jonathan <maatschj@[EMAIL PROTECTED]
> wrote in message
news:C_iGj.10758$9O.8250@[EMAIL PROTECTED]
> "Bill Reid" <hormelfree@[EMAIL PROTECTED]
> wrote in message
> news:KkPEj.29235$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.
Not necessarily...sometimes people's pre-conceived notions
prevent grasping new ideas. I mean, I've spent decades building
a model of the market with the intent of profiting from it, I'm
pretty locked into my thinking on the subject, as are most
people in the "market"...my only saving grace is that I build
from proven correlations only, most people are actually
terrified of rigorous market research because they're afraid
of what it will reveal about their "systems"...
> "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
Yeah, as I've said, I've already incor****ated this particular
facet of chaos theory into some of my trading "strategies"...
> 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.
Yeah, well, that's the dream, the very typical dream, of
almost all market participants. At the risk of polluting YOUR
thinking with one of the most im****tant variables in the
market, most market participants throw out almost all
the data available about the market and the economy by
arbitrarily declaring it "worthless", and then proceed to
trade based on a very limited set of data using completely
untested "systems", or just plain "guess" like hell...
> 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
I sometimes like a hydraulics analogy, and much of the
market "lingo" seems to sup****t this comparison, such as
"liquidity", "money flows", etc. But as always, there's only
so far you can take an analogy; everything is actually most
like what it really is, and less like something else (analogies
are most useful for adopting some specific analysis
techniques derived from other fields).
> 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.
A lot of my "system" depends on varying levels of "disappointment"
versus "success", which is somewhat orthogonal to, but much more
quantitative, than certain "chart/TA" techniques such as "moving
averages", "sup****t and resistance", etc.
> 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'.
See the ball, be the ball?
> >> 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...
This is not exactly a patented or secret technique, but part of
how I "read" charts algorithmically is to perform a correlation
coefficient of the target time series to a "perfect" reference
chart pattern, after "trapping" a potential target with a "skeleton"
applied as a moving window of varying sizes, and then
transforming the target data to the reference chart size...the
closer to 1.0, the better, but I'm sure a die-hard chartist would
claim I'm not reading them the way a "human" would if they
wanted to apologize for poor results for their "strategy"...
> 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.
Uncertainty is almost ALWAYS overwhelming "objective"
methods in the stock market, or so it seems! But actually
there is a predictable range of "volatility" based on the initial
conditions that could be used to predict an investment's
future price; different markets typically have different levels
of "unpredictability", the stock market is just worse than
some...
> 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 is exactly how I make 400%-800% a year trading
options...
> 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.
Anyone?
> Look at the fun I had with asti today. Or fmd last week.
> How easy is that bottom to see?
Just about all the charts you've mentioned do indeed have
"self-similarity", or really, just the all look pretty much the
same...
> It announced itself with
> a flippin lightning bolt. How can it be any easier?
By not failing anywhere near as often as it succeeds?
> They always do that in some way, sometimes
> with a drop in volume or some other obvious signal.
Ref: "Jack Hershey" "dry-up volume"...
> > 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.
OK, now THAT was a little vague...
> 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,
Disguised by what? The "Plunge Protection Team"?
> is the false
> bottom which almost always occurs half way down.
Hmmm, OK, should we count the "false bottom" as a "bonus"
or a "necessity"?
> When all variables are midway between their opposite extremes
> in possible behavior.
>
> These values, and subsequent behavior, are all pyschologically
> driven.
For somebody who is trying to avoid understanding of the
internal variables of a system, you keep imputing mental
conditions on market participants...I do too, but then I try
mightily to understand ALL the variables of the system...
> 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
My motto is "trust but verify"...
> > 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.
OK, that's pretty simple and clear...
> 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.
I wonder if "JBoatFake" could use this to trade Forex "straddles"...
> And the panic selling/buying begins.
>
> I only deal with the falling patterns as they typically
> act as if everything is halved.
Since your trading career and any and all sup****ting
data consists of the last three months, I might rudely
suggest you deal only with falling patterns because of
the fairly high degree of individual stock correlation with
the broader market averages, and we all know what the
market has been doing...
> 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.
Once again, for ME to be convinced, I'd have to see how
this works for about 100 years of data for the tens of thousands
of stocks that have come and gone over the decades...
> 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.
So you're "playing" both the fall AND the bounce?
> Number of iterations, or average lot size is im****tant.
Whoops, you've just introduced another variable...looks
like you're re-inventing "odd-lot" analysis...
> 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.
Yeah, you're really imputing a whole bunch of motivation
onto these numbers...just like every other market analyst
in history. I myself am not that moved by lot-sizes, but
there are some relation****ps between volume, tradeable
"float", market cap, etc., that I have found to be very
telling, and not for any particular reason of human behavior,
but like so much of what I look at, simple friggin' math...
> A large number of iterations means the little guys are
> selling I believe.
You and everybody else...
> 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.
OK, "iterations" are im****tant too, gotcha, didn't get
that the first time...you're aware I've already begun playing
around with these ideas in my trading software simulator/historical
data analysis modules, right?
> > 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?
Hmmmm, my almost-unshakeable belief is that ALL markets
work at the "margin", a relatively few number of traders at any
given time set the price...
> >> 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.
I'm sure "Jack" is feeling quite vindicated right now (and of course,
I've seen the same thing, and I don't mean that in the TOTALLY
sarcastic sense).
> 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.
Uh-oh, now we're talking about birds, what happened to water?
Maybe the birds are flocking to the water? I quite often see geese
migrating in a "V" formation roughly following the creek when I'm at
the park...
> 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.
No, they just kind of fly and honk, but sometimes they nest
where I'm running and/or they have bird flu and they are walking
on the trial and chase after me and try to bite me...
> 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.
Helter-Ske(a)lter, it's coming down fast!!!
> 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.
I like the use of the word "faith" here...you are much more
of a typical trader than you could possibly imagine...
> 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.
Sounds like a conspiracy to me...welcome to misc.invest.stocks!!!
> 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.
YUP, YOU'RE MIS MATERIAL ALLRIGHT, LET THE CRAZY OUT,
DON'T BE SHY!!!
> >> 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.
Hmmmm, some of nature can be seen that way, and just
about all of nature can be seen that way when you look at it
in a particular way...but of course that way doesn't allow
prediction of chaotic systems...
> When uncertainty is at a /maximum/ is when nature shows her fundamental
> properties.
>
> ......here comes a rant <g>
Don't be afraid, you can't possibly frighten the inmates here,
they're "hard-core"...
> 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,
Minima and maxima are always zero and infinity, respectively...right?
> then the sytem begins hill climbing
> it begins evolving and self organizing.
Again, I don't necessarily "believe" in a lot of "self-organizing
systems"...
> 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.
"Anytime something like that happens, a wizard did it." - "The Simpsons"
> 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.
Ever read "The Wanting Seed"?
> 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.
Yeah, I'm not real sure about "invisible hands" either...
> genius
> neither static or chaotic
> neither knowledge or imagination dominates
> but both at simultaneous maximums.
>
> an emotion
> neither instinct or senses dominate
Ooooh, I've done a lot of study of psychology, you're playing
with fire bringing up that subject with me...
> 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.
I actually am more in the "intelligent design" camp myself...we're
at odds, neither agreeing or reaching consensus...
> wisdom
> neither system specific opposite dominates
> neither science or religion
Oh man...I'm actually at the point that I feel sorry for people
who think "science" and "religion" are "opposites"...they both
aspects of very similar "human nature"...
> but when one can't tell...when both and neither
> ...then wisdom emerges.
Maybe if you do enough "shrooms"...
> creation
> neither male or female
> but at the union of opposite extremes.
> when two people become one.
Fungi...seven or more freakin' ***es man, what a party...
> And a hundred others....all disciplines in fact.
Yin and Yang...I used to work with these two guys named
Yin and Yang, they fought all the time, the boss had to fire them
both...
> You see don't you?
Pass the "shrooms" and I'll get back to you...
> All these paradigms describing the ultimate source of our
> reality and creation have another more common name.
>
> Love!
OK, maybe I was wrong about you being in the right group...
> 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.
Forget the shrooms, pass the Kool-Aid(TM)...
> The math is clear on this, Love is the answer,
"Love is all you need" - Eliot Spitzer
> 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.
Or you just pass out at the rave and people step on you...
> Thanks for reading, hope you make money.
Well, I try...as I've said, I've been using some of this stuff
for decades, other stuff I'm actively researching as I am always
doing...
> I'm posting all this
> for no other reason that I need some good Karma.
Hey, here's an idea, find out what "karma" REALLY means,
because if you knew that you'd know you don't want either "good"
or "bad" karma...the middle way, man, the middle way...
---
William Ernest Reid
Post count: (uh-oh, "Lowbrow" was right, I lost count!)
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