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

To: TraderAlan who wrote (14198)	9/22/2001 1:17:45 PM
From: hypostomus	Respond to of 18137

Alan - You've nailed the attitude of engineers in the market. We studied advanced math since around 14 for at least 8 years. We have faith that math can model and predict anything. The problem is that, until it fails to do so, we don't reexamine the fundamental assumptions underlying all that high-powered math. We think that because the market is real, it is a PHYSICAL reality, subject to physical laws. T'ain't true. Lord only knows what problems physicists have learning the market. This is sort of the flip side of the random walkers' fallacy. - Mike

To: TraderAlan who wrote (14198)	9/22/2001 1:36:36 PM
From: MechanicalMethod	Read Replies (1) \| Respond to of 18137

see1 + act2 = outcome3; see1 - act2 = outcome3; I don't see much difference. They're both linear. BTW, what's Leonardo de Pisa's claim to fame? The leaning tower? How do you relate that to TA?

To: TraderAlan who wrote (14198)	9/22/2001 2:36:30 PM
From: Eric P	Read Replies (2) \| Respond to of 18137

Alan, Our understanding of market movement would be greatly undermined if we replaced Gann, Elliott and Leonardo de Pisa with crunchy numbers and supercomputers. I'm a 'numbers guy.' While I'll avoid any criticism of Elliott (excellent IMO for reading the market in hindsight, for me anyway) and Leonardo, I cannot withhold a quick Gann comment. Unless someone can 'enlighten' me, my understanding is that Gann Angles are absolutely 100% worthless, by definition. Gann Angles rely on geometric angles for support and resistance on a price chart (45 degrees, 60 degrees, etc). However, we know that the angles on a price chart are not inherently a function of the price action, but are also critically dependant on the scaling used for the axes in the price chart. The 45 degree angle that you see on your Real Tick chart, for example, may show up as a 52 degree angle on CyberTrader, and perhaps only a 15 degree angle when I plot it manually. => All while using the exact same price data! Imagine a quick example as follows: You are looking at a daily price chart on your computer for WXYZ over the past 1 year, scaled from $30 to $80. You notice that the angles from certain lows to subsequent support appear at a 45 degree angle. => Now the fallacy... Rescale the price data to show the exact same year of data on a chart scaled from $0 to $100. Since you have doubled the Y axis range (to 100 from 50), your support angle will now drop in half from 45 degrees to only 22.5 degrees. Similar changes will occur if you narrow your data to only show 6 months of price action... the angles 'change' again. As a result, any system using Gann angles may as well be throwing darts for support and resistance in my humble opinion. I certainly leave open the possibility that I am wrong with this, but I hope I'm made my point clearly enough for others to follow my logic. In a nutshell, angles on a price chart for a particular stock can only be determined on YOUR price chart, and will not be the same for the other million traders using their own price charts with different axis scaling. Therefore, ten traders rigorously following the principles of the identical Gann angle 'system' can end up with ten vastly different entry or exit points. Gann angles should be avoided, IMO, by all serious traders. -Eric