|
Post by Norbert on Nov 30, 2022 12:17:00 GMT
Thanks, FD. I understand your viewpoint, but this one is on me. I announced the book and for all intents and purposes invited a trial by fire. Freedom to examine and post sharply is important and questioning claims iis, after all, what we do here. We're just starting the joust, and so far posts haven't gotten personal in this thread and it's in everyone's interest not to decline that way. (If it does, I promise it won't be started by me.) N has promised to write either a good review or nothing at all, which strikes me as quite gentlemanly. My interest is to be sure (as far as I can) that people who criticize the book (A) have actually read it and (B) report it factually AS IT WAS WRITTEN -- not surmising or projecting and (C) to be sure backtests are done accurately. Already we have a big issue brewing -- I can see we face a whole wall of colorful back-tested analyses which are, in critical areas, clearly VERY erroneous. I will make my case in a day or so to give people a decent chance to read at least part of the book so they can talk from a position of understanding instead of guessing. I intend to defend my baby vigorously, but if I demand everyone keep an open, inquiring mind, then I must do the same. I have great confidence in DVolT. You will remember I wrote a series of long posts about it in juvenile form on Armchair back in January and February. (It was well received back then -- including, I recall, by you.) I have been thinking about DVolT and testing it in a small way for over a year now. But in the end the book must stand on its merits, not on how I'm able to spin it. I look forward to a stimulating debate and will give careful attention to any claims that my backtests are "erroneous". Please give me some substance, Augustus!
The only thing is: I depart for Australia on December 6th. Unless you provide me your criticism well before then, I won't have a chance to modify the spreadsheet. Am not taking a PC with me on the trip. (Of course, we can do theoretical discussion, but that's not the same.)
I asked you to give me clear security selection rules so that I can more vigorously test your system and possibly write a review. Shall I give up any hope of getting those? This is the central worry I have about your strategy.
I have no memory of the AC discussion, but have been very busy and am probably just forgetting it.
Cheers, Norbert
|
|
|
Post by richardsok on Nov 30, 2022 13:32:43 GMT
Norbert --
I see. You want to look into my selection process. Very well. As I say, the book must stand on its own, so I quote ----
"Finally – Exactly What to Trade?
For DVolT searching purposes I haven't found anything to replace the grunt work of going through lists of stocks and likely ETFs and closed end funds (CEFs). I enter them on a three-month chart and simply count how many P-SAR reversals I see, disregarding any one-day back-and-forth signals. The fewer reversals the better. It's hardly a consistent method. Just because I count only five reversals for April-May-June doesn't mean there won't be eight or nine during July-August-September, but it does create a good tentative list for beginning work.
After many searches I've found there aren't very many really good DVolT candidates for us, and I'm never satisfied with the list I have.
----and ----
Desperately Seeking DVolT
Of course I'm never satisfied with my candidate list and you probably won't be either. I admit I spend too much time scanning charts like a pig for truffles, looking for other possible DVolT funds and usually conclude another fruitless search by deciding I have plenty enough assets to trade in the first place. I've tried to Google “low volatility stocks” and “low beta stocks” but the results are pretty useless. The first place you might think of are those ETFs like USMV, SPLV and FDLO. I've checked their charts many times and no dice; whatever these funds hold under the hood, the funds themselves are plenty too volatile for our purposes.
To seek new DVolT candidates with good technical charts and possible bullish prospects, I sometimes go to stockcharts.com and click on "MORE TOOLS" to find "PRE-DEFINED SCANS". Click on that and you can find "OVERSOLD WITH IMPROVING RSI". Click on THAT and you have your candidates to examine for low volatility. Other categories you can comb through on a quiet day are “NEW 52 WEEK HIGHS” “BULLISH MACDs” and even (you guessed it!) “PARABOLIC SAR BUY SIGNALS”.
When searching for opportunities, I comb through those lists and "chart scan" every NYSE item on the list one by one. I might purchase a fund only if it appears DVolT and has recent upward MA lines, with the “fast” line above the “slow” line. (again, the 3 MA line is above the 15 MA line.). About 99% of the possibilities I scan never make the cut....."
=============
So -- I concede this is nothing at all like a laboratory re-produceable system of selection. My selection process of hit-or-miss counting P-SARs is academic only in the crudest sense. I described the process as simple "grunt work" which it is. Academically speaking, we can score one point for the prosecution. I am not presenting this book as my MBA thesis -- but to show how investors of limited ability might improve their performance. Early in the book I postulate different securities appear to show different chart personalities. While it is surely true for stocks and for human beings, I know of no mathematical system for precise personality identification -- either for ETFs or for people.
Now-- regarding the back-testing issue. I am concluding my own LIMITED currently running back test which ends COB today, to avoid any taint of cherry-picking time periods. I will give you my refutation tomorrow morning. Fair enough?
|
|
|
Post by Norbert on Nov 30, 2022 13:50:15 GMT
Norbert -- I see. You want to look into my selection process. Very well. As I say, the book must stand on its own, so I quote ---- "Finally – Exactly What to Trade? For DVolT searching purposes I haven't found anything to replace the grunt work of going through lists of stocks and likely ETFs and closed end funds (CEFs). I enter them on a three-month chart and simply count how many P-SAR reversals I see, disregarding any one-day back-and-forth signals. The fewer reversals the better. It's hardly a consistent method. Just because I count only five reversals for April-May-June doesn't mean there won't be eight or nine during July-August-September, but it does create a good tentative list for beginning work. After many searches I've found there aren't very many really good DVolT candidates for us, and I'm never satisfied with the list I have.----and ---- Desperately Seeking DVolT Of course I'm never satisfied with my candidate list and you probably won't be either. I admit I spend too much time scanning charts like a pig for truffles, looking for other possible DVolT funds and usually conclude another fruitless search by deciding I have plenty enough assets to trade in the first place. I've tried to Google “low volatility stocks” and “low beta stocks” but the results are pretty useless. The first place you might think of are those ETFs like USMV, SPLV and FDLO. I've checked their charts many times and no dice; whatever these funds hold under the hood, the funds themselves are plenty too volatile for our purposes. To seek new DVolT candidates with good technical charts and possible bullish prospects, I sometimes go to stockcharts.com and click on "MORE TOOLS" to find "PRE-DEFINED SCANS". Click on that and you can find "OVERSOLD WITH IMPROVING RSI". Click on THAT and you have your candidates to examine for low volatility. Other categories you can comb through on a quiet day are “NEW 52 WEEK HIGHS” “BULLISH MACDs” and even (you guessed it!) “PARABOLIC SAR BUY SIGNALS”. When searching for opportunities, I comb through those lists and "chart scan" every NYSE item on the list one by one. I might purchase a fund only if it appears DVolT and has recent upward MA lines, with the “fast” line above the “slow” line. (again, the 3 MA line is above the 15 MA line.). About 99% of the possibilities I scan never make the cut....."============= So -- I concede this is nothing at all like a laboratory re-produceable system of selection. My selection process of hit-or-miss counting P-SARs is academic only in the crudest sense. I described the process as simple "grunt work" which it is. Academically speaking, we can score one point for the prosecution. I am not presenting this book as my MBA thesis -- but to show how investors of limited ability might improve their performance. Early in the book I postulate different securities appear to show different chart personalities. While it is surely true for stocks and for human beings, I know of no mathematical system for precise personality identification -- either for ETFs or for people. Now-- regarding the back-testing issue. I am concluding my own currently running back test which ends COB today, to avoid any taint of cherry-picking time periods. I will give you my refutation tomorrow morning. Fair enough?
Of course, do your own back tests. However, I'd like to know what my errors are in programming the ideas from your book, ideally right now. Am running out of time to make changes to the spreadsheet.
I would much rather confirm the reliability of your strategy than end up concluding the opposite!
|
|
|
Post by richardsok on Nov 30, 2022 13:55:11 GMT
OK, will try to put something together later today.
|
|
|
Post by liftlock on Nov 30, 2022 15:20:22 GMT
RichardSok, Congratulations on the publication of your new book. Last night I bought it and read the first 81 pages. I found it an enjoyable and easy to understand read. It looks like I have another 70 pages or so to go. I reached the point where you suggest the reader should stop reading and go to Yahoo.com to look at your trading system on some the charts which I will do next. Your book was my first Kindle purchase of any kind and I was pleasantly surprised how easy it was to read it on my Windows 10 pc using the Amazon Kindle book cloud reader. I want to share a few initial impressions before I forget them. I hope you might find them useful in improving future versions of your work. Your book would benefit it included some front matter including a table of contents. Perhaps it's there and it simply did not appear on the Amazon Kindle cloud reader that I used. While reading the first few pages, I thought I was reading a forward to your book. As I read on it became clear that there was no forward, and no table of contents. So far, there are no chapters to your book. I mention this because I like to look at the organization of a book before I start reading it. It allows me to identify potential stopping points, set reading goals, and identify reference points for returning to sections for subsequent re-reading. The first 90 pages of your book appears to me as a long 90 page article. I think it would be improved if your sub-divided your content into readily identifiable sections or chapters that could be listed in a table of contents at the beginning of your book. I like the simplicity of your hand drawn charts. I like the presentation of your trading rules which are simple, clear, and easy for me to understand. I have read other charting books and it is more difficult for me to judge how beginners in charting might fare in understanding what you are trying to convey. One of the best books I have read on understanding the fundamentals of reading stock charts is Stan Weinstein's - Secrets for Profiting in Bull and Bear Markets. It very good in explaining how to identify the stock price trend. Readers new to charting might benefit from a book like Weinstein's in addition to yours. www.amazon.com/Stan-Weinsteins-Secrets-Profiting-Markets-ebook/dp/B0BG9V3D27The use of the term "Deep Volatility" to describe "Low Volatility" strikes me as a bit confusing. The word "Deep" makes me think of the Grand Canyon with it's deep canyons and high walls. "Deep" suggests High rather than the Low Volatility you are trying to convey. I think "DVolT' might be more clearly expressed as "LVolT". I like your analogy of the ship turning slowly as way to convey Low Volatility. I am looking forward to further examining your trading system on charts for some of the Low Volatility ticker symbols you suggest. Based on what I read so far I have no idea how often your system might trade and what it's success or failure rate might be. That is one of the things I will be looking to better understand. I want to manage expectations and get comfortable with what to expect before entering any trade. A trading system that a trader can't stick with isn't going to work for a trader. Thank your for sharing your book and making it available to us here. I look forward to reading more of it and wish you success with it.
|
|
|
Post by richardsok on Nov 30, 2022 17:18:46 GMT
Liftlock -- Thank you for the comments. Right now I'm dealing with Norbert's challenges. He's asked for my response ASAP. Let me finish there and I'll get back to you in detail.
|
|
|
Post by richardsok on Nov 30, 2022 17:46:08 GMT
Norbert -- I'm going to divide my response up into 2 or 3 posts since they are quite long.
My beef with your back tests is that you are not testing the results as the plan was written.
As we are dealing with ultra-low volatility securities, suddenly trading BOTH long and short AOM positions becomes truly viable. Ditto the same with TLT and TBF. Your back-test only reflects the BULLISH gains -- you ignore the opportunities that now arise trading on "the dark side" ! ! !
Sure, a lot of people will wail, "Trading short is difficult! It doesn't work!" I reply, well, put the short D-VolT ponies up on your test pattern and we'll SEE if it doesn't work. Until I find better, AOM (or AOK) and TLT/TBF are the crown jewels of DVolT.
I devote an entire section of the book to "Dancing on the Dark Side" and your tests simple ignore it.
You're not going to show the bearish gains on your tests because I demand it. You're going to show them because you are OBLIGATED to. And when you do, DVolT simply blows away competing tactics!
You opine I need more thinking about the theory. I disagree. I reply that what the author needs is more guts and confidence. It is only in the last couple of weeks that I have deployed DVolT tactics in a meaningful way; enough to post them on BSW. I now hold 10% of PV in AOM and another 10% in TLT. Had I believed in myself (I never do!) I'd be neck-and-neck with harley right now.
Once again, in the "stand on its own merits" spirit, I quote directly from the book:
"......if AOM behaves with relatively low volatility on the way up, might it also often show low volatility on the way down? If so, to hedge against the start of a bear market, I could sell short one of the calmest individual funds I know! – and that is what I started to do for portfolio protection when I needed it. I follow AOM all the time now, in bull and bear trends, using the same signals as before, letting short positions help buffer losses when my moving averages are slipping and I reverse back into bullish when trends begin to climb. It's like going from DRIVE to REVERSE and back. In the past the charts and moving averages when bearish, have been encouraging; still tending to move in the kind of slow-rolling waves I hope to see. AOM won't exactly trade perfectly inverse to SPY, but close enough and calm enough that I usually make gains and protect my principal when Mr. Market starts another s-storm.
------------------
So why AOM? Simply because with it, you not only have an excellent chance to side-step any longer term bearish trends, but you can even profit from one by shorting AOM when signals indicate. Suddenly, participating in a Heads-I-Win/Tails-I-Win situation becomes a realistic possibility. With AOM in your lineup you can look to gain in any market trend, so long as it isn't a head-fake, something next to impossible with a more volatile stock or ETF. Remember, AOM is your “ocean liner” ETF – easy for the alert D-VolT investor to enter when moving averages signal a new trend upward, and equally possible to exit and even to sell short when bear signals flash “sell”. Such goals are next to impossible using SPY or almost any other all-equity fund.
Regardless of stock market directions, you can also simultaneously trade another win/win situation with the ying/yang TLT and TBF funds, which are moved by changes in long term interest rates and not by stock prices. The volatilities are manageable and I have had good success trading them back-and forth on slow-signal charts.
(2nd post to follow.)
|
|
|
Post by Norbert on Nov 30, 2022 18:10:00 GMT
richardsokGood stuff. I'll look at the short side tomorrow; am out for the evening.
|
|
|
Post by richardsok on Nov 30, 2022 18:13:39 GMT
PART TWO
Let us do our own real time test going long and short using long term bond ETFs, namely TLT and inverse TBF. No cherry-picking! We use the most recent three month period charts, (Aug 30 to today, NOV 30) smoothed with a two-day aggregation. For our technicals I will use the Persons PPS indicator (which gives off discrete signals, unlike moving averages which are more or less interpretive) just as I have set it up on thinkorswim.com in my book. (If you can't get PPS, follow along with me on yahoo with 2 x 15-day MA overlays. You'll see much the same thing.)
We will do what many here believe can't be done.
When the test begins, I start with a TBF BUY on Aug 30 for 20.47 and sell when PPS finally reverses on 10/31 for 23.55 for a 3.08 gain.
I pick up another TBF BUY signal on 11/4 at the 24.40 mark but the bullish trend crumbles and I SELL on 11/10 for 23.18 for a loss of (1.22) giving me a net TBF gain of 1.86 or approx 8% in three months. Thereafter TBF signals remain bearish to the end of our period, so I do not own it.
HOWEVER during the same period I am SIMULTANEOUSLY working the other side of the same bond coin with the Long 20-year bond ETF fund TLT. In this case we begin our three-month test period in bear mode, so I own nothing (All my money is over in TBF for the moment!). When we began our test on Aug 30 TLT was at 111.50, but the "avoid" PPS signal prevented any buys as it kept falling and falling until we finally picked up our bull signal 11/10 at 98.00. Our test period closed out 11/30 with TLT at 102 for a 4% gain.
So -- working both sides of the same underlying bonds, we gained 8% plus 4% in three months..... and I could be doing the exact same process with long/short AOM at the same time!
Notice also -- just as I hammer over and again in the book, how DVolT effectively protected us from entering into any large losses. The signals prevented us from buying high at 111.50, blocking us from serious blunder -- but signalled us to participate when the downward trends changed to bullish.
Using this DVolT system deploying back-and-forth TLT and TBF simultaneously, I have shown you gained approx 12% in three months at very controlled risk. My system demands clarity and probability before entering into any trade.
I have never had a serious loss with carefully monitored DVolT tactics!
Look -- for the next couple of weeks, at the preposterous cost of 2.99, I am giving you BigBang bozos (some of you with limited skills) what you've always dreamed of --- the chance for stellar performance -- TRUE SUSTAINED ALPHA -- at very controlled risk, so don't give me any of your "yeah, buts...." Now will you please go read the damned book?
And tell your friends.
|
|
|
Post by Mustang on Nov 30, 2022 18:45:23 GMT
Since no one has challenged Norbert's calculations I'm assuming they are correct. It is clear that AOM and TLT are funds more favorable to your technique. AOM was basically a draw between P-SAR and B&H. TLT's performance over the last 8 years favors B&H. Looking at Norbert's charts for them Hybrid Cons seems to show the best performance for 2022.
I find this discussion interesting and look forward to seeing more actual results.
|
|
|
Post by richardsok on Nov 30, 2022 18:56:39 GMT
Since no one has challenged Norbert's calculations I'm assuming they are correct. It is clear that AOM and TLT are funds more favorable to your technique. AOM was basically a draw between P-SAR and B&H. TLT's performance over the last 8 years favors B&H. Looking at Norbert's charts for them Hybrid Cons seems to show the best performance for 2022.
I find this discussion interesting and look forward to seeing more actual results.
Well, I am challenging Norbert's calculations ! See my two previous posts.
|
|
|
Post by acksurf on Nov 30, 2022 19:49:01 GMT
Congrats on the book Richard! I'll take a look when I have a chance. Maybe over Christmas!
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Dec 1, 2022 1:18:34 GMT
richardsok, I will always applaud an investor penning their strategy. I will buy the book this weekend. I doubt I will understand much, but it might give me better insights into your investing decisions. I doubt I will be qualified to provide an educated review, but will if I think I can! I have always admired your postings, humor and humility. I also appreciate Norbert taking the time to test some of the data. I think that this type of collaboration is great. Thank you!
|
|
|
Post by Norbert on Dec 1, 2022 8:02:55 GMT
Since no one has challenged Norbert's calculations I'm assuming they are correct. It is clear that AOM and TLT are funds more favorable to your technique. AOM was basically a draw between P-SAR and B&H. TLT's performance over the last 8 years favors B&H. Looking at Norbert's charts for them Hybrid Cons seems to show the best performance for 2022.
I find this discussion interesting and look forward to seeing more actual results.
Well, I am challenging Norbert's calculations ! See my two previous posts. Good morning, Unless I'm missing something, you didn't challenge my calculations; you suggested expanding my tests to include short positions. That's what I'll do after a cup of coffee. I'll also hunt for some new, ocean liner ETFs. (We really need to automate that, by the way.) I'm doing you a huge service, Curtis. You should be flying over and buying me that cup of coffee. By the way, liftlock made a good point about a "Table of Contents". Clear organization of topics into chapters would make the book more friendly to use. "Know it all" Norbert
|
|
|
Post by Norbert on Dec 1, 2022 10:36:45 GMT
PART TWO Let us do our own real time test going long and short using long term bond ETFs, namely TLT and inverse TBF. No cherry-picking! We use the most recent three month period charts, (Aug 30 to today, NOV 30) smoothed with a two-day aggregation. For our technicals I will use the Persons PPS indicator (which gives off discrete signals, unlike moving averages which are more or less interpretive) just as I have set it up on thinkorswim.com in my book. (If you can't get PPS, follow along with me on yahoo with 2 x 15-day MA overlays. You'll see much the same thing.) We will do what many here believe can't be done. When the test begins, I start with a TBF BUY on Aug 30 for 20.47 and sell when PPS finally reverses on 10/31 for 23.55 for a 3.08 gain. I pick up another TBF BUY signal on 11/4 at the 24.40 mark but the bullish trend crumbles and I SELL on 11/10 for 23.18 for a loss of (1.22) giving me a net TBF gain of 1.86 or approx 8% in three months. Thereafter TBF signals remain bearish to the end of our period, so I do not own it. HOWEVER during the same period I am SIMULTANEOUSLY working the other side of the same bond coin with the Long 20-year bond ETF fund TLT. In this case we begin our three-month test period in bear mode, so I own nothing (All my money is over in TBF for the moment!). When we began our test on Aug 30 TLT was at 111.50, but the "avoid" PPS signal prevented any buys as it kept falling and falling until we finally picked up our bull signal 11/10 at 98.00. Our test period closed out 11/30 with TLT at 102 for a 4% gain. So -- working both sides of the same underlying bonds, we gained 8% plus 4% in three months..... and I could be doing the exact same process with long/short AOM at the same time! ...
Hi Richard,
I've added a shorting feature to my spreadsheet. Using your recommended PSAR and MA-Crossover indicators, the model can go both long and short during the backtest period for any ETF or stock we want to test.
I see that my spreadsheet data matches your numbers. Here's my data for TBF, which confirm a trade you describe. Note that the TBF PSAR signal reverses on October 26, not October 31. (You could have sold earlier, though the MA-Crossover indicator doesn't send a sell signal until November 2.)
I also see the TLT side of the trade. Our data match. Those are definitely examples of good trades!
The question is: does your model work in general for TLT and TBF? How do things look over a multi-year period, not just during the past few months?
Let's see ...
|
|
|
Post by Norbert on Dec 1, 2022 10:55:06 GMT
TLT and TBF Backtest
Here are the strategy trading results I'm seeing for TLT starting at the end of 2014:
Ditto for TBF:
And here is a long-short run for TLT (the model goes long or short depending on the indicator signals):
As we might expect TBF does well in 2018 (taper tantrum?) and during 2022.
Unfortunately, the strategies I programmed using your recommendations are not very successful overall. TLT and TBF get a slight improvement over B&H, but with massive draw downs for all strategies. Although you had a successful trade during the past few months, I can not confirm the viability of the strategies over the longer term.
I'm sorry and know that this is not what you want to be reading. If I'm making a testing error or if I can do something to improve the models, please advise!
Next I'll look at AOM ...
|
|
|
Post by Norbert on Dec 1, 2022 11:18:42 GMT
AOM - iShares Core Moderate Allocation ETF
Richard describes AOM as an "ocean liner" ETF. It tends to reverse slowly and smoothly when compared to the S&P 500. This chart confirms AOM's relatively contained behavior:
Here are the results of my AOM long-only test:
The trading strategies get approximately the same total returns as B&H, but with a somewhat lower maximum draw down.
Here is a long-short AOM test; the model can now go both long and short depending on what the indicators tell it. The "Hybrid Conservative" strategy requires agreement of the PSAR and MA Crossover reading ("Buy" or "Short"); otherwise it goes to Cash.
Unfortunately, enabling the long-short feature worsens the overall performance in terms of both Total Returns and Maximum Draw Down.
N.
|
|
|
Post by richardsok on Dec 1, 2022 13:02:19 GMT
Well. There went the sterling review.....
Seriously, much appreciated, Norbert. I obviously lack the charting/spreadsheet acumen to refute your results, so I won't. Nor will I stomp my foot and give you a tantrum screech of "It ain't so! It ain't ! !" We all know the white labcoat boys would shake their heads and sigh, "Wel-l-l-l, the data's the data, y'know....."
Except, as we all know, sometimes it isn't.
I will point out that we're using a simplified assumption for your test. Your tests attempt to track results for "all in" on the bull signal and "all-out" on the sell signal, where in reality the book suggests a "half-in" buy on the first signal and "all-in" buy on the confirming bull signal, doing the same, but a little more aggressively on the sell signals. But, please, no more spreadsheets. I get it. I get it.
I will also point out your results fly in the face of deep volatility logic, not to mention my real-life results. I only recently started BSW reports when I began big trades, but they're right there on the thread. I KNOW I made good gains on TBF. I KNOW I sold and reported BSW, switching to TLT when signals changed. And I KNOW I'm nicely up on TLT this morning.
As you know, I also just did a detailed breakdown of last month's activity. Not to mention I have been doing tiny test trades for my book on both AOM and TLT/TBF for months, in quantities so small I wouldn't dream of reporting them on BSW. And yes, they do contradict your numbers .... so here we are.
I see your numbers and I accept them. (With my zero-level spreadsheet skills, I have no choice.) Nevertheless I'm going to stake my infinitesmal reputation on ploughing ahead with my theory. I have no "robust" numbers. My book is a PERSONAL journey for the small investor, not a mathematical dissertation -- one that many intelligent people can choose not to take.
Have a great trip -- and thanks for your interest. Much appreciated.
|
|
|
Post by richardsok on Dec 1, 2022 13:31:53 GMT
richardsok , I will always applaud an investor penning their strategy. I will buy the book this weekend. I doubt I will understand much, but it might give me better insights into your investing decisions. I doubt I will be qualified to provide an educated review, but will if I think I can! I have always admired your postings, humor and humility. I also appreciate Norbert taking the time to test some of the data. I think that this type of collaboration is great. Thank you! Delighted to see your post -- and you're being WAY too modest! I had been wondering, "What will Sara think of all this?" "Inquiring minds want to know....."
|
|
|
Post by Norbert on Dec 1, 2022 13:54:01 GMT
Well. There went the sterling review..... Seriously, much appreciated, Norbert. I obviously lack the charting/spreadsheet acumen to refute your results, so I won't. Nor will I stomp my foot and give you a tantrum screech of "It ain't so! It ain't ! !" We all know the white labcoat boys would shake their heads and sigh, "Wel-l-l-l, the data's the data, y'know....." Except, as we all know, sometimes it isn't. I will point out that we're using a simplified assumption for your test. Your tests attempt to track results for "all in" on the bull signal and "all-out" on the sell signal, where in reality the book suggests a "half-in" buy on the first signal and "all-in" buy on the confirming bull signal, doing the same, but a little more aggressively on the sell signals. But, please, no more spreadsheets. I get it. I get it. I will also point out your results fly in the face of my real-life results. I only recently started BSW reports when I began big trades, but they're right there on the thread. I KNOW I made good gains on TBF. I KNOW I sold and reported BSW, switching to TLT when signals changed. And I KNOW I'm nicely up on TLT this morning. As you know, I also just did a detailed breakdown of last month's activity. Not to mention I have been doing tiny test trades for my book on both AOM and TLT/TBF for months, in quantities so small I wouldn't dream of reporting them on BSW. And yes, they do contradict your numbers .... so here we are. I see your numbers and I accept them. Nevertheless I'm going to stake my infinitesmal reputation on ploughing ahead with my theory. I have no "robust" numbers. My book is a PERSONAL journey for the small investor, not a mathematical dissertation -- one that many intelligent people can choose not to take. Have a great trip -- and thanks for your interest. Much appreciated.
" I will also point out your results fly in the face of my real-life results. I only recently started BSW reports when I began big trades, but they're right there on the thread. I KNOW I made good gains on TBF. I KNOW I sold and reported BSW, switching to TLT when signals changed. And I KNOW I'm nicely up on TLT this morning."
I believe you 100%! I can see your trade data on my spreadsheet. I trust what you say implicitly!
The problem is that you're citing anecdotal evidence, while the spreadsheet follows your rules for many years and applies them consistently; with hundreds of trades and dozens of securities (starting with your own list!).
As posted earlier, I'm guessing that you have been applying your rules, but skillfully adding in your experience and judgement to pick certain securities over others to trade at selected moments. Sorry, but that's highly subjective stuff. You can't communicate that in a book (at least not very easily). In no way am I saying that YOU don't trade profitably and successfully.
I can add logic to the spreadsheet to play with position sizing, but frankly doubt that it will make much of a difference.
You're making a mistake by not doing serious back-testing of your trading theories in order to see if the RULES cited actually work over time; or just work for a handful of securities during certain periods. Anecdotal trades won't cut it. To be clear, your system does provide comparable or better returns than Buy & Hold for selected "ocean liner" securities, with lower draw downs, looking backwards. That's something. But, it's not robust enough for the big time.
Conclusion: don't publish the book! It's not ethical. You're overselling it. Investors who try to use your system, having read the promises that it really, truly works, will discover that it actually doesn't work very well at all (unless, of course, they have your experience and judgement to help out). Withdraw the book from Amazon and invest more time on the methodology. Ask jackasses like me to review your theories before rolling it out.
Sorry, but that's what I really think you should do and I'm saying it as a (cyber) friend.
N.
|
|
|
Post by richardsok on Dec 1, 2022 14:14:42 GMT
Liftlock
Great comments! Thank you.
Your observation about the kindle layout is spot-on. The first five or six pages are messy -- the white spaces are sized wrong and MUST be revised. There's a little story behind that.
Once the manuscript was done I had to search for a formatter to massage the narrative and place the illustrations to make it kindle-ready. I was referred to a website called FIVERR. There I found dozens of formatters anxious to do the work -- for very cheap. Suspicious! I looked closer to discover many from places like Pakistan, Bangladesh and even ... Nigeria -- which we all know is ground zero for "Scammers 'R Us, Inc." So I specified I wanted a formatter from the USA and got Ms. X. I sent her my manuscript and cover photos and waited - but she just DISAPPEARED.
Investigating further, I had reason to believe she(?) is actually in eastern Europe (different time zones!) -- somewhere US copyright laws have little/no effect -- and I panicked. "OMG, I thought, maybe they're just out to steal my manuscript and publish it as their own!" So it suddenly became urgent I get it up on Kindle immediately.. There were the usual miscommunications with the new formatter, the foot-dragging, the little errors, refusals to follow direction, etc. And, with the time urgency, what you see is the result. The early pages narrative DOES NOT flow like it should! I will do revisions ASAP to make it much better. Guaranteed.
I had thought of a table of contents but with such a small book I concluded it would be silly and pretentious. Your opinions and Norbert's confirmation make me re-consider.
I thought long and hard about a name for the method. I clearly had to distinguish it from "low volatility".... which everyone knows about. "Super-Low Volatility" seemed like high school level thinking. I settled on "Deep Volatility". It's concerning someone now says the meaning isn;t instantly clear. I'd have thought that "deep" could be understood different than "low". If it's a flaw, it might be one I can't change.
Well, that's my response. Thanks a million for your kind words and suggestions. They will be reflected in the revision soon.
|
|
|
Post by Karen on Dec 1, 2022 15:35:30 GMT
PART TWO ... Look -- for the next couple of weeks, at the preposterous cost of 2.99, I am giving you BigBang bozos (some of you with limited skills) what you've always dreamed of --- the chance for stellar performance -- TRUE SUSTAINED ALPHA -- at very controlled risk, so don't give me any of your "yeah, buts...." Now will you please go read the damned book? And tell your friends. Disclaimer: Neither my husband or I have read your book based on the conversation here about it, but more so, based on my husband's longtime experience with similar initiatives. So, that said, a couple of comments and questions: (1) Belittling/insulting your most likely prospective buyers is probably not the best marketing strategy. "BigBang bozos," seriously? (2) As some may recall, my husband worked in the bizness for several decades. He lost count of how many times very experienced and credentialed friends/associates in the bizness approached him and colleagues with the same idea for a handy dandy trading strategy book, and the exact same number of times the person asking thought better of it after hearing the responses and analyzing their backtesting. (3) Have you read all of these (for example) Top 5 Trading and Trading Strategies books (#6-#10 on the list)? tradersunion.com/what-is-forex/what-is-trading-and-how-to-get-started/top-25-trading-books/If so, how/why is your book in the same league/better than them? If not, you probably should have read them before publishing yours. (4) Norbert's work appears to be invaluable here, and appears that it would have been even more valuable to you before publishing. Did YOU perform ANY hypothetical backtesting before publishing? If so, what were YOUR results? If not, why not? (5) I trust you looked long and hard at the liability associated with this type of book, and more importantly, had your attorney do the same. Do you understand what affect, if any, everything you've posted on this board has on your liability? Signed, A BigBang Bozo (I guess)
|
|
|
Post by richardsok on Dec 1, 2022 18:02:58 GMT
INSULTS ! ! ?Oh, for heaven's sake, Karen -- I'm joking with people who are OLD & TRUSTED FRIENDS on these boards! These are light-hearted yuks from time to time. Oh never mind -- you're not going to get it. --- so you're another one who writes, "I haven't read your book, but....." what do the kids write? ROTFLMAO? Something like that. FYI -- I state OVER AND AGAIN DVolT tactics work on perceived probabilities -- not on certainties.
I address risk! I state there is ALWAYS risk. RISK CONSCIOUSNESS is the heart and soul of what I do.
I DEMAND that readers test and test to decide for themselves if DVolT is something they'd like to try!
I wrote.... "...there yet remains a strong case when dollar cost averaging is entirely appropriate. We're talking about young people starting out in their careers with nothing in the bank, those with new families who have little interest in the stock market. In such cases, and there are many, an automatic monthly deduction into a dividend- paying equity fund makes good sense. To begin such a program at age 23 and continuing until early retirement at 53 gives you 360 investment deposits you might make with nary a thought to the ups and downs of stock markets. Such habits of thrift have long been a royal road to comfort and security later in life. Consistent DCA over decades of time has been an unbeatable plan for people with interests elsewhere." -------------- I close my book with the following passage ----- ( emphases added) " Rationally, you believe the fund you are about to trade will trend as you expect next week because you know how it has consistently behaved in the past. Your safest option, of course, is always to do nothing – but you're a wise guy investor, a player. You haven't come all this way to sit on your hands and opt for a 2 or 3% CD in a bank account. Nevertheless you have to decide if DVolT is worth your risk when you have investing alternatives at hand.
( KAREN: Did you note I wrote "you believe" and not "you know" )
In the end, successful traders take that managed risk, that leap into uncertainty when they have good reason to be confident the odds gods are smiling and that the risks are being managed. But not everyone is made to be a stock trader. Plenty of people are satisfied to put their money into a dividend portfolio, forget all about the market and go fishing. For all its warts, a plan to buy-and-hold a diversified portfolio of dividend stocks and corporate bonds probably isn't the worst decision you can make. So if you distrust DVolT theory as it's been explained, or if you can't – or won't -- follow a disciplined protocol that specializes in a select few securities when probabilities appear to beckon, then DO NOTHING or DO SOMETHING ELSE is probably your better course. When your finger hovers over that computer mouse and the cursor rests over the BUY button on your monitor, that's a very different matter than studying last month's chart action. You've learned the principles. You have planned your trades. Now you must test and test and trade your plans – carefully disciplined – or not. All the best."-----------------------------
So go AHEAD, "KAREN". (Lord, what a PERFECT name you have!) Yes, indeed. Make GOOD your threats! CALL your damn lawyer. Do your worst.----------------------------------- That said, and no joke, folks -- I am frankly shocked and stunned by the hostility and accusations of immorality my posts are starting to generate. When even not-so-veiled threats begin to emerge, it is clearly time for me to leave this forum.
I told FD that ugly words wouldn't begin with me, and they won't.
Maybe I will change my mind when I calm down. I don't know. I'm upset. Good luck, everyone. No hard feelings. Good bye.
|
|
|
Post by Norbert on Dec 1, 2022 18:30:27 GMT
This particular Big Bang Bozo feels sympathy for you. But, friends have to be honest with friends, not cheer them on regardless. I'd love nothing more than to put the probabilities strongly in my favor with a reliable quantitative system. I'd also like to have a date with Scarlett Johansson.
I know you're disappointed with my conclusions, but that's where I come down. You absolutely have to do solid backtests over extended periods with dozens of securities; not rely on anecdotal trades. If that works, then ask friends see if they can break it. Next test it in real time for an extended period. Only then can you reasonably claim that "it works", which you do state on Page 1 of the book.
Thousands of guys thought they'd found the Holy Grail to beat the stock market, me included. Get over it!
[EDIT: just saw your post below. Sorry, didn't see it before.]
|
|
|
Post by chang on Dec 1, 2022 18:41:57 GMT
richardsok I just sent you a PM, please have a read.
|
|
|
Post by richardsok on Dec 1, 2022 18:44:18 GMT
OK, norbert. Tell you what I'm going to do. In the first revision, I'm going to add a long disclaimer in at least two places. I will state ... TWICE ... (in two different places and in two different ways) that there are serious people who have done back-testing which seems to indicate that there are other tactics superior to DVolT trading.
NOW I'm done. No hard feelings.
Good-bye.
|
|
|
Post by habsui on Dec 1, 2022 23:49:53 GMT
OK, norbert. Tell you what I'm going to do. In the first revision, I'm going to add a long disclaimer in at least two places. I will state ... TWICE ... (in two different places and in two different ways) that there are serious people who have done back-testing which seems to indicate that there are other tactics superior to DVolT trading. NOW I'm done. No hard feelings. Good-bye. It would be sad if indeed you left this forum. I always appreciated your posts and found them valuable, and I always learned something even if it was not always actionable for me. Reconsider..
|
|
|
Post by Chahta on Dec 2, 2022 0:42:26 GMT
Come on guys.......please don't......
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Dec 2, 2022 1:20:49 GMT
Richardsok went out on a limb to tell us what he does. I am purchasing the book this weekend. I respect this and think we all do. Norbert challenged the results which is to be expected. If I write a strategy I would expect the same and welcome it. The forum on how it is challenged or commented on needs to be revisited. We should show respect and kindness when we can.
Strategies - my heavens! We've heard a number of them, no? I tend to agree with Norbert as to looking for the holy grail. But, no one - and I do mean no one - has cracked that nut despite claims otherwise. You would be a billionaire. And, we are not. Instead we are near-retirees or retirees who know more than average and have some ideas to exchange. Maybe rather than look at something as a wholesale strategy to adopt or in turn be disregarded, some ideas can be gleaned to help our individual situations. I fully believe I will find that in Richardsok's book as I have learned some things from his posts and others. If you are not learning on this site, why are you here? If you know it all, why are you here?
So, Richardsok, please know you are respected - so much so I don't understand what you do! This is a season of giving, charity, and good will to all. Good values to embrace.
Finally, I would highly suggest - if one feels a need to address someone in a manner they would not normally do so in a group social setting, take it to a private message or Chang.
Best to all of my fellow BB Bozos! You rock!
|
|
|
Post by Chahta on Dec 2, 2022 1:42:25 GMT
Amen Sara.
I’ve always been a Bozo but it is in the open now. 🤡
|
|