Holy Grail Indicator For Dow Jones

[Spam Man]

You created a website just for your family and friends? In that case here is some more of the feedback that you so desire : You are the world's biggest nerd.

That wasn't an e-mail, my techno-plegic friend, it was a post which some naughty moderator attempted to delete before it poisoned your fragile little mind. But look moderators, he LIKED it! Do you see?!?! Trendmagic is clearly not a man to be disheartened by some gentle ribbing.

I find it quite disheartening that a poster like this is allowed to continue posting to a chat room.

Ah.Oh well. But seriously though trendtragic, it is deeply odd to create websites for your "friends and family" unless you are running an illegal betting syndicate or a paedophile ring or something. Luckily however you've probably got about another year or so before your recently-renamed "Lovely Cup Of Tea With A Nice Biscuit" indicator curls off another trade, perhaps you could spend this time doing something more constructive?

 

[Directional]

That wasn't an e-mail, my techno-plegic friend, it was a post which some naughty moderator attempted to delete before it poisoned your fragile little mind. But look moderators, he LIKED it! Do you see?!?! Trendmagic is clearly not a man to be disheartened by some gentle ribbing.


Ah.Oh well. But seriously though trendtragic, it is deeply odd to create websites for your "friends and family" unless you are running an illegal betting syndicate or a paedophile ring or something. Luckily however you've probably got about another year or so before your recently-renamed "Lovely Cup Of Tea With A Nice Biscuit" indicator curls off another trade, perhaps you could spend this time doing something more constructive?

LOL! :cheesy:

 

[trendmagic]

Spam Man....your commentary is unworthy . This will be my last post to you.

Mark this down and put it on your wall. You will see this indicator bottom out this fall, October timeframe most likely and it will mark the bottom of the selloff into one of the strongest bull markets you will ever see.

Trend Magic

That wasn't an e-mail, my techno-plegic friend, it was a post which some naughty moderator attempted to delete before it poisoned your fragile little mind. But look moderators, he LIKED it! Do you see?!?! Trendmagic is clearly not a man to be disheartened by some gentle ribbing.

Ah.Oh well. But seriously though trendtragic, it is deeply odd to create websites for your "friends and family" unless you are running an illegal betting syndicate or a paedophile ring or something. Luckily however you've probably got about another year or so before your recently-renamed "Lovely Cup Of Tea With A Nice Biscuit" indicator curls off another trade, perhaps you could spend this time doing something more constructive?

 

[trendmagic]

Mayfly...ill check it out. Havent looked too far into that one. Thanks for the suggestion however.

Trendmagic,

Doesn't the slow Stochastic (20,3,3) give similar - and possibly superior - results on both the Dow & FTSE weekly charts, particularly where this (the stochastic) is calculated on the close? For clarification, the signal only works on the low and when it turns up, i.e. that's the turning point. For that matter, I think you'll find that it works quite well on the daily too, if you're into that sort of thing.

HTH

Cheers

Mayfly

 

[trendmagic]

I dont expect to use this as a stand alone system. I use it to time my option buys...when I double my options exposure.

Good luck.
Seems to be long periods of sitting on hands. This is definitely somethign that would be hard to trade stand alone. How does it perform on shorter timeframes?

 

[trendmagic]

Bramble....Ill answer your questions in sequence.

1. mysmp actually makes it very easy for one to create a website so I did it. I took me about 2 hours to put together. It honestly is a friends and family excercise....there are approximately 20 people within family members who continue to ask for my advice on their investments. If the stie gains popularity....im all for it but this was not my intention. I was literally managing approximately 10 accounts among various brokers and it is just too difficult to do this so I turned their accounts back over to them and told them I would post the information on the web.

2. I typically buy 2 month at the money options. Calls on the DJX. That is just my strategy. The initial surge off the bottom, within a couple weeks, is more than enough to enable a hefty profit for myself. I will then decide whether to roll over or take the profits and go elsewhere.

3. If your referring to drawdown associated with % losses that I am willing to bear after entering a position, its 3%. That is my stop loss. This has happened 2 times since 98. Ill post a chart up with the data going back to 1990. There are more than 15 signals. Patience is the name of the game for me...like I said before...I am trading this signal to make serious money on options and then get out. I know i'll get the juice.

Trendmagic

trendmagic - a few questions as you appear to be asking for feedback.

1. What's the purpose of doing this analysis and publishing the results and presumably your forward predictions on your website? It's obviously more than just a friends & family exercise as the effort involved in setting something up for mass consumption is non-trivial. I'm not going to go down the 'bad nasty commercial interests' route as that has already been done. But if it's not with a view to eventually offering this service as a commercial venture, what is it? What's your motivation? Just interested.

2. You mention you use options. Couple of things then. Does your strategy indicate which strikes or series to go for?

The variation in the length of time the trades are held is quite wide - one day to some months. This makes the selection of the appropriate option a significant factor as time decay is going to be significant (obviously) on the longer trades. Does your system have any basis for predicting the potential length of time the trade will need to be held? If not, options are probably not the best option. :cheesy:

Plus your claimed percentage gains (buying low of day / selling high of day) are based on the underlying level - not the value of the option you have selected - which will be significantly greater given the gearing options provide - when they win. It's not therefore a really valid comparison. Unless you plan on buying CALLS just for your own implementation of your strategy and are going to let others decide how to best trade your signals. In which case, it probably is.

3. Drawdown. Relatively few signals (no, not a bad thing per se) of indeterminate length of time to hold. Do you have data for drawdown?

I apologise for not reading the entire thread (time is a a REAL premium at the moment for me) before posting this, but if you've covered any/all of these points already, just tell me to 'do my own research' and I'll take it on the chin, quite deservedly. Otherwise, I'll be interested in your responses.

 

[PKFFW]

So if it's a friends and family exercise why did you come here to post about it? Why not just let your friends and family know about your website so they can manage their accounts themselves as is your stated intention?

If you want feedback and constructrive criticism then more detail about the indicator is needed otherwise there is nothing to comment on. At present it is just some lines drawn on a chart. So why post here about it without giving any real information on which to base feedback?

If it is proprietary, that is fine. By it's very nature though, no one here is going to be able to be able to give feedback on the actual proprietary indicator as no one will know anything about this proprietary indicator to begin with. So again, why post here about it?

Cheers,
PKFFW

 

[trendie]

......
Mark this down and put it on your wall. You will see this indicator bottom out this fall, October timeframe most likely and it will mark the bottom of the selloff into one of the strongest bull markets you will ever see.

Trend Magic

It is generally accepted that the market falls quite sharply around Sept/Oct. I think it is the Labor Day / Thanksgiving Day phenomena, whereby the Dow rises from there, and continues into and just beyond Christmas.

You are referring to a well-known seasonal event.

If your indicator picks it up, then fine. But be wary of letting your indicators, (and thus yourself), take the credit for a previously understood seasonal phenomena which we all know about.

 

[roguetrader]

3. If your referring to drawdown associated with % losses that I am willing to bear after entering a position, its 3%. That is my stop loss.

Trendmagic, how do you measure your 3% stop loss? By committing 3% capital to a trade or something else?

 

[TheBramble]

3. If your referring to drawdown associated with % losses that I am willing to bear after entering a position, its 3%. That is my stop loss.

No, I wasn't asking about your stop. I was asking about drawdown.

Between the two dates you have given in all of your signals, what is the most that a position would have gone against you in terms of points? That is, if you'd stayed with it without any stop, what would have been your worst exposure, even if the trade subsequently came right for you.

And are you saying your system requires a 3% stop? If so, is that 3% of entire trading capital, or 3% of starting level, or something else altogether?

Plus, does your system have any basis for predicting the likely length of time the trade will run?

 

[trendie]

TheBramble,

I dont want to pre-empt trendmagic, but isnt the advantage of buying options is that the max exposure is your purchase ONLY ?

If the market is at X, and one person buys cfds, or spread-bets, and the other buys call options:
the max exposure to SB would be the (points drop times money per point)
for the option-buyer, max exposure would be (cost of option), which is already paid for.
( and thus, no hairy margin-calls )

I think I should explore options more!

flip-side is that option-buyer would have time decay working against them.

EDIT: I am assuming the guy is BUYING them instead of WRITING them.

 

[TWI]

The advanatge of this indicator is that you only have to look at it about 3 times before you retire.

 

[roguetrader]

but isnt the advantage of buying options is that the max exposure is your purchase ONLY ?

Unfortunately not everyone sees it that way, which can cause grave problems.

flip-side is that option-buyer would have time decay working against them.

Yes the dimension of time into the equation causes problems to many.

 

[trendie]

another thought occurred to me. ( 2 in one day - must take nap in afternnon )

the possible flaw in trendmagics idea of options, is that a precipitious drop would imply greater volatility, and increase the premium in the price of the options, so he may be buying them at their most expensive.
and as the market recovered, and reached some semblance of order, and narrower ranges, the value of the option would reduce. (maybe I should leave options alone)

 

[The Dutch Clown]

just an other Holy grail that falls to pieces...

This has already been mentioned by someone else but no reply has come so far if I am correct. The indicator shown in the graphs looks like an oscillator and since there are two lines it is most likely a Stochastic, the third line has the characteristics of a moving average which in some situations is helpful using an oscillator. Back testing this oscillator , mind you any oscillator , is of no use at all since generally they don’t work in the future based on past performing results, the term “lagging” might ring a bell here. One has to understand the nature and formula of an indicator to be able to apply or even base trading decisions on.

There is however a route to customize an oscillator like the Stochastic but it is a piece of tough work and I yet did not come to work on it basically since other techniques prove to be extremely successful not by back-testing but by actual trading.

Mind you I do not mean to shown any form of disrespect here just having studied some TA backgrounds wondering what somebody drives to present a Holy Grail here.

rgds.

 

[tradetrade]

I didn't read all previous posts, so I apologize if I'm repeating...But the indicator, the so called "Holy Grail", is this (I set it in 5 minutes (and not many months..)and it is not a great indicator.. ):

PS: I inserted also a copy of his chart, to make possibile to compare it..

 

[trendmagic]

Good question...its 3% on the price of the DOW JONES. I buy options so if I get stopped, I take a decent hit.

Trendmagic, how do you measure your 3% stop loss? By committing 3% capital to a trade or something else?

 

[trendmagic]

Ah Ha...your getting close but not close enough. Even if you had the indicator parameters, there are a whole slew of rules I use to buy and sell. Indicators is only 40% of the deal.

I didn't read all previous posts, so I apologize if I'm repeating...But the indicator, the so called "Holy Grail", is this (I set it in 5 minutes (and not many months..)and it is not a great indicator.. ):

PS: I inserted also a copy of his chart, to make possibile to compare it..

 

[trendmagic]

When the market is dropping like a rock, CALL premiums are very low

another thought occurred to me. ( 2 in one day - must take nap in afternnon )

the possible flaw in trendmagics idea of options, is that a precipitious drop would imply greater volatility, and increase the premium in the price of the options, so he may be buying them at their most expensive.
and as the market recovered, and reached some semblance of order, and narrower ranges, the value of the option would reduce. (maybe I should leave options alone)

 

[tradetrade]

Ah Ha...your getting close but not close enough. Even if you had the indicator parameters, there are a whole slew of rules I use to buy and sell. Indicators is only 40% of the deal.

The indicator IS the same...A simple Stochastic..

You said that your "magic" indicator say you where Dow Jones sign the bottom while it fall..Simple rule, but it is not "magic" and it doesn't work everytime...The rules are show in this page: http://trendmagic.mysmp.com/portal/index.php?linkID=39_S ..(you cancel the name of indicator and parameters!!!! :cheesy..very very simple rules...Now you would invent new rules to deny that your system is very simple and that it doesn't work so good..

All these secrets for a very simple indicator..You got it in months of works????:cheesy:

Indicator is only 40% of the deal? And why you didn't want to reveal it so?...bah

In this forum you should talk about systems with other user, to help each others...and not to sell your "magic" system...remember this