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Post by junkster on Mar 6, 2023 19:24:00 GMT
The most insightful dialogue I ever read about trading was the Charles Faulkner’s interview in the second Market Wizard book by Jack Schwager, There was an extended discussion about various technical indicators and methodologies. The traders who were successful, even using worthless indicators and methodologies, were those who over time had developed some sort of intuitive experience about price. Too lengthy of a discussion to post here.
I should add that all indicators and methodologies are based on price. The further you get away from pure price action by adding an array of technical indicators the further you get away from price. The vast majority of market wizards profiled by Schwager who traded for a living - as opposed to those who labored away at some other profession - were almost universal in their distain for technical indicators.
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Post by uncleharley on Mar 6, 2023 20:11:55 GMT
The most insightful dialogue I ever read about trading was the Charles Faulkner’s interview in the second Market Wizard book by Jack Schwager, There was an extended discussion about various technical indicators and methodologies. The traders who were successful, even using worthless indicators and methodologies, were those who over time had developed some sort of intuitive experience about price. Too lengthy of a discussion to post here. I should add that all indicators and methodologies are based on price. The further you get away from pure price action by adding an array of technical indicators the further you get away from price. The vast majority of market wizards profiled by Schwager who traded for a living - as opposed to those who labored away at some other profession - were almost universal in their distain for technical indicators. I strongly disagree with your 2nd paragraph. Some market breadth indicators are based on volume such as up & down volume. Many sentiment indicators are based on surveys, others are based on trading volume. And there are also a plethora of economic indicators that many like to confuse with stock market indicators. Oh, I almost forgot about line charts versus up, down & close, as well as Candlestick charting.
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Post by junkster on Mar 6, 2023 20:28:09 GMT
The most insightful dialogue I ever read about trading was the Charles Faulkner’s interview in the second Market Wizard book by Jack Schwager, There was an extended discussion about various technical indicators and methodologies. The traders who were successful, even using worthless indicators and methodologies, were those who over time had developed some sort of intuitive experience about price. Too lengthy of a discussion to post here. I should add that all indicators and methodologies are based on price. The further you get away from pure price action by adding an array of technical indicators the further you get away from price. The vast majority of market wizards profiled by Schwager who traded for a living - as opposed to those who labored away at some other profession - were almost universal in their distain for technical indicators. I strongly disagree with your 2nd paragraph. Some market breadth indicators are based on volume such as up & down volume. Many sentiment indicators are based on surveys, others are based on trading volume. And there are also a plethora of economic indicators that many like to confuse with stock market indicators. Oh, I almost forgot about line charts versus up, down & close, as well as Candlestick charting. You won’t get any blowback from me. Should have said Faulkner said “ All these technical methods are based on price”. For someone like myself who has been using sentiment indicators since the mid 80s and up/down volume thrust since the early 90s can’t argue with you.
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Post by newtecher on Mar 6, 2023 21:31:54 GMT
He's never spelled out a particular method, but his trades appear to be well reasoned out. I'm doubtful intuition can result in consistent success. It boils down to terminology and interpretation, I think. 'Intuition' is a funny word; often conflated with 'guessing'. Otoh, combine observation with reasoning, and your feelings become 'experience' or 'skill'. The distinction between the two things is down to how much data and introspection is involved, imho. Anyway, in the vernacular, no, I don't think intuition is the right word choice. I did not mean "guessing" or generally imply anything negative when I wrote intuition. I just meant something that cannot be easily formalized and taught to other people.
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Post by FD1000 on Mar 6, 2023 22:21:56 GMT
Several comments 1) There are many books written about T/A, no way to cover/convey all my thoughts 2) You can show a chart to 10 chartists, and you will hear several opinions. Fundamental analysts have similar problem. If T/A isn't reliable, fundamental isn't either. If it was millions would be billionaires. Most funds managers should beat the "stupid" SPY by a mile, after ER, if fundamental works. So, let's agree that both are not a slam dunk and why KISS = using limited number of funds, and hardly trading will get most investors above average performance. That's because the SP500 have above average performance over LT. 3) Up to now (I hope I read all the posts) nobody mentioned the most important key for many, called Risk-adjusted performance, other investors, especially retirees with nice portfolios, don't care about performance that much but care a lot more not to lose. I'm in this camp. I can be out for months, especially with MM paying 4.6+%. So, if investor X made 10% annually for 10 years with SD(volatility) = 17 and investor Y made 9% with SD=5, I want to be investor Y. 4) I don't believe in one method. Most of what I do is at my site, it includes big picture (You got to know markets, history, sentiment (VIX), pay attention to the Fed.) + T/A + Other(includes the art part) ( fd1000.freeforums.net/thread/25/putting-all) 5) My generic old trading includes mostly wide range stock categories. I found out that daily-weekly volume doesn't work, it works for single stocks and narrow categories(think gold, silver, oil, commodities). I can easily prove if you trade daily-weekly volume for SPY, it would not do well. 6) All my T/A indicators are based on the price. The price never lies, it's the ultimate indicator. Example: Uptrend are coming directly from the price. I use only several very basic LT+ST indicators. My idea was always simplicity. 7) I'm very skeptic about everything before I implement it and test it many times in the past to see if it works. 8) Since 2000, I used uptrends + fund chart volatility. You can easily include 5 funds on a chart and see which one has better uptrend with lower volatility. I only started using other T/A when my portfolio was big enough and I didn't want to lose much. The more I used it, I learned more and tweaked it. These T/A indicators helped me with better exit/entry because it's an absolute, you see the signal very clearly. That doesn't mean I must do it, it means get ready. In some cases I would do it immediately. Example: I can wait 1-2 days(even weeks if big picture is very risky) to buy an uptrend, but I sell much quicker on the first sign of risk/volatility/signal because portfolio preservation is more important + markets usually go down quicker than going up 9) So, if I put it all together: there is no one trick pony. You got to have a written system that includes several keys. You got to be able to explain it to others, and they should be able to practice it. 10) Lastly, just like swimming, you can't learn how to swim by watching, you actually have to do it. Even if you do it, good results are not a guarantee.
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Post by mozart522 on Mar 6, 2023 22:39:38 GMT
Bottom line for me is every CPI report can change everything drastically, and so can every jobs report. I don't see how TA or FA can predict any of this.
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Post by FD1000 on Mar 6, 2023 23:08:05 GMT
Bottom line for me is every CPI report can change everything drastically, and so can every jobs report. I don't see how TA or FA can predict any of this. See the chart below. Easy stuff: green bars=buy...red bars=sell + twice=do nothing. It is always the case and easy? no, that's why practice makes you better. Since 01/2022, everything was very easy Attachments:
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Post by newtecher on Mar 6, 2023 23:21:42 GMT
Several comments 1) Fundamental analysts have similar problem. If T/A isn't reliable, fundamental isn't either. If it was millions would be billionaires. Most funds managers should beat the "stupid" SPY by a mile, after ER, if fundamental works. So, let's agree that both are not a slam dunk and why KISS = using limited number of funds, and hardly trading will get most investors above average performance. That's because the SP500 have above average performance over LT. Very true
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Post by Deleted on Mar 6, 2023 23:25:23 GMT
We have a couple folks here who put it out there and post what they are doing. Kudos to them. They are taking risk and helping others.
Respect to Richard and UH.
The 10-yr return of SPY, which I'd consider LT and many consider the yardstick, is 12.34%. Everything else is just noise.
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Post by FD1000 on Mar 7, 2023 5:00:38 GMT
We have a couple folks here who put it out there and post what they are doing. Kudos to them. They are taking risk and helping others. Respect to Richard and UH. The 10-yr return of SPY, which I'd consider LT and many consider the yardstick, is 12.34%. Everything else is just noise. Let's look at 2 periods in the last 10 years 5 years of 2013-2017 ( PV) = CAGR=15.7%...SD=9.5...Sharpe=1.6 5 years of 2018-2022 ( PV) = CAGR=9.3%....SD=18.6...Sharpe=0.5 So, while it used to be easy in 2013-17 (high performance + low SD), the last 5 years were not (SPY was down 20+% three times, I was out in all 3)...and it can get worse which is were avoiding losses can be very beneficial.
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Post by Fearchar on Mar 7, 2023 11:53:53 GMT
Not posting trades in real time leaves a negative impression.
Thank you to UH and Richard!
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Post by mozart522 on Mar 7, 2023 19:42:23 GMT
Nobody here owes anyone real time trading posts. Those who share what they do in real time provide information. Those who post what they have done also provide information. With the exception of the buy, sell, and why thread, no one should be expected to provide any specifics that they don't care to provide. It isn't a red flag, and the apparent implication that they are lying is no more sound than the assumption that everyone on an anonymous board lies about everything.
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Post by racqueteer on Mar 7, 2023 21:08:28 GMT
There's no question that no one on here 'owes' anyone anything. If you find something being said to be useful, that's great. Otoh, if you're trying to convince someone of something, there is also no doubt that your actions can either add of detract from your efficacy at being persuasive. Ultimately, it behooves you to decide for yourself who and what is credible, and how much you want to share in order to be pursuasive.
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Post by Mustang on Mar 8, 2023 1:43:31 GMT
From this thread: "The main reasons for this continued research, as discussed in Zhu and Zhou (2009), were that previous studies of the profitability of technical analysis obtained inconclusive results and lacked a scientific basis." "The only book I have read on TA is Evidence-Based Technical Analysis by David Aronson. It shows that NONE of the commonly used TA indicators produce outperformance statistically distinguishable from noise when used to time S&P500 purchases and sales." "First, that TA works more effectively (if it works at all) with the lowest volatility trading assets you can find. Secondly, the more sophisticated one becomes in applying sundry TA patterns, the more poorly you will do -- because any trader forever looking for cup-and-handles or heads-and-shoulders or flags and engulfing vectors of all sorts is apt to stumble upon exactly what s/he wants to see -- and TA devolves into a sort of confirmation bias akin to palm reading or astrology." Inconclusive results... lacked a scientific basis... akin to palm reading or astrology. Interesting comments by those who use it.
I think I'll stick with dollar-cost averaging.
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Post by chang on Mar 8, 2023 7:19:55 GMT
Nobody here owes anyone real time trading posts. Those who share what they do in real time provide information. Those who post what they have done also provide information. With the exception of the buy, sell, and why thread, no one should be expected to provide any specifics that they don't care to provide. It isn't a red flag, and the apparent implication that they are lying is no more sound than the assumption that everyone on an anonymous board lies about everything. Agreed that no one owes anyone real-time posts (or anything else). On the other hand, when a gambler only mentions his winnings and never mentions his losses, people generally don’t give it much credence. IMO a little humility goes a long way. The problem with being right 100% of the time is that nobody will believe you (even if it’s true).
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Post by mozart522 on Mar 8, 2023 19:58:11 GMT
Nobody here owes anyone real time trading posts. Those who share what they do in real time provide information. Those who post what they have done also provide information. With the exception of the buy, sell, and why thread, no one should be expected to provide any specifics that they don't care to provide. It isn't a red flag, and the apparent implication that they are lying is no more sound than the assumption that everyone on an anonymous board lies about everything. Agreed that no one owes anyone real-time posts (or anything else). On the other hand, when a gambler only mentions his winnings and never mentions his losses, people generally don’t give it much credence. IMO a little humility goes a long way. The problem with being right 100% of the time is that nobody will believe you (even if it’s true). I don't disagree with your OTOH comment, but that seems directed at a specific case or cases. I was reacting to the general comment "Not posting trades in real time leaves a negative impression." It doesn't, in general, with me. Everything posted is potentially good information. . Some I'll use and some I won't. The poster's personality or style is not a factor for me. You have set up ways to deal with that if it becomes a problem for someone.
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Post by Norbert on Mar 9, 2023 4:15:09 GMT
Agreed that no one owes anyone real-time posts (or anything else). On the other hand, when a gambler only mentions his winnings and never mentions his losses, people generally don’t give it much credence. IMO a little humility goes a long way. The problem with being right 100% of the time is that nobody will believe you (even if it’s true). I don't disagree with your OTOH comment, but that seems directed at a specific case or cases. I was reacting to the general comment "Not posting trades in real time leaves a negative impression." It doesn't, in general, with me. Everything posted is potentially good information. . Some I'll use and some I won't. The poster's personality or style is not a factor for me. You have set up ways to deal with that if it becomes a problem for someone. I certainly agree that no one here should feel obligated to disclose their wealth levels, portfolio contents, or trades. No problem whatsoever in keeping that information private. On the other hand, if someone publicly claims to be a "trader", to have developed a successful system, and only posts winning trades after the fact, then I do expect to see evidence of that: trades posted in real time. Otherwise his credibility will approach zero. Sure, we can just ignore that which we don't appreciate. But, when combined with other disruptive forum behavior, I think pretentious, disingenuous online behavior will lead to the departure of valuable posters and compromise the forum itself. Do you remember Sara? When that starts to happen, we all have a problem.
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Post by oldskeet on Mar 11, 2023 12:33:37 GMT
Hi guys. During the week Old_Skeet's Barometer produced a reading of undervalue for the S&P500 Index. With this, I added a sum equal to about one half of one percent to my equity allocation. Should the Barometer produce a reading of over sold I will then add another full one percent, perhaps more.
For me, I am thinking that the FOMC under current investment conditions is reaching a point that they are going to have to stand pat on their rate increase program as things are now beginning to break. If so, then I want to be a little overweight in my equity allocation. Thus my noted action detailed above.
I remain fully invested within the confines of my asset allocation of 20,% cash, 40% bonds and 40% stocks with rebalance thresholds set at + (or -) 2% neutral weightings. In addition, I can overweight both my stock and bond allocations by up to 5% each while letting cash float.
Wishing All ... Good Investing.
OS
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Post by mnfish on Mar 11, 2023 13:12:07 GMT
I think the (Powell) "there will be some pain" is just beginning. Now, where the SP, Dow, Nasdaq goes from here is anybody's guess but I don't believe the time to buy "indexes" has arrived yet. For me, I'll nibble at a few single stocks and wait for my 15% position in 6mo treasuries to come due in June and see what markets looks like then.
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Post by gman57 on Mar 11, 2023 13:18:56 GMT
I think this SVB bank failure changes everything... especially if more dominoes fall.
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Post by uncleharley on Mar 11, 2023 13:27:50 GMT
I have to agree with O S's analysis, but my strategy is different from his. For the short term the S&P 500 looks weak. The takeover of that Silicone Valley Bank is significant if one follows the Cockroach Rule. That rule says that if you see one Cocktoach, you will find a hundred when you shine the light in more corners. While I am waiting for more Cockroachs to become visible I have opened a position in GDXU in anticipation of a declining USD as a result of the Fed needing to back off a bit. That is a lot of speculation on a lot of unknowns, but now you may have an inkling why you probably should not pay any attention to me.
EDIT: Apparently Wells Fargo is having some "technical" problems with the balances of some customer accounts and missing transactions. Just thought I would mention it.
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Post by mnfish on Mar 11, 2023 13:39:46 GMT
It'll be interesting to see if someone steps up to buy SVB next week. We'll get a much better idea of what their $200b in assets are really worth and if anyone wants their debt.
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Post by Fearchar on Mar 11, 2023 14:26:30 GMT
mnfish errh....SVB failed! That is it was shut down by the California Department of Financial Protection and Innovation, citing inadequate liquidity and insolvency. The state regulator appointed the Federal Deposit Insurance Corporation as receiver. The FDIC transferred insured deposits to a new institution, the Deposit Insurance National Bank of Santa Clara. The failure of SVB was the largest of any bank since the 2008 financial crisis and the second-largest in U.S. history.
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Post by fritzo489 on Mar 11, 2023 14:41:49 GMT
If reporter is correct : $250 K available Monday, any amount over that later in the week. Time will tell .
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Post by retiredat48 on Mar 11, 2023 15:07:11 GMT
If reporter is correct : $250 K available Monday, any amount over that later in the week. Time will tell . But a huge percentage of depositors in this bank had way more than $250,000 FDIC insured amount. They began withdrawals and it is this "run-on-the-bank" that was the problematic part... Remember folks, no bank can withstand a 100% run on its deposits. R48
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Post by retiredat48 on Mar 11, 2023 15:11:42 GMT
From WSJ: The Federal Deposit Insurance Corp. shut down Silicon Valley Bank Friday after a run on deposits doomed the tech-focused lender's plans to raise fresh capital.
In a press release, the FDIC said it created the Deposit Insurance National Bank of Santa Clara, where all Silicon Valley Bank's insured deposits have been transferred.
At the time of the bank's closing, the FDIC said the amount of deposits in excess of insurance limits was undetermined.
As of the end of last year, Silicon Valley Bank estimated that the amount of uninsured deposits that exceed FDIC insurance limits was around $151 billion, according to parent company SVB Financial's annual report.
Customers will have full access to their insured deposits no later than Monday morning, the FDIC said. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors. The FDIC said Silicon Valley Bank's main office and 17 branches in California and Massachusetts will reopen on Monday.
--------------------------------------------- Interesting...FDIC CREATED this Santa Clara facility!!
And once again, the gvt is bailing out the big investors (uninsured depositors with millions). Heaven forbid they should lose money.
Edit to add: Gotta keep those NAPA Valley winery owners whole! Oops, my daughter works for a NAPA valley winery.
R48
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Post by johntaylor on Mar 11, 2023 15:26:45 GMT
The bank may have failed, but its virtue signals like "closing the Latinx wealth gap" were strong (cf. Bankman-Fried and effective altruism)
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Post by win1177 on Mar 11, 2023 16:02:49 GMT
Hi guys. During the week Old_Skeet's Barometer produced a reading of undervalue for the S&P500 Index. With this, I added a sum equal to about one half of one percent to my equity allocation. Should the Barometer produce a reading of over sold I will then add another full one percent, perhaps more. For me, I am thinking that the FOMC under current investment conditions is reaching a point that they are going to have to stand pat on their rate increase program as things are now beginning to break. If so, then I want to be a little overweight in my equity allocation. Thus my noted action detailed above. I remain fully invested within the confines of my asset allocation of 20,% cash, 40% bonds and 40% stocks with rebalance thresholds set at + (or -) 2% neutral weightings. In addition, I can overweight both my stock and bond allocations by up to 5% each while letting cash float. Wishing All ... Good Investing. OS I added to International equity (VTIAX and VIAAX) late this past week on overall market weakness, as well as throwing a little more into muni bond funds (VWAHX and VWITX) earlier in the week. Still sitting on about 77% domestic equity, 9% International, 3% bonds, and 11% cash (money markets). Slowly building up bond side, but a ways to go to get to ~10% target. With money markets paying reasonably, not in any big hurry now. I know some will criticize our “high equity” allocation, especially since I retired now, but I’m OK with the volatility and it’s a large portfolio, so a certain amount is legacy for kids, future grandkids, and maybe charity. Win
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Post by newtecher on Mar 11, 2023 16:36:59 GMT
. Interesting...FDIC CREATED this Santa Clara facility!!
And once again, the gvt is bailing out the big investors (uninsured depositors with millions). Heaven forbid they should lose money.
Edit to add: Gotta keep those NAPA Valley winery owners whole! Oops, my daughter works for a NAPA valley winery.
R48
Bizarre sentiment. Taking over insolvent banks is what FDIC was created for. Would you prefer to live in the world without it, with chain reaction bank runs and everyone worrying about the solvency of their bank?
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Post by mozart522 on Mar 11, 2023 16:41:43 GMT
I don't disagree with your OTOH comment, but that seems directed at a specific case or cases. I was reacting to the general comment "Not posting trades in real time leaves a negative impression." It doesn't, in general, with me. Everything posted is potentially good information. . Some I'll use and some I won't. The poster's personality or style is not a factor for me. You have set up ways to deal with that if it becomes a problem for someone. I certainly agree that no one here should feel obligated to disclose their wealth levels, portfolio contents, or trades. No problem whatsoever in keeping that information private. On the other hand, if someone publicly claims to be a "trader", to have developed a successful system, and only posts winning trades after the fact, then I do expect to see evidence of that: trades posted in real time. Otherwise his credibility will approach zero. Sure, we can just ignore that which we don't appreciate. But, when combined with other disruptive forum behavior, I think pretentious, disingenuous online behavior will lead to the departure of valuable posters and compromise the forum itself. Do you remember Sara? When that starts to happen, we all have a problem. Norbert, So for a specific case(s) I agree. However suggesting it is pretentious, disingenuous, and disruptive has been said for years. And yes, I remember Sara, and perhaps others have departed also. So the options seem to be ignore, leave, or moderator involvement. Bringing it up over and over again by posters doesn't seem to have changed anything. And while it isn't a problem for me, if it is for others then it likely should be addressed.
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