Trade SMART

S

SMART_Trader

Active Member
#191
#191
kkseal said:
SMART, pls don't consider my previous post as criticism of your system. I agree it's a good method on the whole & the best thing about it is that it can get better (without disrupting the existing framework).

Regards.
Click to expand...
Not at all Kalyan. Constructive criticism is always helpful. I started thinking seriously about a shorting system after reading your post.This weekend I was thinking about the situations under which a stock can fall a lot.I have identified three situations.

1.Stocks that have run a lot will rise steeply, gap up and breakdown
2.Stocks that gained a lot in a compressed time frame will mean revert.
3.Many shares fall Immediately after earnings announcement.Poor results will depress stock prices.Many stocks that have run up a lot on expectation of good results will also start falling even after good results.

All the three situations look promising.I trade pure price,volume action nothing else.I will work on these concepts.

I have gone through an old system implementation thread in this forum.They were working from the wrong end.You cannot build a system on an indicator.Indicators are not systems, they are only tools.Logical concept is more important.Successful systems can be built only on logical concepts using appropriate tools.

Another trap is traders try to build a fully automated system where subjective selection is not involved.As a result the most important part is ignored. Instead of selecting the right stock they start trading signals on random stocks and lose money.

I do not have the skill or knowledge to build automated systems.Final selection is subjective in my methods. I also need a role in the play!
Probably you may differ.
 
K

kkseal

Well-Known Member
#192
#192
I'm assuming you'll look for possible outperformers with shorts too. If so, the first 2 situations that you have outlined (trend & swing reversal) would rest on the premise that momentum (the absolute, scalar form) is persistent i.e. stocks exhibiting sharp rises on the upside revert to a sharp fall on the downside when the (short or long term) trend reverses. Now comes the need for a way to define & identify (preferably but not necessarily in a quantitative manner) a trend reversal; here i think indicators etc. (the tools) would play a role, but as you rightly said the concept, premise, foundation is more important (like using a different set of indicators to identify the same thing doesn't result in a different system unless there's a change in the underlying concept as well). Earnings contraction (often preceded by margin compression - i've seen this in Autos) can also be good a thing to use but many may not consider this to be within the realms of TA (personally i do not have any such reservations Any thing that helps me stay ahead is welcome)

A lot of the subjectivity can also be automated, but the constraint lies in the limitations of our knowledge, time & resources. Even if the requirement is clear in my mind i may not be able to do it all by myself (& i do not have the money or set-up to hire PhDs). So as small individual traders we have to live with a bit of discretion. (Like rising inflation, a grunting Reddy, drooping currency may ring an alarm bell in my mind regarding rate sensitives although i may not be able to draw up the perfect correlation model for the same.)

Impressed by your attitude as well :)

Regards,
Kalyan.
 
U

uasish

Guest
#193
#193
Thks Kalyan for your view,by the by can we pull our collective capabilities to address those lacking areas which need attention.Request both of you to initiate a start.
 
K

kenneth

Well-Known Member
#194
#194
SMART_Trader said:
Breakouts 30/05/2008

DRREDDY

INFOSYSTCH


More Breakouts

FII net sellers at Rs 1083.90 Crores
Click to expand...
Hi Smarttrader

SmartTrade scan has flagged Cambal Fert. Scan on 29th May has not flagged out Dr.Reddy and Infosys. What could be the reason

Thanks & regards
ken
Code: 
Ticker      Date/Time	Close	YrGrowth	MlyGain	FlyGain	%fromYH	DayGain	VolGain	
CHAMBLFERT6/10/2008	78.00	135	10	4	15	4.63	3	
CHAMBLFERT6/12/2008	83.20	151	14	-10	9	4.52	-10	
CHAMBLFERT6/13/2008	91.20	162	23	-4	0	9.62	110
 
Last edited:
S

SMART_Trader

Active Member
#195
#195
Kenneth
I think you are running the scan on your database.Original scan will not give infy and Reddy.I have made some variations on it as the universe of 100% + stocks have shrunk.Refer to post no 172.
Regarding chambal you are right.always concentrate on sectors which are doing well. But considering the present state of market breakouts may not work well .Please have a look at the market internals on my blog.Once the number of stocks gained more than 25% per month exceeds that have fallen more than 25% per month breakouts start working.
 
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