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Strategies & Market Trends : Win Lose or Draw : Be A Steve, Make A Call -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (11377)	6/14/2003 11:03:05 AM
From: Sojourner Smith	Read Replies (2) \| Respond to of 11447

I do not blindly follow Merlin. Partly because it is based lunar cycles, which imo may affect human behavior, but I haven't tested it enough to feel comfortable with it. I saw it had a steep sell-off day. I saw many indicators trending down and I thought it might be right this time. As far as a coin toss... If I could bet on a coin toss with a simple money management technique, I could be easy to make money. Unfortunatley casinos don't have that game, or they set the limits where that technique would only make a small amount per hour. The thing I like about Merlin or a neural net over a an indicator is that it qualifies the direction. If I a see a MACD cross-down with volume divergence and a forecast of a sell-off, it seems increase the probability of success. As far as a neural net between our ears.... next post

To: Win-Lose-Draw who wrote (11377)	6/14/2003 11:48:17 AM
From: Sojourner Smith	Read Replies (3) \| Respond to of 11447

the neural net between our ears... First they say that only 10% are successfull at trading. Then there are a lot of faulty neural nets out there. Here some factors to consider: 1. Human emotion - how does that figure in? Humans have a tendency to link emotion in with learning process, so a human can actually become a worse trader (or gambler) over time. They often mention fear and greed, I think the strongest emotion is ego. The biggest errors I have made were based on wanting to be right. 2. I contend that there aspects of price movement that are designed to fool human logic. What kind of computer systems the market makers use to control demand of shares? If I were them, I would use neural nets to find imbalances and optimal pain points to pull people in. I think they already do. 3. Neural see complex patterns way beyond what a human can see. With daytrading it is more critical. IMO one should assume they will make errors, and therefore should use careful money management and/or hedging. I actually think one should assume they will be right only half the time. However, the unfortunate thing is I am actually am right about 80%, the 20% erase much of my other gains. I went 8 weeks trading about 3 trades, averaging $3000 a week, and in one day I slipped and lost 2 weeks. So not only does one have to be right often, but one absolutely has to manage the trade correctly. But back to the point... The neural net can see and maybe less, but the human can make a costly mistake easily. I would rather have a neural net act the entry and exit and I concentrate on the hedging and money management. So my point is the neural net does not have to be right all the time, but around 70% gives the trader an edge. Regular TA indicators can also work but it becomes more complex in that combinations and exits have to be added.