AI
Tuesday, November 02, 2010 10:16:39 AM
Clive, Investing is a bit like fluid flow control(Tom will like this 
)!
. . .the ladder is just a visual representation of the log stochastic and you might only trade at perhaps moving average cross overs or whatever signal you prefer. At which time you calculate (log(current)-log(bottom))/(log(top)-log(bottom))
I am with you on the basic idea of the ladder when starting at the Midpoint. Interesting here is that the "equal percentage steps" as you use them is very much the same as the function of an equal percentage control valve for fluid control problems: when the valve is closed for Step 0 Q=0. . . This appears to be somewhat like the d'Alembert system you refer to:
Step # and a 30% increase per step:
0; Q=0
1; Q=1000. . . this would be the midpoint for the ladder.
2; Q=1300
3; Q=1690
.
.
10; Q=8157. . .this would be an 18 step ladder for the full rangeup and down.
This shows a strong progression for the incremental flow Q (or investment I), at each step from the midpoint. In effect I am using this principle in my scheme although I used a different function for the increase.
One of my solutions to: "What to do after a price reversal?" was simply repeat exactly the same process. . .a sort of iterative system at the new position. The new midpoint position would simply have a different starting value and again I would have 5 steps up and 5 steps down. It appears to be the same as you are saying:
If we reset and start afresh then we have a ladder such as the one on the right, i.e. we've re-centralised with a new lower top and lower bottom price levels.
But if I have moved up the ladder 3 steps I am close to the top and with a reset I have again 5 steps to a new top, which would be much higher than the trading range. . .but on the way down I have 8 steps left to the bottom. For my progressive system I would have exhausted the Reserve in 5 steps but then I am not yet at the bottom of the trading range. It would appear that I would have to redefine the ladder to 8 steps down in order to take advantage of the progressive Buy Amount structure I have set up.
My system would be fine IF the trading channel moves upwards along the lines of my 5 steps to the top and the 5 steps to the bottom. . . . I am just thinking now of something. . . . If I monitor the movement of the trading channel I see after every so many moves where the new top and new bottom are going to be and I can always find a new midpoint for resetting the ladder. So in effect it is not simply to set the new midpoint position at the latest trading price but to use the new Reserve and new Equity Value as starting values on the midpoint of the new trading range. This way the ladder moves up or down as if its its midpoint is “fixed” stepwise to the midpoint of the developing trading channel. I think that may be a neat solution for the problem I face!
Clive, Is this actually what you are suggesting?
)! . . .the ladder is just a visual representation of the log stochastic and you might only trade at perhaps moving average cross overs or whatever signal you prefer. At which time you calculate (log(current)-log(bottom))/(log(top)-log(bottom))
I am with you on the basic idea of the ladder when starting at the Midpoint. Interesting here is that the "equal percentage steps" as you use them is very much the same as the function of an equal percentage control valve for fluid control problems: when the valve is closed for Step 0 Q=0. . . This appears to be somewhat like the d'Alembert system you refer to:
Step # and a 30% increase per step:
0; Q=0
1; Q=1000. . . this would be the midpoint for the ladder.
2; Q=1300
3; Q=1690
.
.
10; Q=8157. . .this would be an 18 step ladder for the full rangeup and down.
This shows a strong progression for the incremental flow Q (or investment I), at each step from the midpoint. In effect I am using this principle in my scheme although I used a different function for the increase.
One of my solutions to: "What to do after a price reversal?" was simply repeat exactly the same process. . .a sort of iterative system at the new position. The new midpoint position would simply have a different starting value and again I would have 5 steps up and 5 steps down. It appears to be the same as you are saying:
If we reset and start afresh then we have a ladder such as the one on the right, i.e. we've re-centralised with a new lower top and lower bottom price levels.
But if I have moved up the ladder 3 steps I am close to the top and with a reset I have again 5 steps to a new top, which would be much higher than the trading range. . .but on the way down I have 8 steps left to the bottom. For my progressive system I would have exhausted the Reserve in 5 steps but then I am not yet at the bottom of the trading range. It would appear that I would have to redefine the ladder to 8 steps down in order to take advantage of the progressive Buy Amount structure I have set up.
My system would be fine IF the trading channel moves upwards along the lines of my 5 steps to the top and the 5 steps to the bottom. . . . I am just thinking now of something. . . . If I monitor the movement of the trading channel I see after every so many moves where the new top and new bottom are going to be and I can always find a new midpoint for resetting the ladder. So in effect it is not simply to set the new midpoint position at the latest trading price but to use the new Reserve and new Equity Value as starting values on the midpoint of the new trading range. This way the ladder moves up or down as if its its midpoint is “fixed” stepwise to the midpoint of the developing trading channel. I think that may be a neat solution for the problem I face!
Clive, Is this actually what you are suggesting?
Conrad Winkelman
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