For me I'm looking at chart patterns (techncial analysis) so naturally enough I am looking for a bottom to form. There are several types of these (obviously these are all available on the web) however I recommend for background reading:
encylopedia of chart patterns by Thomas N. Bulkowski
examples include V bottom, double bottom, triple bottoms
And you probably know that charts are fractal in nature. Bottoms can form in intraday charts but that is not the basis for a long term trader to trade - they need to see bottoms form over half years or years.
So if your friend just bought because the price went down - thats not good enough - you need to wait to see a bottom form on an appropriate timescale before plunging in.
However common sense (which I have none off unfortunately) can be another good indicator: the Dow Jones plunged 50% of its value and an inverted Head and Shoulders formed - that would have been good enough for me to take a stab.
OIL for example went from $148 to about $38 a barrel - a whoopping 75% discount - if you went into a shop and there was 75% discount on something you know people needed on a daily basis the store would be sold out in seconds - I was telling people to buy OIL futures if they could afford it (I can not unfortunately)
And when is a bottom not a bottom? Its when it is a continuation pattern ie the trend continues downwards. If that happens you then decide to take the loss or not.
I also recommend to a friend to buy gold as it was going down to $700 an ounce region a couple of years ago. 1 kilo of gold was 19k a kilo it is now 27k a kilo. Again I do not have the money to invest.
I did buy palladium though - £300 per 50 grams (that included VAT) its about £717 (inc VAT) now. Although I have just learned a lesson there too - the physical dealers spread is ridulous!!
Even though in theory I have double my money I'm only able to get less than £500 for the bar! The dealer does not pay any VAT when buying (I think the rate is 1% below the LIBOR)
We got a sharp recession wave - inevitably there would be a bounce.
Dow jones plunges 1000 points or 10%
my statement was a broad statement which reflects the current sentiment in the markets!
The markets are massively complicated and all interconnected globally. The euro is taking a dive because of greece and this is affecting the stock indexes around the globe. People are investing their money in more stable instruments hence gold/us treasuries etc.
I really wouldn't rely on a simple time based indicator to trade any of these markets. They are way more complicated than that! In fact I don't use any indicators! I use the only exchange endorsed method of trading in the world. Alongside a number of other things but thats the problem with trading you simply can't mechanise it. The difference between a profitable trader and a none profitable trader trading the same thing is discretion and that is something you can never put in an indicator. Its also the reason why indicators don;t really work.
The markets are massively complicated and all interconnected globally. The euro is taking a dive because of greece and this is affecting the stock indexes around the globe. People are investing their money in more stable instruments hence gold/us treasuries etc.
I really wouldn't rely on a simple time based indicator to trade any of these markets. They are way more complicated than that! In fact I don't use any indicators! I use the only exchange endorsed method of trading in the world. Alongside a number of other things but thats the problem with trading you simply can't mechanise it. The difference between a profitable trader and a none profitable trader trading the same thing is discretion and that is something you can never put in an indicator. Its also the reason why indicators don;t really work.
Hi Jimrobo
I take it you're a fundamentalist trader then?
I agree that the markets (whether we are talking about Betfair or the financial markets) are hugely complicated. Nevertheless, there are patterns that repeat themselves time and again, in all markets.
You may be right about systems requiring a degree of judgment, but doubt is cast on this theory by the fact that there are purely mechanical systems which are backed up by statistics. There are examples in a book called Trend Following, by Michael Covel.
Do you trade Betfair using form, or purely using what you see on the charts?
Jeff
I take it you're a fundamentalist trader then?
I agree that the markets (whether we are talking about Betfair or the financial markets) are hugely complicated. Nevertheless, there are patterns that repeat themselves time and again, in all markets.
You may be right about systems requiring a degree of judgment, but doubt is cast on this theory by the fact that there are purely mechanical systems which are backed up by statistics. There are examples in a book called Trend Following, by Michael Covel.
Do you trade Betfair using form, or purely using what you see on the charts?
Jeff
jimrobo wrote:my statement was a broad statement which reflects the current sentiment in the markets!
The markets are massively complicated and all interconnected globally. The euro is taking a dive because of greece and this is affecting the stock indexes around the globe. People are investing their money in more stable instruments hence gold/us treasuries etc.
I really wouldn't rely on a simple time based indicator to trade any of these markets. They are way more complicated than that! In fact I don't use any indicators! I use the only exchange endorsed method of trading in the world. Alongside a number of other things but thats the problem with trading you simply can't mechanise it. The difference between a profitable trader and a none profitable trader trading the same thing is discretion and that is something you can never put in an indicator. Its also the reason why indicators don;t really work.
Hi Ba1000
I think parabolic blowoff tops are a good sign that the market may be about to turn (on Betfair and in the financial markets). See http://www.thestockbandit.net/2007/05/1 ... owoff-top/
As I understand it, the theory is that (in the case of a rising market) everybody gets excited about an instrument and buys it. Then suddenly the sellers begin to dry up and people rush to sell to avoid being the person without a seat when the music stops, causing the price to tumble downwards.
Jeff
I think parabolic blowoff tops are a good sign that the market may be about to turn (on Betfair and in the financial markets). See http://www.thestockbandit.net/2007/05/1 ... owoff-top/
As I understand it, the theory is that (in the case of a rising market) everybody gets excited about an instrument and buys it. Then suddenly the sellers begin to dry up and people rush to sell to avoid being the person without a seat when the music stops, causing the price to tumble downwards.
Jeff
ba1000 wrote:For me I'm looking at chart patterns (techncial analysis) so naturally enough I am looking for a bottom to form. There are several types of these (obviously these are all available on the web) however I recommend for background reading:
encylopedia of chart patterns by Thomas N. Bulkowski
examples include V bottom, double bottom, triple bottoms
And you probably know that charts are fractal in nature. Bottoms can form in intraday charts but that is not the basis for a long term trader to trade - they need to see bottoms form over half years or years.
So if your friend just bought because the price went down - thats not good enough - you need to wait to see a bottom form on an appropriate timescale before plunging in.
However common sense (which I have none off unfortunately) can be another good indicator: the Dow Jones plunged 50% of its value and an inverted Head and Shoulders formed - that would have been good enough for me to take a stab.
OIL for example went from $148 to about $38 a barrel - a whoopping 75% discount - if you went into a shop and there was 75% discount on something you know people needed on a daily basis the store would be sold out in seconds - I was telling people to buy OIL futures if they could afford it (I can not unfortunately)
And when is a bottom not a bottom? Its when it is a continuation pattern ie the trend continues downwards. If that happens you then decide to take the loss or not.
I also recommend to a friend to buy gold as it was going down to $700 an ounce region a couple of years ago. 1 kilo of gold was 19k a kilo it is now 27k a kilo. Again I do not have the money to invest.
I did buy palladium though - £300 per 50 grams (that included VAT) its about £717 (inc VAT) now. Although I have just learned a lesson there too - the physical dealers spread is ridulous!!
Even though in theory I have double my money I'm only able to get less than £500 for the bar! The dealer does not pay any VAT when buying (I think the rate is 1% below the LIBOR)
We got a sharp recession wave - inevitably there would be a bounce.
I'm not a fundamental trader at all. Trading is a very very simple game. The problem is there is so much rubbish out there!
Sure, there are books that back up systems that are all for sale! There are blackbox systems that make money that you can buy but the point is all these systems are money making systems in themselves rather than an insight into how to trade properly.
How many trading professionals do you think actually use these systems or use simple things like MACD's? You don't really think there are trainee traders in the city teaching mechanised systems of how to trade looking for a MACD crossover do you?
I do think there are a place for indicators if thats your thing but only as a trade confirmation or in conjunction with some other stuff. If you are blindly following indicators then you won;t make as much money as an intuitive manual trader if any at all. The figure thats thrown around in the financials is 85% of all traders fail.
Its the same with betfair too. People look for information how to trade. What to look for in graphs etc. Its a simple game sit in front of a market for 100 races watching exactly the same things and you see how the market moves. You don;t need anything other than a ladder and a lot of experience. If you are looking for a system then you;ve already lost.
Sure, there are books that back up systems that are all for sale! There are blackbox systems that make money that you can buy but the point is all these systems are money making systems in themselves rather than an insight into how to trade properly.
How many trading professionals do you think actually use these systems or use simple things like MACD's? You don't really think there are trainee traders in the city teaching mechanised systems of how to trade looking for a MACD crossover do you?
I do think there are a place for indicators if thats your thing but only as a trade confirmation or in conjunction with some other stuff. If you are blindly following indicators then you won;t make as much money as an intuitive manual trader if any at all. The figure thats thrown around in the financials is 85% of all traders fail.
Its the same with betfair too. People look for information how to trade. What to look for in graphs etc. Its a simple game sit in front of a market for 100 races watching exactly the same things and you see how the market moves. You don;t need anything other than a ladder and a lot of experience. If you are looking for a system then you;ve already lost.
Hi Jimrobo
I agree that trading is very simple and that there is lots of rubbish out there.
However, that doesn't mean that systems don't work. I bet that, if you were to record your thoughts whilst trading, you would discover that you use certain algorithms, eg 'when a and b happen, I do c'. A good system gives a trader tried-and-tested algorithms to use.
I think the big challenge with trading, once you have a system that works, is applying it with consistent discipline. There is an interesting talk about this by Mark Douglas at this link: http://club.ino.com/trading/2008/07/sat ... s-mindset/
Jeff
I agree that trading is very simple and that there is lots of rubbish out there.
However, that doesn't mean that systems don't work. I bet that, if you were to record your thoughts whilst trading, you would discover that you use certain algorithms, eg 'when a and b happen, I do c'. A good system gives a trader tried-and-tested algorithms to use.
I think the big challenge with trading, once you have a system that works, is applying it with consistent discipline. There is an interesting talk about this by Mark Douglas at this link: http://club.ino.com/trading/2008/07/sat ... s-mindset/
Jeff
jimrobo wrote:I'm not a fundamental trader at all. Trading is a very very simple game. The problem is there is so much rubbish out there!
Sure, there are books that back up systems that are all for sale! There are blackbox systems that make money that you can buy but the point is all these systems are money making systems in themselves rather than an insight into how to trade properly.
How many trading professionals do you think actually use these systems or use simple things like MACD's? You don't really think there are trainee traders in the city teaching mechanised systems of how to trade looking for a MACD crossover do you?
I do think there are a place for indicators if thats your thing but only as a trade confirmation or in conjunction with some other stuff. If you are blindly following indicators then you won;t make as much money as an intuitive manual trader if any at all. The figure thats thrown around in the financials is 85% of all traders fail.
Its the same with betfair too. People look for information how to trade. What to look for in graphs etc. Its a simple game sit in front of a market for 100 races watching exactly the same things and you see how the market moves. You don;t need anything other than a ladder and a lot of experience. If you are looking for a system then you;ve already lost.
For me I dont use blackbox systems - I have tried lots and lots of things which is why I have gone broke.
We are gambling full stop period!
These are the only general rules you need:
1) what is the reason you are entering the market?
2) what do you expect to happen and how long will you give it to happen?
3) what are you going to do if it does not happen?
Thats it no more no less (at least I hope I have not forgotton something
)
I once said:
"I am always right the only exception is when I am wrong "
We are gambling full stop period!
These are the only general rules you need:
1) what is the reason you are entering the market?
2) what do you expect to happen and how long will you give it to happen?
3) what are you going to do if it does not happen?
Thats it no more no less (at least I hope I have not forgotton something
)I once said:
"I am always right the only exception is when I am wrong
"Let's say I have a tiny edge against the biggest casino in the world - the financial markets.
If I can apply that edge consistently then, however crude my methods are, sooner or later I will have all the money I could want or need.
In other words, I'll settle for my 85%!
I haven't yet put this theory to the test, but I plan to...
Jeff
If I can apply that edge consistently then, however crude my methods are, sooner or later I will have all the money I could want or need.
In other words, I'll settle for my 85%!
I haven't yet put this theory to the test, but I plan to...
Jeff
jimrobo wrote:but thats the problem if you think there is a mechanical system that works and you can just find out what it is and use rules from that system then you are already in the 85% and unlikely to make it into the 15%.
Sorry I dont agree with this. If you have an edge and can define it (using stats over a sufficient period) then its not gambling?ba1000 wrote:For me I dont use blackbox systems - I have tried lots and lots of things which is why I have gone broke.
We are gambling full stop period!
"
I take your point, but what stats are you using to quantify your edge?
Are you taking the view that, if you make consistent profit over a large enough number of races, then that is evidence of the effectiveness of your approach?
Jeff
Are you taking the view that, if you make consistent profit over a large enough number of races, then that is evidence of the effectiveness of your approach?
Jeff
PeterLe wrote:Sorry I dont agree with this. If you have an edge and can define it (using stats over a sufficient period) then its not gambling?ba1000 wrote:For me I dont use blackbox systems - I have tried lots and lots of things which is why I have gone broke.
We are gambling full stop period!
"
Hi Jeff,
I'm using an excel program, so there is no ambiguity. I've been collecting my data since last April and use the spreadsheet that Nigel K produced.
I know that there are certain courses that return a negative (I dont know why, but they do). For example Wetherby, Musselwell (?) and Plumpton are courses I dont use. Conversely, Chester is my best course for my system. I never bet on Irish courses as they are negative too.
Nigel's sheet measures strike rate etc etc so I know what my edge is and can measure it
regards
Peter
I'm using an excel program, so there is no ambiguity. I've been collecting my data since last April and use the spreadsheet that Nigel K produced.
I know that there are certain courses that return a negative (I dont know why, but they do). For example Wetherby, Musselwell (?) and Plumpton are courses I dont use. Conversely, Chester is my best course for my system. I never bet on Irish courses as they are negative too.
Nigel's sheet measures strike rate etc etc so I know what my edge is and can measure it
regards
Peter
Hi Peter
That's curious.
Do you think that this could be due to differences in liquidity, perhaps because some courses have more higher profile races or a higher proportion of low-priced horses?
Regards
Jeff
That's curious.
Do you think that this could be due to differences in liquidity, perhaps because some courses have more higher profile races or a higher proportion of low-priced horses?
Regards
Jeff
PeterLe wrote:Hi Jeff,
I know that there are certain courses that return a negative (I dont know why, but they do). For example Wetherby, Musselwell (?) and Plumpton are courses I dont use. Conversely, Chester is my best course for my system. I never bet on Irish courses as they are negative too.
-
CaerMyrddin
- Posts: 1271
- Joined: Mon Sep 07, 2009 10:47 am
"An investigation into the mysterious plunge found no single cause was to blame"
From the article Peter attached... what a big surprise!
I can't see how "circuit breakers" and prohibiting short selling (as in Germany, Greece and Portugal) is going to solve the problem. I can imagine a stock being put on hold for 10 minutes and everyone hit the sell button during that period.
I also find very amusing that stocks aren't suspended when they are soaring. I wonder why?
From the article Peter attached... what a big surprise!
I can't see how "circuit breakers" and prohibiting short selling (as in Germany, Greece and Portugal) is going to solve the problem. I can imagine a stock being put on hold for 10 minutes and everyone hit the sell button during that period.
I also find very amusing that stocks aren't suspended when they are soaring. I wonder why?