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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Matthew L. Jones who wrote (6218)	12/28/1999 9:36:00 AM
From: Richard Estes	Respond to of 18137

Something to remember: the absence of a return to at least 38% shows strength. Look at ELCO, yesterday. It held above 38% from friday's last hour low. It exceeded 263% increase.

To: Matthew L. Jones who wrote (6218)	12/30/1999 2:03:00 PM
From: F Robert Simms	Read Replies (1) \| Respond to of 18137

<I did a study on different moving averages (as support-resistance) on the S&P futures. I looked at every conceivable time frame and length, both simple and exponential. Funny thing was that I could not find a single one that had any degree of consistency (maybe slight correlation on the 10 and 20 but pretty random). > Very interesting comment that you made. I suspect that there may be a flaw in your study. A friend of mine says that the 30 min 34 ema has made more than 450 points this year. I don't have all of his rules down. Sorry about that. He is willing to acept draw downs. That may be one of the flaws in your analysis. Your limits may be too narrow. Best Wishes, Bob P.S. I have been using a modified version of his system in the Player's Club contest and have doubled my account in one month. Mine is modified because I don't know all the details of his. <ggg>

To: Matthew L. Jones who wrote (6218)	1/1/2000 8:46:00 PM
From: Robert Graham	Respond to of 18137

I do not believe the widespread use of the same TOOLs negate their validity. Now, the trading of the same SETUP in the same way is another question. And this still can lead to a successful FADE of the setup. The only time I think popular recognition of the same setup, like lets say a H&S pattern, can be invalidated is when the same pattern is broadcasted on many journals and in particular TV programs. In other words, the picture has to be painted in a way that is very apparent to all, like neon signs advertising the pattern that is on a particular chart. And then it may still trigger and resolve a distance before reversing. There still can profit in a short term trade that does not depend on price meeting its price objective when the H&S pattern is triggered, including the FADE of the breakout of the pattern. I have found instances where a pattern was very "obvious" to me but perhaps not as obvious to those who did not know what to look for and it still triggered. Perhaps there can be more than one way to look at a pattern, and therefore more than one way to play it? How about different time frames? What is a pullback before a trigger of a pattern on a larger time frame can be another setup on a smaller time frame that is played when it triggers. All price needs to do is resolve the smaller setup in order to trigger the larger pattern. There may be traders taking the trade on the larger pattern anticipating its trigger starting with the smaller setup. Then there may be others to jump in for a continuation if price moves "enough" from the trigger of the pattern to validate the pattern to other traders. Another side of this picture is that if the market is going to sell off, and it wants to sell off, it will sell off. And the H&S can provide the market the excuse it was looking for to sell off. While it appears to be true that when a given pattern is "textbook obvious" or brought to the attention of the public at large, the pattern tends not to do what is "expected", there are so many elements to this that there is no simple answer. But I think it really has to do with perception and where the focus is currently being placed by many traders. And when events occur to validate the pattern to "enough" traders, then it becomes operative...in other words real and on the "map" of the market. Otherwise, it is just a collection of price movements that happen to make up the pattern in the mind of the observer. For this reason, I see patterns, particularly in larger time frames, "dormant" until proven "operative". There are clues, for example the price action leading up to the trigger point and the speed the market is trading, that one can use to help determine the likelihood of the pattern resolving in an anticipated fashion. In other words, I let price itself reveal the market's intentions. I find second guessing the market's intentions with a specific pattern does not work for me. Just my opinion of course. Bob Graham PS: The 20 EMA I find to work well for the SPOOs in multiple timeframes. Also works well for many stocks and indices. Just do not expect it by itself to provide the "answer" for you.

To: Matthew L. Jones who wrote (6218)	1/2/2000 2:15:00 PM
From: F Robert Simms	Respond to of 18137

I thought I would add a few more comments about the 30min34ema system. I did some backtesting this week. This is best a trend following system. Using the slope will reduce the drawdowns when the market goes sideways. This will give enough time that you can switch to a sideways trading system. That doesn?t have large drawdowns if the market goes back to trending. This way you can go from one to the system to the other at your leisure. Best Wishes, Bob