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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: ftth who wrote (217)	1/16/1998 4:59:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 1720

[ EK Short Sale, Trading Systems, and other Important matters ] Did you like that one? I hope others were able to profit from the analysis, either financially or intellectually. For all the short sales I've searched for, I have never seen one that was better poised to fall both technically and fundamentally (with a much greater weight on the technical side) than EK. After I initiated the short position, I started working on developing a trading system that took advantage of the shorter term price fluctuations as an adjustment to the current market volatility. I have therefore switched from a longer term investment perspective to a shorter term trading perspective. Anyways, the trading system when applied to EK initated a short position on 9/09/97, 11/11/97, and on 1/13/98...all dates that preceded meltdowns for the stock. I'm running into limitations on SuperCharts on the programming capability, but I think it's also because I am not yet proficient in being able to take advantage of the entire range of features. Maybe I'll be able to get past the shortcomings after I actually take the time to read the manual. However, I would like to know if you or others on the thread are using or are in the stages of developing a trading system, and if so, if any would be interested in opening some dialogue about the subject. Perhaps I might spin-off a thread from The Rational Analyst to segment the dialogue away from the (almost) daily stock analysis performed here. Some of the most successful traders, as outlined in Jack Schwager's Market Wizards have admitted to using trading systems to dictate their market decisions. I also understand that they are of a trend-following nature, so that might give a clue as to the direction we could perhaps head to when developing them. What do others think? If there is enough time to be found within my already-crammed schedule, and if enough interest is generated, I'll try the spin-off thread to provide a more focused area of discussion on the subject. Just a little warning though on the time constraints: I'm currently stockpiling a bunch of books that I am looking to read. At last count it was eight, but it could go to ten by the end of the month. I am beginning to think that I need to take a vacation from the postings to take some more time to read these new books and to further educate myself about the market. Despite the FA/TA and investment/trading experience and over 20 books I've read on the market, I still feel my knowledge about the market is still very much incomplete. I'm hoping that others can understand the greater amount of time I will spend away for the purpose of continuing my market education. I will remain plugged into the market, but I am expecting a decline in the stream of postings on my part. But who knows, with the amount of interesting facts and techniques I am bound to uncover, it may have the reverse effect of increasing my posts-- I've found that teaching a subject is a great way to learn about it. Good night. Rainier

To: ftth who wrote (217)	1/16/1998 12:11:00 PM
From: Cornstock	Read Replies (1) \| Respond to of 1720

Dave, I'm so new at this TA stuff that you wouldn't want my opinion. But I agree with you that bigger stocks the strong ones on the NYSE and NASDAQ do not allow much imbalance from standard deviation. I have noticed that if a strong stock hits its' lower bb or drops below it, it immediately pops back in and will usually move up. The volume on that move up increases also, and almost immediately. I am wondering if those are program trades that are triggered. On the other hand, if the higher bb is penetrated on stronger stocks, it is not as releveant but does seems to indicate that at a minumum it usually will at least indicate a basing period for strong stocks. They don't seem to stay above the bb. I beleive that the above is only true when there are no outside influences such as good new or bad news. For weaker stocks and even the high flyers, moving outside the bbs seems to indicate an exhaustion phase - both at the top and at the bottom of their bb's. However, the smaller stocks don't behave very well, and other TA indicators seem to be much more important. Again, I have to emphasize that I am very much a rookie at this and you know what they say about keeping your mouth shut when you don't have knowledge. At this point I'm only looking at it from the perspective of trying to solve a problem, or answer a question based on the available information..

To: ftth who wrote (217)	1/16/1998 12:28:00 PM
From: Cornstock	Respond to of 1720

On the same bb subject, I looked at EQNX and it has exceeded it bb for a few days and with no news to give it more energy, it seems it should have moved down almost immediately. . However, there was good news reported on the 14th regarding earnings, so I think that negated the upside exhaustion phase.

To: ftth who wrote (217)	1/17/1998 5:22:00 PM
From: milesofstyles	Read Replies (1) \| Respond to of 1720

dave, what you may be looking for is the correlation coeffient, i believe this validates the deviation, not exactly sure as it has been a while, but i think that is what you need , formula wise , i might be able to dig up an old stats book for you if interested, i've wondered abput these bands as well, i've seen many go from upper to lower in proper fashion, but my questions fall along the same line as yours, if you pull up any stock on a breakout , i would be pretty sure it is touching or exceeding an upper band, my guess is with a strong breakout, and further deviation from the ma is going to expand the bands and i don't think i am going to worry too much about a stock reaching that upper band in this breakout stage, i would probably disagree with peg c about the exhaustion, as with volume increases , these look to be strong moves. i would also guess these stocks would eventually be caught by their ma , but , in many cases that i'm seeing and reading about, this became another buying opp before another run. i am also fairly new to all this , but this is the new found knowledge i have been following,