Ivan,
I think we have the same goal in mind, to narrow down the cattery and the signals to the point where the chance of signal failure is as low as possible. I just think you're willing to make assumptions about what makes a good cat vs. a bad cat before we've quantified it as such. I say lets play all the signals on paper at least by the currently established parameters and see which ones succeed and which fail without discarding some because of this or that. So you can say, "That's a questionable signal because of such and such," which might be a very valid point and may keep some of us out of a bad trade and may not. But when you say, "That's not a cat, or that's not a signal," you're mistating, because it is until we officially narrow the field. Unless of course I or whoever discovered the signal is mistaken about price or volume. I very much would like to talk about the validity of any signal before taking a position in the stock, so keep those objections to trading a signal coming.
Rule Number Whatever: Any cat "signal" day that does not perform as was expected (let's say by both of us, plus any card-carrying 56er who can PREDICT the failure) must be identified as a "type," and that type shall be forever banished from the cattery. Well, maybe not forever, but ...
Instead of banishing it, let's type it and note the failed signal. After a few failures, maybe we can establish whether one signal failure is a good or bad thing. The results could go either way. Maybe we'd end up disregarding first signals... who knows.
I agree SGI chart looks weak because it is just now breaking to new lows. The H&S pattern doesn't bother me though because it is not occurring at the top of a price uptrend. I'd be looking for reverse H&S here.
It would be great if you would voice your opinion about questionable signals like you have been doing before the trade fails or succeeds. You know the expression about hindsight.
Esteban |
