Milo's TA discussion and sharing thread

[Sinkie]

hi sinkie, would liek to ask, must it be at 0830hrs? can i do it earlier in the day? wats the difference?

You can do it after 5.06pm the previous day.

Wah why you sexposed my name? Lol can edit?

 

[Dividends Warrior]

hi chuen, would liek to ask, must it be at 0830hrs? can i do it earlier in the day? wats the difference?

Chuen?!?!?!!?!?

Or Chueng?

 

[stocklah]

hi chuen, would liek to ask, must it be at 0830hrs? can i do it earlier in the day? wats the difference?

Chuen?!?!?!!?!?

 

[stocklah]

Hi everyone here, I did a test of the MACD trading system on SGX and here are the results. hope it will provide good insights on the strength and weakness on the MACD method if you were to actually put your own money and trade on its signals

MACD Cross over
- Entry condition :Buy upon Cross over of [ 12-day (EMA) less the 26-day EMA ] With [ its own 9 day EMA ]
- Exit condition :Sell upon Reverse Cross over of [ 12-day (EMA) less the 26-day EMA ] With [ its own 9 day EMA ]

Interesting, looking at the chart, the MACD system doesn't to be an outperformer. I have attached a Moving Average Cross system (based on monochrone's idea), it seem to be better one compare to MACD.

 

[Sinkie]

Chuen?!?!?!!?!?

Or Chueng?

My whatsapp name lor. Means "water", my bazi fortune element lol

 

[supratentorium]

wahkao3

I really like the way you think about risk although it seems noone is. Other than risk, if one places a stop based on logic, it just tells you you are just dead wrong. If one does the value investment thingie, isn't there a price you are willing to call it "junk" if it trades below your "value"?

You mentioned
"As long as the broker cut loss within my parameters, I have 100% no regret even if the stock go up 200% after my cut."
Of course if it really happens i think most human beings will have some regret. You are really on another level if you can put it behind you after some fleeting emotions. It's fool's gold, it's not yours to keep. You basically just got washed out of the market.

"Correct me if I am wrong, I believe the main reason why they (or any other BB) dont cut loss because they cant! They hold too much volume in the counter that any cut loss they do will probably drive prices down to the toilet!"
You are right. That will happen, a margin call. That's what happened in gold. Someone just puked a lot.


"I cannot picture myself doing that without going through any emotions. Maybe you can because you are seasoned. I cannot"

I am with you on this one.
Putting a initial stoploss in the market is a one time thing. After you put it in, it's "passive" (not on SGX though through standchart, what a pain in the *ss)
It gets hit, you are out, there's no wishy washy about it.

In the case of what you call a "mental" or "soft" stop, our minds are a tricky minx, at least mine is. When that price is hit, instead of getting out, you will be asking will i get out at the next tick (in this case wouldn't it be the same as a hard stop) or maybe wait for a bounce or maybe wait X number of days, or maybe wait for some news. It becomes an active process and you are not making a decision with a clearer mind before you actually have a position. It's clouded. Your exits won't be consistent, there really is little value is evaluating inconsistency and there is nothing to work or improve on.


I happen to know a magnificent trader who headed Goldman's trading desk in the 1980s. You will just get fired if you traded with no stop. Dounch know about it now.

 

[wahkao3]

Yeah, but the fact, number or logic are also not derived by you right?

you just need to be sure of yourself, right or wrong, if u feel its right, then just do it, no regret.

Dont be like me, failure in life n everything.

doesnt matter whether they are derived by me or not.

I dont feel comfortable with gut feel on the stock market.

Dont be so hard on yourself, you have your strengths too

 

[Sinkie]

doesnt matter whether they are derived by me or not.

I dont feel comfortable with gut feel on the stock market.

Dont be so hard on yourself, you have your strengths too

Nolah, if u did enough research, it won't become gut feels anymore but with ample educated decision le..

You have your strength too. When u have money, u will have confidence. You are on your way there

 

[wahkao3]

Interesting, looking at the chart, the MACD system doesn't to be an outperformer. I have attached a Moving Average Cross system (based on monochrone's idea), it seem to be better one compare to MACD.

Thanks for attaching your back test results. I do not know how to compare it. Not sure what is VAMI. Also not sure about the type of back testing and on which market. The results you posted do look really good though.

My own back test involve SGX and doing a true portfolio simulation.
My own conclusion is that MACD is crap even though its been used by so many practitioners.

In fact, I played around with RSI, ATR, different timeframe moving average and boilenger's band and a lot of other established TA. I conclude they are useless.

I used to hold TA in high regard until I done the test myself.

I am sorry for those of you who hold TA in high regard but I can confidently tell you that most of them are useless.

 

[Sinkie]

Thanks for attaching your back test results. I do not know how to compare it. Not sure what is VAMI. Also not sure about the type of back testing and on which market. The results you posted do look really good though.

My own back test involve SGX and doing a true portfolio simulation.
My own conclusion is that MACD is crap even though its been used by so many practitioners.

In fact, I played around with RSI, ATR, different timeframe moving average and boilenger's band and a lot of other established TA. I conclude they are useless.

I used to hold TA in high regard until I done the test myself.

I am sorry for those of you who hold TA in high regard but I can confidently tell you that most of them are useless.

Thank you for supporting me..

That is why I don't use TA indicators at all in all my charts. Just pure price/action + news..

 

[wahkao3]

wahkao3

I really like the way you think about risk although it seems noone is. Other than risk, if one places a stop based on logic, it just tells you you are just dead wrong. If one does the value investment thingie, isn't there a price you are willing to call it "junk" if it trades below your "value"?

I dun quite understand this question. Dunno how to respond.

You mentioned
"As long as the broker cut loss within my parameters, I have 100% no regret even if the stock go up 200% after my cut."
Of course if it really happens i think most human beings will have some regret. You are really on another level if you can put it behind you after some fleeting emotions. It's fool's gold, it's not yours to keep. You basically just got washed out of the market.

Yes u are right. That's how I think. Its fool's gold, not mine to keep.

"Correct me if I am wrong, I believe the main reason why they (or any other BB) dont cut loss because they cant! They hold too much volume in the counter that any cut loss they do will probably drive prices down to the toilet!"
You are right. That will happen, a margin call. That's what happened in gold. Someone just puked a lot.

"I cannot picture myself doing that without going through any emotions. Maybe you can because you are seasoned. I cannot"

I am with you on this one.
Putting a initial stoploss in the market is a one time thing. After you put it in, it's "passive" (not on SGX though through standchart, what a pain in the *ss)
It gets hit, you are out, there's no wishy washy about it.

In the case of what you call a "mental" or "soft" stop, our minds are a tricky minx, at least mine is. When that price is hit, instead of getting out, you will be asking will i get out at the next tick (in this case wouldn't it be the same as a hard stop) or maybe wait for a bounce or maybe wait X number of days, or maybe wait for some news. It becomes an active process and you are not making a decision with a clearer mind before you actually have a position. It's clouded. Your exits won't be consistent, there really is little value is evaluating inconsistency and there is nothing to work or improve on.

Absolutely agree.

I happen to know a magnificent trader who headed Goldman's trading desk in the 1980s. You will just get fired if you traded with no stop. Dounch know about it now.

Oh that's interesting. I think that's a good rule to have on the trading desk. If I lead any trading desk, I will force my guys to put a stop and fire them if they dont. Because it is mathematically proven that stops MUST be there.

I verified this mathematically and through my back tests.

 

[wahkao3]

Nolah, if u did enough research, it won't become gut feels anymore but with ample educated decision le..

No matter how educated also cannot predict future. The closest you could do is to identify the probabilities and plan ahead for them.

You have your strength too. When u have money, u will have confidence. You are on your way there

1 thing about confidence, is there exists false confidence.
A person might have a series of wining trades using method A. The person builds confidence.

What that person does not know is that method A actually exposes him to an eventual big loss that wipes out all his gain.
I personally experience this with real money before and because of that, I devoted myself to test the method first.

Check out this chart.

At least after you done the simulations, you are more informed and know that method A has weaknesses and abandon it

 

[stocklah]

Thanks for attaching your back test results. I do not know how to compare it. Not sure what is VAMI. Also not sure about the type of back testing and on which market. The results you posted do look really good though.

My own back test involve SGX and doing a true portfolio simulation.
My own conclusion is that MACD is crap even though its been used by so many practitioners.

In fact, I played around with RSI, ATR, different timeframe moving average and boilenger's band and a lot of other established TA. I conclude they are useless.

I used to hold TA in high regard until I done the test myself.

I am sorry for those of you who hold TA in high regard but I can confidently tell you that most of them are useless.

VAMI a kind of performance measurement. basically it means u start with an account $1000, and the compounding returns in $ trading the strategy. In the above scenario, u get a compounding returns of about $6000, which mean a returns of 500%. I have included 0.2% commissions for each traded side.

Hmm, i have also done backtest most of the common used indicators, with permutational parameters, on 200+ SG tradable stocks. My conclusions differ from you.

Of course, no point debating on this matter. Coz no matter black or white cat, the cat who catch the mouse is the good cat.

 

[wahkao3]

Thank you for supporting me..

That is why I don't use TA indicators at all in all my charts. Just pure price/action + news..

that's 1 way to do it.
This will probably not work for me

 

[Sinkie]

No matter how educated also cannot predict future. The closest you could do is to identify the probabilities and plan ahead for them.




1 thing about confidence, is there exists false confidence.
A person might have a series of wining trades using method A. The person builds confidence.

What that person does not know is that method A actually exposes him to an eventual big loss that wipes out all his gain.
I personally experience this with real money before and because of that, I devoted myself to test the method first.

Check out this chart.

At least after you done the simulations, you are more informed and know that method A has weaknesses and abandon it

Nobody can confirm the future but only use probabilities to stand a higher chance and that's why we cut loss when we trade

 

[wahkao3]

VAMI a kind of performance measurement. basically it means u start with an account $1000, and the compounding returns in $ trading the strategy. In the above scenario, u get a compounding returns of about $6000, which mean a returns of 500%. I have included 0.2% commissions for each traded side.

Hmm, i have also done backtest most of the common used indicators, with permutational parameters, on 200+ SG tradable stocks. My conclusions differ from you.

Of course, no point debating on this matter. Coz no matter black or white cat, the cat who catch the mouse is the good cat.

By compounding means you reinvest your winnings?
for me, i removed the compounding effect for more fair apple to apple comparison over different time frame.

I also have a 15% cut loss that I will surely include in every trade.


Hmm.. I just noticed that your result is only for SGX counter
I tried restricting my simulations to SGX only, and compound profits, this is my result:

I tried doing back test on individual stocks before but a true portfolio test method would work better.
in the real world, why restrict your selection to 1 single stock? you have 950 to choose on SGX.

I also noticed you are using different MACD time frames which may explain the difference.

Looks like a very solid website you have there. You own the website?

 

[wahkao3]

Nobody can confirm the future but only use probabilities to stand a higher chance and that's why we cut loss when we trade

yep. agree on that

 

[stocklah]

By compounding means you reinvest your winnings?
for me, i removed the compounding effect for more fair apple to apple comparison over different time frame.

I also have a 15% cut loss that I will surely include in every trade.


Hmm.. I just noticed that your result is only for SGX counter
I tried restricting my simulations to SGX only, and compound profits, this is my result:

I tried doing back test on individual stocks before but a true portfolio test method would work better.
in the real world, why restrict your selection to 1 single stock? you have 950 to choose on SGX.

hmm so yr strategy isn't purely the MACD strategy u mentioned earlier, ie. it include 15% cut loss.

As mentioned, i have tested with 200+ tradable SG stocks, not just SGX alone. Out of all the counters in SGX, some of them are warrant, ADR, etc. some not many of them are actively traded, so i choose to backtest with those active counters only.

 

[stocklah]

I also noticed you are using different MACD time frames which may explain the difference.

Looks like a very solid website you have there. You own the website?

lol, u mis-read my statement, Moving Average Cross isn't MACD. Yes, i created the website.

 

[wahkao3]

hmm so yr strategy isn't purely the MACD strategy u mentioned earlier, ie. it include 15% cut loss.

As mentioned, i have tested with 200+ tradable SG stocks, not just SGX alone. Out of all the counters in SGX, some of them are warrant, ADR, etc. some not many of them are actively traded, so i choose to backtest with those active counters only.

please be careful of your basket testing method
Here's why: