StockFetcher Forums · General Discussion · create collective intelligence from all technicians?<< >>Post Follow-up
6 posts
msg #73380
Ignore screenulator
4/8/2009 2:24:14 AM

What do you think of this idea? Has it been done before? Would you participate with or without a prize?

Although technical analysis is considered by many to be rigid and all based on mathematical formula, the essence of it still requires human ingenuity. First, coming up with a formula or a method requires considerable skill and observation, then even more work is needed to verify the usefulness of such formula or methods. Many methods requires subjective interpretation such as trendlines and chart patterns. The exact same chart can incite opposite opinions to two different technicians. For example, violation of a down trendline could mean breakout buy signal to one or a sell signal to another if he sees it as Fibonacci retracement. Another example, a double top pattern would be a sell signal to one, but could be buy signal to someone trading the range as the price moves close to the bottom trendline. The point is that interpretation and application of technical analysis methods are pretty much still an art. And even for those using mechanical systems, the design, testing and optimization of those systems requires thinking.

To date, I do not think there is a perfect method or formula, but there are good ones and bad ones. And I believe there is a way to scientifically measure their goodness and make use of that information to be a better trader. The objective of this project is to congregate opinions all good technicians for the benefit of all participants. As a collective intelligence we can give probability ratings and expected percentage change for any particular stock during a given time frame. This information will be compiled into a data table to be shared with all participants. In order to ensure the participants give opinions not just based on pure speculation, luck or personal gain, one has to prove he/she possesses a good trading system or methodology. Once you are qualified, you will be a designated technician and part of collective intelligence, and will be able to contribute and receive information from it.

This is where technician's contest comes in, as a selection method for "good" technicians. It will not be a repeat of virtual stock challenges done by the other sites before. The winning criteria is not just pure percentage gain where one can easily cheat by creating multiple accounts and screen for most volatile stocks of the day and just by luck one of his accounts will get the right one and score a huge return.
This contest will require the following:
1. Describe your method: Write a brief description of your trading system or methodology. You do not have to give out all the secrets or details, but just enough to get an idea about what the system is based on, trend following, range trading, or neuro-network? And is it time frame specific, if so what? Also is it purely technical or some combination with fundamental analysis? Also include back testing results or past performances if you have them. Also you must have a screening method for stocks, not just your favorites you have been tracking for the last 2 years. If this section is convincing enough, this alone will qualify you as a designated technician.

2. Balanced simulation: To eliminate the effects of luck as much as possible, you can start on any day, select a minimum 20 stocks, or maximum 50 to be in your portfolio. Half (50%) of them has to be long position and the other half 50% has to be in short position. This is because a major overall market move can make even a bad system look good if you are on the right side of trend. So in order to truly evaluate a system, it has to be able to minimize the loss even if it happens to be in the wrong side of major trend.
One might ask "What if I am really good at predicting long term trend? I will never have 50% long and 50% shorts in real trading". My reply to that is I believe you are really good at predicting LONG term trend, but it will also take LONG time to prove you are right, and since there is no scientific way to prove your are right in a practical time frame, we will all just have to turn into a religious group worshiping you as our leader.
At the same time the pool of long and short positions entered, you must enter stop orders for closing them. One cannot accept a trading system with no stop as a good system. You can choose to enter limit order as well, but you do not have to. You can choose to close your position with a market order anytime you wish, or wait for one of your limit or stop orders to fill. But all positions must be closed within 20 days. Even if in the end you make a positive return, the percentage draw down while you were holding these positions will also be entered into consideration.

3. Continuous evaluation: As a designated technician, you make stock picks, entry / exit picks. All of these performances will be recorded. All other designated technicians can see your ratings and the higher your average/historical rating is the more weight your say is on new stock pick.

36 posts
msg #73425
Ignore traderseb
4/9/2009 6:38:02 AM

It's a joke right??? LOL

724 posts
msg #73445
Ignore 13th_floor
4/9/2009 9:26:39 PM

"It's a joke right??? LOL"

A looooooooong drawn out one to at that!

293 posts
msg #73448
Ignore stocktrader
4/9/2009 10:11:27 PM

Remember, screenulator is just here to pump his web site and charge for premuim services later. Trying to create false challenges to gain knowledge to which he deems more valuable than the meager prizes offered.

Have you seen any filter that screenulator has offered up in a post? ;-)

Typical pump and dump.

6 posts
msg #73470
Ignore screenulator
4/11/2009 2:02:30 PM

Stocktrader, I made no reference to in this thread yet you are persistently accusing me of "pump and dump" the term I dont even see the relevence at all. Since you bring it up, I have received numerous emails from members of this board expressing interest in using as part of their trading strategy after initial viewing. Again I am not trying to make money from I have spent years developing a profitable screening and trading system on my own without knowing the existence of this site or alike. Screenulator does not contain the whole of the trading system, but some components are expose such as the results of trendline and pattern algorithms, but how they are combined to generate trading signals is not revealed. I simply want to share my unique perspective to fellow traders and perhaps improve on my trading system. I can understand you feel threatened, but I have no interest in taking business away from SF and I would appreciate if you could offer some constructive advise rather than being offensive.

Now back to the original thread, no it is not a joke. But I humbly accept my ignorance if you could enlighten me why you think it is not a good idea. If similar ideas already exist or have been tried before and did not work, please let me know. I have pretty been working "in the vacuum" on my trading system trying not to be influenced and mislead by outside world event for 3 - 4 years so you can say I am very much out of touch with the real world. I did find Motley Fool's CAPS but it does not really work in my opinion. First, you can get simply get lucky if the market goes your way or vice versa. It does not really prove your skill. In recent months, the majority of stocks with 5 star CAPS rating went down 50% or more. That is why I think balanced long/short ratio is the best way to test if a strategy works. Second, it is mostly based on fundamental analysis which I believe is the real source of pump and dump. I do not want to get into it you can find enough TA vs fundamental discussions in published forms. Then third, it takes forever. There is no fixed time frame on CAPS so a lot of members with high score were simply there long enough and accumulated enough scores compared to the new comers no matter how good they are they will not get enough scores in short period of time. Again I am just here to gather some ideas, not trying to promote anything. You might be right it might be a bad idea. That is why I post it to find out if there is any interest at all. It is better to find out now than wasting any more of my time on it. thank you.

293 posts
msg #73480
Ignore stocktrader
4/12/2009 12:44:11 PM

I concede. This is a joke and a long drawn out one at that, per prior comments.
MARY4MONEY makes better and more informative posts.

StockFetcher Forums · General Discussion · create collective intelligence from all technicians?<< >>Post Follow-up

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