What do you think of MrM's system

[peanuts]

stick around, James. This place isn't so bad once you get to know the locals. There's all kinds of cool stuff here- pictures of members, OT threads, weekly contests, "The Stock Girl", and handy-dandy little features like: posting images, emoticons, quotes from other members, OH... the different colors, wrapping functions, using avatars, and a great tool called "ignore"

Have a great day.


Once perfected, please remember to share
your artificialintelligencestockpickingsoftware

[jamiew]

In the US system the first year of grad school is spent in seminars based on material from both books and articles. Then, you get to take comprehensive exams based on your first year classes.
If you fail to pass your exams after a given amount of attempts, then you are asked to leave.

Edit:

Those across "the pond" have a more interesting system for uni, I think.

Ah yes you are talking about undergrad, I did a plain old chemistry degree for that, no idea what text to refer you to though... once again Atkins?

courses are separated into modules, so different text for each model... and it was also long ago, I think it probably is the same system if we are talking about undergrad.

-any way, Im going to stop talking about me, even im getting tired of it.

[diogenes]

Ah yes you are talking about undergrad, I did a plain old chemistry degree for that, no idea what text to refer you to though... once again Atkins?

courses are separated into modules, so different text for each model... and it was also long ago, I think it probably is the same system if we are talking about undergrad.

-any way, Im going to stop talking about me, even im getting tired of it.

Oh no, this is not undergrad at all (well what I was outlining).
The above post you quoted, about the first year and such, is a rough outline of nearly every graduate program in the US.
As for the text, I think there was a bit of miscommunication as I did not ask the question about the texts or what and was just giving a few examples of well known first year graduate texts in other programs.

[skiracer]

gosh I feel like I'm going in circles. I'm not putting any thing on a plate, or suggesting any possible tips, trying to sell anything, or even giving strategies . I'm sure I would be wrong more often than right. I'm just here to find out as much as I can about Mr Ms system. I'm sure you are all vastly more experienced than me, of that I have no doubt, I am merely interested in it from an academic point of view as a direct comparison for a project I'm developing.

I think most academics fail in this area as they don't do there home work from the traders point of view, I have been studying this area for a few years, I'm interested to learn, so here I am, doing a bit of side homework.



what do you mean by this, once again, I have made no comment on anyone's strategy, only asked for comments on it?



Its A.I. not a1, and no, im a scientist, a null or a proof is good for me. results are what I need, and if Mr Ms is better, I will develop in that direction.

I'm not criticising anyone's techniques, telling them how they should or shouldn't trade, or trying to prove that one system is better than the other, merely enquiring about Mr Ms techniques and as scientist I do not have any hard earned cash, but this is the life I chose.

please go through this thread again if any of this is unclear to you. However i feel I am once again unwelcome here and since I am offering nothing in return to you, i can understand.

However thank you for those people who have given me a bit of info, it has been most helpful, I hope to return the favour

I wasn't criticising you or what you are trying to do. What I was stating is that to understand any field or subject matter better and to be able to critique it then you should have a decent working knowledge of the basics of the discipline.
How can anyone discern the positives or negatives of a concept such as Ernie's model without some degree of understanding of the premises of what constitutes it's physical makeup. You're asking for results and making a judgement based on those results without understanding the model or the strategy behind the discipline. Then you go out and try to give an explanation of it on another site without truly having a full comprehension of the topic or the basics of what compromises a trading strategy and the many facets that go into one. Have you thoroughly read Ernie's strategy and model. Do you feel that you have a good grasp on the subject matter. Could you discuss it intelligently from the little that you have with some conviction that you are presenting it correctly in the fashion that it should be presented. Are these questions out of line in the sense that you feel that I am attacking you or what you are trying to do, because that is the farthest thing from my mind. I'm really just attempting to provide you with some insight of what credentials, I feel, should be in place before anyone can try to do what you are undertaking. Especially if you are trying to present an intelligent and fully comprehensive dialogue on the subject.
Of course you could put me on ignore and continue on the course you are on which would be the easy and the typical path of smaller minds. But if you, as a scientist, really are interested in understanding a field then you have to study the field and know it inside an out before presenting anything about it to anyone else.
I would like to hear more about how you are comparing the different strategys and more on the A.1 system and how it works in comparison to other more traditional systems. My agenda here is not to screw around with you but to understand more clearly what you are trying to do and maybe provide some insight that would help you along with it.

[jamiew]

Yes I do feel you are attacking me a bit.

here is what i put on that other site:
"
I found a forum discussing a screening process:
(Mr Market)

1) First about 200 stock are picked with good growth
2) the stocks are screened on the following criteria
a) New highs with IBD EPS 90 or higher
b) Stocks within 2% of 52 week high with a 52 week appreciation > 300%
c) Stocks within 5% of 52 week high with a 52 week price appreciation > 150% and EPS growth of 25%
d) Stocks within 5% of 52 week high with a 52 week appreciation > 125% and P/E < 50
e) Stocks within 5% of their 52 week high with a 52 week price appreciation > 50% and P/E < 15
f) Stocks highlighted on IBD's "screen of the day".
g) Stocks with Investors Business Daily Ratings greater than 95 EPS and 95 RS (from the previous Friday publication weekly review).
h) Stocks with Investors Business Daily Ratings greater than 90 RS and PE less than 20 (from the previous Friday publication weekly review).

Each screen will yield about 10 – 50 stocks, combine these screens. Pick the top 100 stocks which have the highest r-squared correlation coefficient (from yahoo data analysis).

Then check the stock to see if they have 3 years of revenue growth and 3 consecutive years of earnings growth. Eliminate any stocks that do not pass this. Go down the list until you have 5 stocks.

However further screening these stocks requires membership to certain data analysis a full description can be found here: http://members.aol.com/ebarsamian

At the time of quoting this site, the trader boasts 82 CONSECUTIVE profitable trades. From the data he has show on his site, the annual % works out to be 205% (if trades were consecutive)

I couldn’t actually find anyone that went out and used this system, however everyone on his forum seemed to uses his advice impartially and also used methods of there own.

It is yet unknown if this system is a hoax, or has great potential. I guess the only way to find out is to try it out, membership to anything is not necessary to get the good top 5 picks. If anyone has any feed back or uses a similar system to this let me know."

This is hopefully in no way negative or positive just an out line of his system, i try not to give my own opinion of it, but ask others who have used a similar technique to let me know.

The only way you can understand a mode such as Ernie's model is to actually practice and test it, such as i have already said i will do earlier in this post. Not only do i hope to do that, but to set it up in a program so this system will be automatic.

You do how ever make me laugh with this comment:

"Could you discuss it intelligently from the little that you have with some conviction that you are presenting it correctly in the fashion that it should be presented."

Its a filtering process, I’m sure my brain will never be able to process such a larger area of techniques that go into a filtering system????

Why attack me??? and why try to make your langue more complex than it actually is in a hope to conceal what it is you are saying? It doesn’t look particularly cleaver or big. Are you hoping to win an argument, because I have no intention of an argument? However, if you like, and intend on trying to making me look foolish then I shall intend to so the same. This is not my intention and I ask you would you please refrain from attacking me.

[skiracer]

If asking questions and creating honest dialogue makes you feel unwelcome then you might have a hard go at it here but that really isn't the case with me or anyone else here. I really don't feel that I came anywhere near approaching unwelcomeness. Anyway just wanted to clear that up first.
Regarding disciplines and strategys. Here is a very simple one that works for me an I'm sure a great number of others. It's so simple in it's basic premise that it is almost unbelievable that it's so hard for most to practice and control.
First you have to find specific setups, either fundamentally or technically or some combination of both, that over time have proven to workout in the fashion that you feel they will. That takes a mastering of fundmental research an understanding what makes a company make money and how to tell that those fundamentals will prove to be right. Or a knowledgable base of technical analysis and chart reading ability to understand what the chart is telling you at any given moment. This takes time and effort but is simple if you apply yourself.
Second you have to be able to know explicitly that those setups are right and that the edge is in your favor from some point in the stocks cycle. This edge is the risk you are willing to take versus the money you are expecting to make. The higher degree the reward is in your favor versus the risk that you are putting up to gain that reward is the edge. The higher % the edge is in your favor the greater the chance of your winning the game. Simple but the presence of mind and emotional control to set an honor entry points makes this seemingly simple task remarkably hard to do. Knowing when to let a setup go after missing your entry is much harder to do than not as it is human nature to want to chase something that you think is going to be a winner and don't want to miss out on as opposed to letting it go and looking for the next one amongst thousands of others.
Third would be knowing what you want to make on the position and to have enough control to give the play room to breathe and when an if it does go the way you expected it to go to be able to take your profits and honor your original target exiting with your gains and not looking back thinking that you could have made more. This is as hard to do as any of the preceding points because human nature dictates greed and greed dictates foolishness even when the trade turned out to be a winner.
Fourth is knowing how and where to set your stop losses and to be able to live within those parameters and to have the emotional control to exit a position when it violates your stop loss regardless of what you think or believe the stock will do once you exit the play. This takes more control than most traders have or ever will have. It's the primary difference between winning and losing capital over the long haul.
Fifth is money management. You have to develope some plan regarding the percentage of capital you will put into play in each setup and stick to it. Again all it takes is emotional control and thought. Simple but the larger percentage of traders never manage to get a grip on this point.
Bundle all of these into one package with emotional control an I think you could win with any system that was developed in a thoughful manner. It's sticking to the plan that separates the wheat from the chaff. How about if I said that I have been consistently above 25/30 % in my trading every year over the last 10 years and that's probably looking at the low side. And this is exactly how I did it. Personally my feelings are that it is not the system as much as the thought out developed plan and the emotional control over the plan that makes you a winner. Sticking to the plan, regardless of what the plan is, is what makes the winners.

[jamiew]

Sticking to a plan is important, to find out if your plan really works.

25/30 % is okay, but not really comparible to Mr M's system

You've said quite a lot but not really said that much

I’ll try to be explicit and give you an example of a technique that many traders use, I’m sure you’ve come across it before, and may even use it:

By far the simplest : moving averages (swing trading)

If both the 50 day moving average is changing direction to positive gradient and the 20 day moving has a positive gradient, and both the 50DMA and 20DMA have recently crossed this is considered a good time to buy long, an example:

http://www.tradersedgeindia.com/images/movavg.gif

Although not a great example.

On top of this volumes should be noticed for obvious reasons of supply and demand, a large increase in volume indicates a large demand.

On top of this Volatility should be watched, if the stock is to volatile, it is too unpredictable

On top of this Rick Shaw a dangerous affect that could go either way and stop you out at a bad position

On top of this Dramatic increase affect when shares have had a large scale influx in hardly any time its due to large size stock holders manipulating the price. They can manipulate it any way at any time to your disadvantage

etc

[diogenes]

Guys-

I think you are talking past each other.

[jamiew]

Hmm possibly, probably lots of crossed wires too

[skiracer]

I wasn't looking for an arguement or trying to instigate anything negative. Just trying to validate how much you know about any of this an if your really open minded to a discussion about trading disciplines. You've answered my question. And why would anyone, especially a scientist with a PHd, put up an example, although not a great one, in the first place that doesn't do justice to support thier proposition. On the whole you've missed the point I was illustrating by a wide margin and the simple thread of the discussion.

[jiesen]

probably a situation best solved with a phone call. posting your thoughts will often lead to missed/crossed signals, and I'm sure you two would end up best friends after a 10 min phone conversation.

might I suggest you two exchange numbers before you wear your keyboards out?

[jamiew]

Good I’m glad were not arguing

And why would anyone, especially a scientist with a PhD, put up an example, although not a great one, in the first place that doesn't do justice to support their proposition.

Ah ha, that is exactly where academics fail, they don’t know enough about real trading. (Oh and i don’t have a PhD. yet. Im in my final year.)

Actually, how do you know what my proposition is? What if I told you Neural networks can be used in combination with trading techniques

Research is all about having an open mind, so yes I’m am very open to all trading systems (which is more than i can say for most academics),
this is were i hope to win where others have failed.

So i don’t really see why I am not doing justice to support my proposition???

I need to get some sleep now anyway, its 02:12 here in the UK. cu

[Lyehopper]

probably a situation best solved with a phone call. posting your thoughts will often lead to missed/crossed signals, and I'm sure you two would end up best friends after a 10 min phone conversation.

might I suggest you two exchange numbers before you wear your keyboards out?

LOL!.... Ski and Jamie, I think you two are both talking right through each other here. Reminds me of trying to communicate with Mrs Lyehopper.... And her me.

I've never witnessed an educated Limey and a crusty N.J. Yankee trying to understand each other before.LOL!.... The only thing better would be to lock you two in a room with a half gallon of "The GoJi" and see what happens..... SsSsSsSssssss!.... No offense fellas!

[IIC]

Geez...I'm way behind on answering emails and catching up on Forums since I was outta town last week...So I just breezed through this thread...But I'm gonna tell 'ya...There is no magic system...There is no Sure-Fire system...You have to be flexible...You have to adapt to the markets...No regimented...STRICT...parameters work all the time...You need to get to the point where you can just look at a chart...Look at the Fundies...And believe it is right...Sure...You'll still be wrong 35% of the time...But if you can't make money being right 65% of the time then you should give it up...In fact...If you manage your money right you should do well only being right 35-40% of the time...Doug(IIC)

[Karel]

Hi Jamie

... At the time of quoting this site, the trader boasts 82 CONSECUTIVE profitable trades. From the data he has show on his site, the annual % works out to be 205% (if trades were consecutive) ...

205% is a nice number, but unrealistically high. It appears you took a normal average of the annualized results, which you can't do for returns. You have to take a geometrical average, by first normalizing the gains (+50% becomes 1.5, etc.), then you multiply all those results, take the (number of returns)th root from the result, and denormalize again. My result is 137%.

The second hair in the pudding is that starting the calculations with the annualized results may not be the best thing to do. To witness: when you average the results per stock and the holding period per stock, and annualize the averages, you get 50% annualized. I think we are approaching more realistic, if still inflated results here.

The third problem for the calculation is in the open positions. For reasons of caution, I always include them in my own calculations. My motto is, "let's trust it doesn't get any worse than this".

And my extremely cautious implementation of Followin MM is here, numbers and all: http://www.mrmarketishuge.com/showthread.php?t=455

Regards,

Karel