"Bill Reid" <hormelfree@[EMAIL PROTECTED]
> wrote in message
news:KkPEj.29235$D_3.1584@[EMAIL PROTECTED]
>
> Well, you don't have to worry about me stealing your system, since
> I didn't understand it...but then I had the same problem with the "Jack
> Hershey" system...anyway...
Which is probably due to my inability to clearly explain it.
"If we have a complex system whose formula is unknown in
detail, one would think it is impossible to determine with any
certainty its ultimate behaviour. However, one of the main
themes within the field of Chaos Theory is the universal behaviour
of complex systems on the edge of chaos where the main
features of the "outward" behaviour are not dependent
on their hidden "inward" mechanism."
http://www.calresco.org/milov/ymtemcss.htm
At the edge, we should have very good intermediate term
predictability without relying on any internal variable
details. A way for an outsider to gain the advantage.
And at the edge, the stock should display many of the
other primary properties of edge states.
3.3 What is the Edge of Chaos?
"For systems on the Edge of Chaos the properties match those
seen in liquid systems, a potential for either solid or gaseous
behaviour, or both."
http://www.calresco.org/sos/sosfaq.htm#3.3
OR, where system uncertainty is at an absolute maximum.
As the edge is the region where the system displays both
opposite extremes in possible behavior at once, as in a cloud
standing poised between water and va****.
Or in the market this point could be considered where one
can no longer tell if it's better to day-trade the thing or
go long. Both camps become out of their element at
the Edge. Fluids have short term order, molecules tend
to drag others along for awhile, combined with long term
unpredictability.
It's not a coincidence life is associated with fluids.
As an edge state is where systems begin the process
of self organization. They 'take on a life of their own'.
>> The idea is to start with a system at equilibrium
>> that's been suddenly disturbed.
>
> Hmmmm, seemed somebody just brought up something similar
> in another thread, but they were going to electrical oscillation
constants
> to trade...and there are always people who just buy anything at the
> top of the daily losers list, hoping it will "oscillate" up (happens a
lot,
> also doesn't happen many times)...
Some do. The ones that display maximum uncertainty in their chart
pattern. The idea is to derive from theory what a chart would look
like if it were at the Edge, or approaching a critical point
So, if we could derive this perfect chart, the one pattern that
/all companies/ would display at maximum uncertainty, we
would have a chart that display universal edge properties..which...
1) requires little or no knowledge of internal system details
2) displays the point where volatility and predictability are at
simultaneous maximums.
3) behavior becomes universal, any stock at all could display
this universal pattern which is at the point where uncertainty
overwhelms objective methods.
This will be a chart that has a very large change in direction
coming, which it will announce in advance in a very reliable
way. The saying applies that 'one can't know what exactly
will happen at the Edge, only that something interesting
will happen'.
Which means you can trust the pattern to act in the way
it should. And act big. The transition point always seems
to announce itself somehow, you just have to wait for it
to show. And trust in the pattern to behave as anyone
would expect.
Look at the fun I had with asti today. Or fmd last week.
How easy is that bottom to see? It announced itself with
a flippin lightning bolt. How can it be any easier?
They always do that in some way, sometimes
with a drop in volume or some other obvious signal.
>
> How do you detect the "panic" in the buy or sell? Just by the
> size of the move in relation to previous trading?
The same definition as with a cloud. When all the primary
variables reside within the complex realm at the same time.
For falling stocks
Always at or near 50% off price, and following a slope of
minus one that steadily ...accelerates, and extends over
a 'complex' time frame between day traders and longs, about
ten to twenty days. And one good clue the system is
acting naturally, and not being disguised, is the false
bottom which almost always occurs half way down.
When all variables are midway between their opposite extremes
in possible behavior.
These values, and subsequent behavior, are all pyschologically
driven. The news is such that no one can really figure out what
it means, but they know it's im****tant. And voila, the charts
of asti and fmd etc is what you get. Since this is a naturally
evolved or universal pattern, you can learn to trust it to
behave as you expect it too. It shows you the bottom, just
trust it and give it a couple or three days for a fifteen day
pattern. Shorter or longer bottoms are pro****tional to the
overall pattern length it seem
>
> So, middle of the "trading range"...or not?
Yes, the middle of the practical range as observed
in operation at any given time. Think of it this way.
If the change is so small, or so large, that it gives
us a good idea of the internal situation, then it
is near one extreme or the other and is NOT complex.
And this applies even more so to the intangibles like
the news or upcoming events where no quantification
is really possible. With news events and such, average
wouldn't be just another typical news event.
It would be a HUGE event, but one that only introduces
uncertainty so that no one can really tell what the
effect will be, only that it will be large.
And the panic selling/buying begins.
I only deal with the falling patterns as they typically
act as if everything is halved. Panic buying takes the
form of doubling. It's too fast in the upward direction, by
the time you find it, you've missed it.
But the falling ones give you plenty of time to find
them about halfway down and watch them for a while
before they hit the critical 45% percent fall in price.
In theory it should be 50% plus or minus, but the one
thing the market does best is anticipate. Most
seem to stop just short of 50% fall in price.
The disguised ones often fall to 60% off.
Even then the bounce usually bails you out fine.
Number of iterations, or average lot size is im****tant.
The more the better. The falling knife patterns are
in every way a sign of a stock about to go belly up.
As the iterations are ususally just a few, giving a
HUGE hint as to who is doing the selling.
A large number of iterations means the little guys are
selling I believe. That alone is a big clue as to the future
of the company. If only the little guys are shaken out
that means the insiders have decided to stay
even after hearing the news. So the slope and number
of iterations is crucial.
>
> Would you overlay fundamental charts on technical charts?
> Or are you talking about some specific representational techniques
> from chaos theory? Are you looking at anything more than price
> and volume?
Looking at the way price and volume changes after some im****tant
event takes place. Does the effect accelerate over time, snowball, so
that the behavior must find a limit where everyone has sold that's
going to?
>
>> The three primary variables of a chart pattern are of course
>> price, volume and the transient length.
>
> OK, we're up to three inputs...I guarantee you there are more
> for stock analysis in general, but for your purposes these MIGHT
> suffice (this is now starting to look a little like what technical
> analysts call "stochastics" or "oscillators")...
>
>> Which is the length
>> the disturbance driving the system from equilibrium lasts.
>
> "Jack Hershey" used to say that you could detect LACK
> of "equilibrium" when trading volume went DOWN (buyers and
> sellers could not "agree"); this would signal a turning point in
> the trading, and you'd wait for the next move on higher
> volume to determine the direction and trade that way...
For a short period at the top or bottom I've seen that many times.
When you see volume drop off to nothing, and in the midst of
an otherwise highly volatile period, which edge states always
are, bird flocking essentially sets in.
Just like a flock gliding along, and the volume steadily declining
to almost nothing, and suddenly some 'whistle' goes off
...say a single large buy or an opening bell, and the flock
turns on a dime and the volume explodes.
But that is called chaos with order, or even a Levy Flight, wildly
bouncing/searching between a rather narrow gap for a short period.
Either way it signals to me that an edge state is AT the transition
point. If it's high then...the bubble bursts. If low, jump on, the rides
about to start.
And this effect makes it hard to stay with a stock for those
two or three days while at the bottom. You see the volume
taper off when you expect it to rebound, and its scary thinking
the bottom is going to drop out. But you have to have faith
in that its signaling what you're really looking for.
A really prime example would be smbl from a couple of weeks
ago. They pre-released some numbers early, ONLY the bad news
ahead of the quarterly ( I love that) that said revenue was way
off, like a 60% drop. Then at the quarterly said it was just a one time
charge and in fact they just had their best year ever, expect
30% growth yada yada.....cha ching.
I bought smbl at 5.1 and sold at 6 the next day, was so proud of myself.
Look at it now...I just want to scream sometimes.
>
>> Defining the complex realm is highly subjective, as is
>> complexity science in general.
>
> Oh, I don't like the sound of that, don't like it at all...
I felt the same way, I was brought up with all the same physics
and math as you. Loved it all, but Nature just doesn't let us
see her beauty in that way.
When uncertainty is at a /maximum/ is when nature shows her fundamental
properties.
.......here comes a rant <g>
Objective reductionism is all about the search for ...certainty... in
some way or another. The opposite of what is needed to see
Nature and her universal creative process.
....when any system is persistantly poised at the union or edge between
it's opposite extemes in possibility, then the sytem begins hill climbing
it begins evolving and self organizing. The impetus for spontaneous
order emerges from complete and total system-wide randomness.
Or uncertainty. However you wish to call it. The Second Law provides
the randomness or food for self organization and evolution of BOTH
the physical and living worlds.
This is true for ....
a cloud
neither static or chaotic
neither water or va**** dominates
a society
neither static or chaotic
neither rules or freedom dominates
but an unstable uquilibrium between the two
called the dynamic realm, or simply a fluid.
a market
when neither buyer or seller dominate
the system self tunes to the optimun
as if by magic. With Adam Smith-like
invisible hands which emerge from system
components that act with..'trembling hands'
or edge state uncertainty.
genius
neither static or chaotic
neither knowledge or imagination dominates
but both at simultaneous maximums.
an emotion
neither instinct or senses dominate
a universe
neither static or chaotic attractors dominate
neither gravity or cosmic acceleration.
evolution
neither static/little changing behavior or chaotic/random behavior
dominates
neither genetics or natural selection dominates
but both in balance.
wisdom
neither system specific opposite dominates
neither science or religion
but when one can't tell...when both and neither
....then wisdom emerges.
creation
neither male or female
but at the union of opposite extremes.
when two people become one.
And a hundred others....all disciplines in fact.
You see don't you?
All these paradigms describing the ultimate source of our
reality and creation have another more common name.
Love!
The dynamic state called edge of chaos, is responsible for the spontaneous
emergence of all order in the physical, biological and even
intellectual/spiritual realms.
The math is clear on this, Love is the answer, the point at which
opposite
extremes
overlap...the complex realm...where uncertainty is at a maximum
defines the solution to any and all real world problems.
Find that transition point, the point of maximum system uncertainty
for any given system, and you've found the ideal system structure
or solution for that system.
Thanks for reading, hope you make money. I'm posting all this
for no other reason that I need some good Karma.
jonathan
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