Come into the Trader's Den

[SwingKing]

i do listen to you as well.. and will continue to do so..

Same here.

 

[trader.trends]

Thanks TT for sharing such a wonderful research with us here.

here is piece of my research (bit old from mid 2009 or so) on similar lines

Up #	Total	Cumm
0	749	42.3
1	356	62.4
2	228	75.3
3	156	84.1
4	100	89.8
5	66	93.5
6	41	95.8
7	24	97.2
8	18	98.2
9	11	98.8
10	7	99.2
11	4	99.4
12	3	99.6
13	3	99.8
14	2	99.9
15	2	100.0

Notes -
1) it covers about 1700+ days of data that includes the bull mkt of 2007 and bears of 2008..
2) when count = 0, those days were down days.
3) last column cummulates the % of times when mkt crossed that sequence.
so if we see 93% for 5, it indicates that only 7% of days, when mkt could continue with more then 5 days of bullish trend.



similarly if u see > 8 updays in sequence, then there is hardly 2% chance that mkt will show us 9th positive day.. hence looking for shorting on 8th days is giving us 98% odd in our favour.


happy trading.

AW10
Thanks for the warm words.
Coming to your data either there is something drastically wrong with it or I am terribly slow on the uptake.
Pl clarify a few thing for me:
1. You are looking only at uptrend.
2. What does the figure 66 infornt of 5 mean? If I assume that 5 stands for 5 consecutive up days, then 66 means 5 consecutive up days occured 66 times? That is not really possible because then we have to multiply 66*5 and so on we will get a sample size of 3663 which is not correct. From the time NF started trading 12 June 2000 till 31 Dec 2009 we have only 2387 trading days. And if you have to give the number of days 5 consecutive up days occured does it not have to be a multiple of 5? Please clarify on this.

Second point is regarding your interpretation of how many times a five day up trend ended at five days and how many times it continued beyond five days. You seemed to have erred again in the interpretation part. If 66 infront of 5 indicates the number of times a five day trend ended then the total of numbers infornt of 6,7,8 and so on when added gives 115. (41+24+18+11+7+4+3+3+2+2). Which means on 115 times the five day trend did not end so you would be losing money if you bet that the reversal would occur at the end of a five day uptrend.

The probability of a five day trend reversing is given by =No of times 5 day trend ended/(No of times 5 day trend ended+ no of times five day trend did not end)= 66/(115+66) = .23

Please do correct me in my interpretation of your data because your conclusion totally contradicts mine but the data does not bear it out.

For your clarification, I have used NF data from 2000 till Dec31 2009. I also do not have an uptrend beyond 12 day. Could it be that my data is corrupt? It that is so then I need a more serious look into it.

Look forward to your clarification.

 

[DanPickUp]

Hi

I know Marc personally and I tell you, you would be surprised about what kind of person he is.

TV interviews are one thing and private life is an other thing.

I only can tell: The knowledge the guy has is incredible. The annalist around him are mountains of knowledge and he is the boss !

Funds which have a value of Millions and are managed from other companies like to have him on board.

Why ?

He is a strait person and handling his mentality is part of business. Nothing else !

Take care

DanPickUp

 

[PGDIMES]

marc faber is one of the guy whom i will listened to, anyday.
he is bullish on commodities, on china, and about 2/3 months back,he is also bullish on Japan equity mkt. He is also bullish on agriculture..

He is just not a trader but also teaches economics in some university.. and he trades long term fundamentals.. He sold his house in US to cut exposure to USD and moved to singapore currently where he is grooming his 4/5 years old daughters in Mandarin language to face the future..

happy Trading

Hi AW10,

I think you are talking about Jim Rogers...

 

[AW10]

Hi AW10,

I think you are talking about Jim Rogers...

PGDIMES, yes you are right..
i seem to get confused between marc faber and jim rogers.. and that's what was the case here too.. I will edit my post above..

Thanks for highlighting it...

(seems, i still not recovered from holiday mood and hence acting slow in digesting the info).

happy trading

 

[DanPickUp]

Hi

Something a little bit more complicated to read and quit interesting.

The first article is about : Just How Much Do Individual Investors Lose by Trading?
http://rfs.oxfordjournals.org/cgi/content/abstract/22/2/609

A brief conclusion :

Individual investor trading results in systematic and economically large losses. Using a complete trading history of all investors in Taiwan, we document that the aggregate portfolio of individuals suffers an annual performance penalty of 3.8 percentage points. Individual investor losses are equivalent to 2.2% of Taiwan's gross domestic product or 2.8% of the total personal income. **Virtually all individual trading losses can be traced to their aggressive orders.** In contrast, institutions enjoy an annual performance boost of 1.5 percentage points, and both the aggressive and passive trades of institutions are profitable. Foreign institutions garner nearly half of institutional profits.

After reading the whole PDF : ** This sentence is for me as retail trader the most interesting conclusion in the whole article. It shows clearly, that individuals more tend to speculate and hope of the quick big run than the professional, institutional traders do. And here is one of the biggest reasons clearly explained and explored, why so many retail trader loose there money in trading.

Here is an other PDF which gives informations about : Return autocorrelation and institutional investors. You may not want to read the above PDF, after you have the conclusion, so enjoy that one. It has a lot of interesting points to think over.
http://www.mccombs.utexas.edu/faculty/laura.starks/sias starks jfe97.pdf

Take care and have a good start in the new week.

DanPickUp

 

[darkstar]

Hi

Something a little bit more complicated to read and quit interesting.

The first article is about : Just How Much Do Individual Investors Lose by Trading?
http://rfs.oxfordjournals.org/cgi/content/abstract/22/2/609

A brief conclusion :

Individual investor trading results in systematic and economically large losses. Using a complete trading history of all investors in Taiwan, we document that the aggregate portfolio of individuals suffers an annual performance penalty of 3.8 percentage points. Individual investor losses are equivalent to 2.2% of Taiwan's gross domestic product or 2.8% of the total personal income. **Virtually all individual trading losses can be traced to their aggressive orders.** In contrast, institutions enjoy an annual performance boost of 1.5 percentage points, and both the aggressive and passive trades of institutions are profitable. Foreign institutions garner nearly half of institutional profits.

After reading the whole PDF : ** This sentence is for me as retail trader the most interesting conclusion in the whole article. It shows clearly, that individuals more tend to speculate and hope of the quick big run than the professional, institutional traders do. And here is one of the biggest reasons clearly explained and explored, why so many retail trader loose there money in trading.

Here is an other PDF which gives informations about : Return autocorrelation and institutional investors. You may not want to read the above PDF, after you have the conclusion, so enjoy that one. It has a lot of interesting points to think over.
http://www.mccombs.utexas.edu/faculty/laura.starks/sias starks jfe97.pdf

Take care and have a good start in the new week.

DanPickUp

thanks dan sir i will always appreciate you

 

[DanPickUp]

Hi

Some thought on : Using Rules to Time Your Entry

The guy speaks only about stocks and his example is shown on a stock. The ideas he explains are also very useful in option trading (my personal experience) and if you are a future trader, it also will give thought for that derivative. The ideas stay the same and you only have to adapt it to the conditions, which you have to work under in the given derivative.

Here it goes :

There are many ways to time an investor's entry into a stock, though there are three strategies that work best for value investors and swing traders. First, enter a breakout through resistance, or a breakdown through support. Second, wait for a pull back to support (if going long) or to resistance (if going short). Third, buy or sell within a trading range before the move begins.

If you want to read the whole article, here the link :

http://www.marketoracle.co.uk/Article493.html

Have a nice day

DanPickUp

 

[jrao_2001]

Hi,

I am new to this forum and looking for a good mock trade link to practice F&O segment. Any idea which is the best place to learn on NSE or BSE?

Note: I am not looking for cash market or commodity mark. Thanks

 

[rrmhatre72]

Hi AW/ Raunak/Dan,

Your views on techniqs explained in this recorded webinar.
Ignore introductions about their company at the start.

http://www.screencast.com/t/Mjk3OWZhYm