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TheRumpledOne
6,358 posts
msg #81275
Ignore TheRumpledOne
10/16/2009 4:56:06 PM

So nice to see traders helping traders!!

TheRumpledOne
6,358 posts
msg #81276
Ignore TheRumpledOne
10/16/2009 4:56:56 PM

Animals in Translation: Using the Mysteries of Autism to Decode Animal Behavior
by Temple Grandin and Catherine Johnson

When highly verbal people get control of the audit process, they tend to make five critical mistakes:

* They write verbal auditing standards that are too subjective and vague, with requirements like "minimal use of electric prod" and "non-slip flooring." Individual inspectors have to figure out for themselves what "minimal use" means. A good audit checklist has objective standards that anyone can see have or have not been met.

* For some reason, highly verbal people have a tendency to measure inputs, such as maintenance schedules, employee training records, and equipment design problems, instead of outputs, which is how the animals are actually doing. A good animal welfare audit has to measure the animals, not the plant.

* Highly verbal people almost always want to make the audit way too complicated. A 100-item checklist doesn't work nearly as well as a 10-item checklist, and I can prove it.

* Verbal people drift into paper audits, in which they audit a plant's records instead of its animals. A good animal welfare audit has to audit the animals, not the paper and not the plant.

* Verbal people tend to lose sight of what's important and end up treating small problems the same way they treat big problems.

Page 268 - 269 Animals in Translation

====================

Sounds like these same people also write trading systems.

Kevin_in_GA
3,751 posts
msg #81304
Ignore Kevin_in_GA
10/17/2009 7:53:04 PM

TRO:

Still learning this one, so hopefully a few questions worth answering (and yes, I have read this thread several times, as well as others you have on using this for Forex).

My first question is this - would an equally correct definition of a cow be one that can be regularly milked for 1% profit each day? Looking at AAPL, making 1% is a challenge based on the share price. A cow could as easily be defined as a stock that frequently gaps up/down, and then fills that gap, and also has a decent day range above and below the open price - why not screen for stocks that always gap up/down by a minimum percentage (say 0.5%), but usually move up/down by 1+% each day. guaranteeing the gap is filled?

My second question is this - why is the buy zone a set amount in cents, versus a set percentage of the open?

Example:

Yesterday's AAPL play - open was $189.25, buy zone was $0.40. Going back to when AAPL was trading in the $80ish range, the buy zone was still $0.40. It is always $0.40, regardless of the value of the cow being milked. Why is this not scaled to the stock price? The current MTC scan looks only at stocks that frequently move $0.50, rather than, say 1%. A 50 cent move on AAPL right now is only about 0.25%.

at $0.40, the entire Buy Zone was only 0.21% of the stock price. If the buy zone were set based on a percentage of the open price (say, 0.1-0.2% in each direction) then one could work with lower priced stocks that don't have to regularly hit 50 cents as the "cow" criterion.

I am not disputing the success of the system - quite the opposite. What I am trying to do is understand if the system can be played on lower priced stocks. My trade yesterday on AAPL had me make ~$1 per share - a good trade by MTC standards. However, I had to put $19,000 into play to get $100 back. If I had put the same amount in CNO (opened at 6.76) and used a 0.02 cent trigger on either side, I would have made almost 5 times as much by 10 AM.

Just asking to understand, not challenge.

Kevin

TheRumpledOne
6,358 posts
msg #81310
Ignore TheRumpledOne
10/17/2009 9:49:45 PM

A further complication
One further complication of seeing needs mentioning. The eyes
gather visual information by constantly scanning the environment.
But visual data from "out there," gathered by sight, is not
the end of the story. At least part, and perhaps much of what we
see is changed, interpreted, or conceptualized in ways that
depend on a person's training, mind-set, and past experiences. We
tend to see what we expect to see or what we decide we have seen.
This expectation or decision, however, often is not a conscious
process. Instead, the brain frequently does the expecting and the
deciding, without our conscious awareness, and then alters or
rearranges?or even simply disregards?the raw data of vision
that hits the retina. Learning perception through drawing seems
to change this process and to allow a different, more direct kind of
seeing. The brain's editing is somehow put on hold, thereby permitting
one to see more fully and perhaps more realistically.
This experience is often moving and deeply affecting. My
students' most frequent comments after learning to draw are
"Life seems so much richer now" and "I didn't realize how much
there is to see and how beautiful things are." This new way of seeing
may alone be reason enough to learn to draw.

The New Drawing on the Right Side of the Brain

http://www.4shared.com/file/109993404/6ec80112/The_New_Drawing_on_the_Right_Side_of_the_Brain.html

TheRumpledOne
6,358 posts
msg #81311
Ignore TheRumpledOne
modified
10/17/2009 9:54:42 PM

My first question is this - would an equally correct definition of a cow be one that can be regularly milked for 1% profit each day?

No.

My second question is this - why is the buy zone a set amount in cents, versus a set percentage of the open?

Because that is the way I designed it. If price moves X cents, what are the statistical probabilities it will move Y cents.

RUN FOREST, RUN was designed for percent changes.

MILKING THE COWS is for INCOME GENERATION. Trading 1000 shares, you make $100 for every 10 cent movement in your direction. $400/day * 250 trading days/year = $100k/year.

RUN FOREST, RUN is for AGGRESSIVE GROWTH. Compounding your account by 2% or more per day will make you rich.

I am not disputing the success of the system - quite the opposite. What I am trying to do is understand if the system can be played on lower priced stocks.

I DO NOT ADVISE USING LOWER PRICED STOCKS DUE TO VOLATILITY, VOLUME AND RANGE considerations.

It always amazes me how people want to change something BEFORE they master it.









Kevin_in_GA
3,751 posts
msg #81332
Ignore Kevin_in_GA
10/18/2009 10:00:41 AM

My first question is this - would an equally correct definition of a cow be one that can be regularly milked for 1% profit each day?

No.

(Kevin pokes the bear with a sharp stick) - Why not? Other than the pedantic view that "it is not a cow because it is not AAPL or RIMM", can you explain why a daily $1 move on AAPL makes it a good "cow" but a 1% move on another stock does not qualify it for the same status?

My second question is this - why is the buy zone a set amount in cents, versus a set percentage of the open?

Because that is the way I designed it. If price moves X cents, what are the statistical probabilities it will move Y cents.

RUN FOREST, RUN was designed for percent changes.

So the difference is in definition (cent versus percent) - if a stock statisitcally moves 50 cents a day, regardless of its stock price, it is a COW, and if it moves 1% a day or more, it is a RFR stock?

MILKING THE COWS is for INCOME GENERATION. Trading 1000 shares, you make $100 for every 10 cent movement in your direction. $400/day * 250 trading days/year = $100k/year.

Every trade I make is for income generation - at least that is my goal when I hit the button. However, I don't have $200K to trade every day on AAPL. I am looking to take the simplicity and statistical edge seen in MTC and adapt it to my limits and goals.

I am not disputing the success of the system - quite the opposite. What I am trying to do is understand if the system can be played on lower priced stocks.

I DO NOT ADVISE USING LOWER PRICED STOCKS DUE TO VOLATILITY, VOLUME AND RANGE considerations.

Understood.

It always amazes me how people want to change something BEFORE they master it.

I knew asking questions regarding adapting this strategy would evoke this response. You are correct in that I am nowhere near mastering any strategy yet, as I am still trying to master my trading behaviors - until that is done, I put my monies at risk with every trade. Hopefully you'll be willing to continue a dialogue on this?

luc1grunt
622 posts
msg #81358
Ignore luc1grunt
10/18/2009 9:11:55 PM

You have not been around long enough Kevin. The "bear" will not be boxed into a corner. It will result in...."it's not what, but how", or "you should know what it is without explanation".

Just trying to save you some time bro, LOL!.

See you on the finnyvizzy.

Kevin_in_GA
3,751 posts
msg #81366
Ignore Kevin_in_GA
modified
10/19/2009 8:13:25 AM

I'm an optimist. Willing to listen to what TRO says, but willing to ask questions about it as well. Following without questioning is exactly what TRO rails against in other threads (which shall go nameless for now).

Hopefully he sees this as a positive trait.

timfor
17 posts
msg #81386
Ignore timfor
10/19/2009 3:13:00 PM

Hello,

I have been reading this thread with great interest and was wondering if anyone who has a Ninjatrader Script for the various zones would be willing to email it to me at: timforest@hotmail.com

Thanks in advance to anyone willing to share their Ninjatrader script.

Tim

TheRumpledOne
6,358 posts
msg #81402
Ignore TheRumpledOne
modified
10/19/2009 8:13:16 PM

I invented this so it is what I decided.

I was using cents and not percent when I ran the statistics.

I had certain range and volume criteria that I wanted.

There is no other answer.

Feel free to use it, not use it, or alter it to fit your trading needs.

"I am not forcing you to accept my concepts. I only request the traders to review the market from time to time keeping in mind my concepts and if found suitable use in the trades or just ignore."



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