Hello Chela Sanjay Arora, The only difference between the Master and the Chela is the question!
<snip> I am newbie to TA. Trying to experiment with Crossover based buy/sell signal to achieve a decent trading strategy at least for back-testing results that at least end-up in black ;-) <snip> After five years of studying 'trading' 60 - 80 hours per week I have found precious few 'mechanical systems' that work ... so few, in fact, that I can not afford to give any away, as I would soon have none left for myself. However I do share as much as I can by way of hints, spread out over timme, in various locations. The reason I share 90 - 95% of my knowledge is because there are a lot of rip off 'teachers' around, in this field, and because most of the trading books written are not much better than introductory at best and misleading at worst ..... I see no reason for people to waste money, or time, going down the wrong path so I try to help with the little spare time I have ... others in the AB community do likewise. FWIW here are some personal responses to your specific comments: - "Trying to experiment with Crossover based buy/sell signal" AND "Swing Trading". It is good to use one or two case studies and go over and over them to find out why they do not work but in the long run do not 'limit' or stereotype your thinking .... you need to be creative and flexible to find the trading needle in the haystack e.g. What is "Swing Trading" exactly .... you assume that you know what it is, or that I know what you are talking about ... in trading reality the term doesn't mean anything, at least nothing worth thinking about. Probably the person who first coined this term wasn't even a successful trader ... just a successful author. GuruBrian says, "Read one hundred times and believe once". <snip> Maintain a position 100 Shares Long or Short ... Cash in hand 3 times the initial ... Draw-down should not be more than 50% <snip> Good trading philosophy comes before good results. None of the above are relevant to good trading.... they are all part of incorrect Money Management schemes. First you need a trading system with a proven edge (+ ve expectancy) then you apply correct MM and Portfolio Management theory (I suggest you bypass all of the would be MM teachers and go straight to RalphVince .... use his books as a workbook ... perform all of his exmamles in a spreadsheet etc ... take your time ... it takes years for it all to sink in ... after you understand Vince go back and read the rest to see if they are worth the effort compared to Vince's work). <snip>Carry positions overnight<snip> Yes, this does affect outcomes ... overnight moves represent a win or a loss and they vary in magnitude ... the same 'hold overnight' strategy will perform differently on different instruments e.g. I have posted and example here of how some 'markets' gap more overnight than others ... this can apply to instruments within markets too (I haven't posted the explanation as to why but that might come later): http://zboard.wordpress.com/2009/04/12/stock-profile/ <snip> stop-loss at say 20% loss ??,<snip> Yes, stops are a very important part of trading. You need to learn how stops shape the profile of your system where profile == W/L and ave%W/ave%L (part of Core Metric Evaluation, or CME, and BinomialSimulation, or BiSim ). One good way to get feel for this is to experiment with stops and consider: - benchmarking for mechanical systems - how much the entry signal is contributing to the final result - how much the exit signal is contributing to the final result Howard Bandy's book, QuantitativeTradingSystems is one place where AB users can get a headstart towards understanding these vital concepts. <snip>Reverse position on Crossover <snip> I recommend caution with this strategy. for various reasons ... I can't say anymore about that because it is advanced and complex and therefore not suitable for a general forum discussion. It also depends on a case by case analysis e.g. 'the trend is our friend' so if the reverse trade tends to go against the trend I am cautious (of course defining the trend is one of the most challenging tasks facing a trader). Overall: - I suggest that you shouldn't be fixated about what trading is e.g. value investing is a succesful method .. value investors waited years for the opportunities presented to them by what was a crash for most others i.e. last years markets. Warren Buffet sat on the sidelines with cash until the market presented him with some 'not to be repeated in a hurry' bargains. The caveat is that this proven method suits his temperament, and carefully considered objectives..... it doesn't suit me, for several reasons (too boring is one of them). IMO there are a handful of successful stockmarket investing styles ... mechanical system trading is just one of the claimants to that title. I am happy with my progress, after 5 years, but you won't read about my 'style' in the textbooks, or this forum, however you will see a sprinkling of 'traders' who are obviously 'in the same camp'. Sometimes I call myself GuruBrian but that is only in fun. One of my mottos (for the NewAge) is: "I don't deciminate creeds ... only information". GuruBrianZ --- In [email protected], Sanjay Arora <onlinetrade.skpo...@...> wrote: > > Hello All > > I am newbie to TA. Trying to experiment with Crossover based buy/sell signal > to achieve a decent trading strategy at least for back-testing results that > at least end-up in black ;-) Not looking for real trading results yet ;-) > > Assumption: Say Swing Trading ICICI 100 Shares > Maintain a position 100 Shares Long or Short, Carry positions overnight or > more if required by the strategy, Cash in hand 3 times the initial purchase, > stop-loss at say 20% loss ??, Draw-down should not be more than 50% of the > Cash in hand?? > Reverse position on Crossover i.e. if long 100 shares, at reversal exit the > long position & short 100 shares, use trailing stop to secure profits, if > available in the Indian scenario ???. > Back-Testing from 1/4/2007 on Daily Chart, so those with EOD Data can > participate. > > Changes to the above may be suggested by the Gurus. > > Now, my question is: > > What Signals & Oscillators to use and the trading strategy? I tried with > simple SMA, EMA, Stochastics but all end up in significant losses. Want to > build a crossover strategy that will at least teach me what sort of things > to consider. > > Suggest all Gurus to get into Teacher Mode and pick up the stick and all > newbies to work on the same exercise and post to the thread. Also suggest > more exercises of this kind, posted both by Gurus and Newbies. > > With best regards. > Sanjay. >
