanical Muffin once before prior to today. It's a tribute to an author I've read and when it occurred to me that none of the material in today's note came from his book I signed it accordingly.
We often see triangles in the market. The most common mechanical method for labeling triangles is Andrew's pitchfork. If drawn correctly it identifies triangle ABC. The bisection of BC and the line from A through the bisection doesn't enhance my understanding of parallelepiped's so I'm focused just on triangle ABC.
Triangle ABC exists.
Triangle BCD is a sequential triangle that shares BC in common with triangle ABC.
Parallelogram ABCD exists.
Extending the sequential triangles ABC and BCD to yet another triangle CDE gives us another parallelogram BCDE that's sequential to parallelogram ABCD.
Parallelograms ABCD and BCDE form 2 sides of a parallelepiped. Continuing the process of labeling sequential parallelograms defines the parallelepiped ABCDEFGHI composed of:
1. parallogram ABCD
2. parallogram BCDE
3. parallogram CDEF
4. parallogram DEFG
5. parallogram EFGH
6. parallogram FGHI
Parallelepiped ABCDEFGHI expressed as an array might look like this:
ABCD
BCDE
CDEF
DEFG
EFGH
FGHI
It depends on what type of data mining or higher math is used to analyse the array. It'll be amusing if the heavy side step function correlates with that type of array.
The Mechanical Muffin.
I haven't looked that one up yet but I plan too! :) I'm guessing it's a 2D diamond but then he would of said parallelogram so I guess I don't know until I hit the search engines.
That's a cool link. Thanks. I reread some stuff and it's clear he meant the other kind of steps like in a house.