Forum Archive Index - January 2004

["Woody" <solarmax@optusnet.com.au>]

Systems: Well if you are like me and you go outside and look at the Sun and all the planets revolving around it, and you see the mathmatical perfection there, you watch the tide and stand in awe at the belief that all we do and see occur in a universe with a purpose, then agree with the two great Mathamaticians,Faraday.  With. " There is nothing in the universe but mathmatical points of force" and Einstein " There is noting Random about the universe.

THEN: A system must rely on mathamatical formulae. So one must be able to backtest Years of Historical data to find and then to perfect a System to a particular stock, commodity, etc.  However having done so for many years and having found a system for a particular entity, only to have after several months the system begin to fail I started to lose faith. Did my system fail me or did my faith fail me. I later discovered that it was neither. The Market is like everything in the universe, it runs in cycles. You design a System it runs great during that cycle of that entity, however when the cycle finishes you must be able to recognise that and move on.

    There are and have been many great traders, and like all else in this world there are those that believe that the markets run mathamatically and those that believe they are random.

When they stop publishing tide times and heights in advance, when man can no longer predict where the planets will be 1000's of years from now and when the birth of a child ceases to be almost exactly 9 months from conception then and only then shall I entertain the thought of a Random universe.

There is a System for every market but also every market has many cycles. Therefore you must design a system for every cycle in every market. A mammoth task but those that do so are well rewarded and are also so few as the majority of traders lose faith and patience. WD Gann was one of the few, so was Gartley, Bayer and these days Larry Williams.

 

Woody

p.s.   I use the Old program SuperCharts it is great as I can program it from scratch.