jonathan <maatschj@[EMAIL PROTECTED]
> wrote in message
news:OT%Dj.22123$dT.10080@[EMAIL PROTECTED]
> "Bill Reid" <hormelfree@[EMAIL PROTECTED]
> wrote in message
> news:Ms_Dj.22159$D_3.15454@[EMAIL PROTECTED]
> > jonathan <maatschj@[EMAIL PROTECTED]
> wrote in message
>
> > I'm getting bored...what makes you THINK that these results
> > aren't the result of "luck" rather than design?
>
> Too early to say, but the results have been steadily improving.
What is the significance of the results "steadily improving?"
Have you changed your trade selection criteria?
> Of the five losers, two of them were the very first two trades (-3%
each)
> where I was more interested in seeing if the account still worked.
> And a third was a 9% percent loss that was a fluke I believe.
> I bought the stock online as usual, but when I went to sell
> a couple of hours later that day, dear e-trade said the stock
> can only be sold through a broker now, not online anymore.
> Since it was going up too fast.
So you're day-trading a single "rocket ****p", probably a low-priced
issue. You've already got a ton of volatility inherent in the stock,
which
tends to negate any market out-performance of your short-term results
statistically...
> By the time I got a broker a nice gain turned into the loss.
> The other two losers were 2% each.
I'm assuming that trading gap did not CAUSE the losses, right?
> But 8 out of the 13 winners were 5%, %5, 7%, 10%, 10%, 10%17%,23%.
This sounds like either a penny stock, or maybe Bear Stearns (same
difference)...
> And this is trading while I can only sneek onto the company
> computer for less than an hour a day, and mostly using
> my cell phone for trading. With it's little-bitty fuzzy charts.
So you're using charts for your trade selection criteria, and
nothing else? You're just using a time series of the price data
(and maybe volume), and nothing else?
BTW, this is called "charting" in stock trading (great name!),
and of course traders have been doing it for years. Just using
a time series of price data as trade selection criteria is
generally referred to as "technical analysis" by traders...
> >> The basic idea behind my trading system is outlined
> >> abstractly in the first link....great stuff.
> >
> > I ain't gonna look at it...what's it say?
>
> It says, that under certain dynamical states, all stocks will
> behave in the same way. And (only) at this state, the behavior
> becomes not at all dependent on the specific inner details of the
> company at hand.
This is also the key concept of all "technical analysis", but
the "true believers" will aver ALL future price action can ONLY
be reliably traded based on past price action.
The moth in that particular buttermilk is something like the
sudden near-bankruptcy of a major investment bank, but they
parry that by noting that you can rarely if ever predict stuff
like that anyway (personally, and statistically, I don't agree
with that).
> Also, (only) this dynamic state is defined the
> theoretical point at which volatility and predictability
> converge to /simultaneous/ maximums.
Well, one specific use I make of the "chaotic boundary" (another
name for what you're talking about) is for option trading, which can
be quite profitable if you can predict increases/decreases in volatility.
So I have been using some very specific techniques related
to what you're talking about for about 18 years now...
> These are some of the key properties of what is called
> The Edge of Chaos. You already know the basic idea
> but probably don't realize it's potential.
<John McLaughlin>WRROOOONNNGGG!!!!</John McLaughlin>
> A cloud, while a cloud, stands persistanly poised at the
> transition point between water and va****. It's at the
> Edge of Chaos. What happens if the temp or humidity
> changes even a bit? The cloud suddenly becomes....either
> water or va****.
Yeah, yeah, yeah, things fly apart, the center cannot hold...
> A very dramatic yet predictable change that occurs
> in the very same way every time, regardless of the
> nature of the system. Living, physical or even emotional.
I like how crazy people get when their stock trading schemes
don't pan out...which is of course part of the "chaos" of the
market.
> The trick is to find a chart that is at this delicate transition point.
Can't you parse out the condition using just the price data
alone? That's what I do, but I also have the capability to "read"
charts for "patterns" algorithmically if need be...in any case,
to either rigorously test or most profitably utilize your
"discovery", you need to be able to apply it to tens of
thousands of past/future charts quickly, the way only a
computer program can do it...
> Drive a system just far enough from equilibruim, and they can act
> like a flock of birds when driven by good news.
> Or thunderstorms when the news is gloomy.
I liked the rats in college. If they got a reward for pressing
the green button, they would press the green button more and
more, and if they got a punishment for pressing the red button,
they would press the red button less and less.
And if you just randomly gave out rewards and punishments
for pressing either button, they would go crazy, and begin posting
all kinds of racist idiotic hair-brained contradictory conspiracy
theoried stock trading strategies on Usenet...
> Either way, dramatic yet predictable change takes
> place at or near either extremes in possibility.
> Whether a bubble bursting or a company teeteriing
> on the brink of disaster. Exploring the sweet spots
> or transition points of either /extremes/ are where
> it's at.
Been there, done that, made enough money to buy
my own T-****rt. You need to test this a LOT better
than just running a test with your own money, and the
fact that you began "testing" with your own money
without apparently performing back-testing casts
doubt on the rigor of your "research" to come to
this amazing "discovery"...
> >> I think I can claim
> >> to have successfully used Chaos Theory, now called
> >> Complexity Science, in creating a very simple trading system.
See above.
> > Where have I heard this before? Oh, that's right, right in this
> > newsgroup (misc.invest.stocks) from a guy who posted a few
> > times, couldn't back up any of his claims, then disappeared...
>
> That probably would be me, I've been working on this for
> a couple of years.
It was a little longer ago than that, if I recall. But over the years,
all the amazing "discoveries" just kind of blur together, you know...
> I'm finally giving it a test with larger
> sums of money.
Again, how many times have I heard THAT before? Anyway,
nice talkin' to ya...I mean, you do understand that the amount
of money YOU "test" it with has NOTHING to do with any actual
"proof" that the system works, right?
> Eh hum...I finally have larger sums of
> money to test it with...I should say~
> In the past it's tested out about the same.
So DID you actually perform rigorous back-testing, or just
do a little trading and declare "victory"?
> >
> >> I think I've finally done it!!!
> >
> > You THINK?
>
> I'm pretty sure, but ya know, I've been wrong once or twice~
We all have, but in this case there's a way to be pretty much
right the FIRST time, potentially saving you a lot of your hard-earned
dollars...
> > Do you know the difference between "thinking" and "hoping"?
>
> Amount of data.
BINGO!!!! Now apply that concept rigorously, and if it truly
works, "do the right thing", never post here again, make a fortune
in secret!
> The trades so far are only a tease, more than hope
> but less than sure.
From what I can tell, much closer to a "hope"...
> >> Does anyone know of any trading systems using the concepts
> >> of chaos theory?
> >
> > My system draws in part from chaos theory. It most im****tantly
> > draws from the chaos theory concept of "multiplication of errors",
> > in which very small initial data errors are magnified and prediction
> > becomes well-nigh impossible...hence the name "chaos" theory...
> >
> >> I've looked and haven't found anything
> >> online yet even close.
> >
> > Anything that really "works" isn't going to be widely-disseminated...
>
> Well it should be, in (chaos) theory the more that know, the better
> it will work for everyone.
Maybe you should study just a little bit of physics, look up
the name "Heisenberg", or any type of game theory dealing
with pari-mutuel payoffs, or poker (your chaotic boundary is
the result of what in poker is called players "going on tilt").
If all traders have access to the same information and use
the same strategy to trade the market, much of the potential
profit you can make would disappear. The stock market offers
excellent trading op****tunities primarly because of the mistakes
made by other traders.
> Once I'm fat and happy, I'll be more
> detailed. For now I'm sticking with discussing theory only.
> These concepts require some ability to take an idea and run with it.
Tell me about it...it's a friggin' full-time job, that mostly results
in blind alleys, so don't quit your REAL job...
> > How ya feel about genetic algorithms? They're "fun" too...
>
> Nature shows us the process for the best possible solution
> to any problem.
Nature shows us how to wreck the friggin' SuperDome, after
the weatherman "predicts" the storm will not hit New Orleans...but
Lorenz told us 50 years ago why we couldn't predict nature with
anywhere near 100% accuracy...riiiiiight?!??!!
---
William Ernest Reid
Post count: 976
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