Goomboo's Journal

[jeppe]

Thanks for posting this Its an interesting read and informative. This is the perfect Guide for newcomers and will definitely help a lot of people (including me)!! Keep up the updates   

[Goomboo]

this seems really useful. the region at the top is obviously the largest/greenest (probably the most robust compared to the other regions).

- but what makes it robust?
- what if the largest region was a single square?

I define it as robust in that as the market changes through time, the region will more or less continue to outperform.  The primary assumption here is that the market price action characteristics will remain similar through time.

A region has to be a grouping of squares or it is not a region.  If you're looking at a single green square in a sea of red, you're looking at a system which happened to catch a single large price movement at the perfect time - which the neighboring cells did not catch.  By choosing this square, you would be "cherry-picking" a combination based upon a single trade which will never occur again.

You're looking for a profitable system which captures the general characteristics of the market.  Specific enough to give direction; vague enough to avoid curve-fitting.

[Goomboo]

do you have a performance report for your method?  like last 6 months or year?

A few pages back I have a performance report from August or September.  Compound it by a few hundred percent and that's the current (unrealized) performance.

[xybersurfer]

this seems really useful. the region at the top is obviously the largest/greenest (probably the most robust compared to the other regions).

- but what makes it robust?
- what if the largest region was a single square?

A region has to be a grouping of squares or it is not a region.  If you're looking at a single green square in a sea of red, you're looking at a system which happened to catch a single large price movement at the perfect time - which the neighboring cells did not catch.  By choosing this square, you would be "cherry-picking" a combination based upon a single trade which will never occur again.

You're looking for a profitable system which captures the general characteristics of the market.  Specific enough to give direction; vague enough to avoid curve-fitting.

thanks for the reply.

the general idea seems to make sense. but, the issue for me is in considering a green square in a sea of red...

if you:
- use a smaller scale (ex: hours instead of days)
- or exclude the points where the red region occurs
you can make the region really big (a scaling problem).

You're looking for a profitable system which captures the general characteristics of the market.  Specific enough to give direction; vague enough to avoid curve-fitting.

i assume you mean something like finding a formula for part of a line. i can see that being dangerous
- but would this include sine waves?

greetings

[bigb159]

Thanks for sharing your accumulated wisdom - now to absorb all of this.

[mvidetto]

Quick question do any traders trade inflection points on EMA's?  BC although this is a good strategy it should be used in CONJUNCTION with others to have it trade correctly a higher percentage of the time.  I.E. we have 10/21 EMA lines when the slope of the 10 day EMA line becomes 0 after a bull run, it will either rise or fall.  I've looked at a substantial amount of bitcoin data and it seems that making a sell at this point, and a buy at a time inverse to this could prove to be more effective than when they cross.  The other option is to wait for the slope to reach a certain point after an inflection to make a more informed decision of where the price is headed.  Of course, this trade should only be made after due diligence of the trader, but can easily make money off of small changes in price from drops 2-5%, or give the trader a quick sell before a possible huge crash.

[GBattaglia]

I have a question regarding the EMA parameter setup.  What is the '10' and '21' exactly?  I understand the whole crossover method, but I don't understand what exactly is being graphed.  Any answers would be greatly appreciated.  Thanks in advance.

[Goomboo]

I have a question regarding the EMA parameter setup.  What is the '10' and '21' exactly?  I understand the whole crossover method, but I don't understand what exactly is being graphed.  Any answers would be greatly appreciated.  Thanks in advance.

The '10' is basically an average of the closing price of the last 10 trading days.  Since it's an exponential moving average, the formula isn't a straight average.

More info:

http://stockcharts.com/help/doku.php?id=chart_school:technical_indicators:moving_averages
http://en.wikipedia.org/wiki/Moving_average

[Goomboo]

And correct, there was another buy signal generated a few days ago.

Daily traders should be sitting on an unrealized profit of around 51% or $70 per coin.  As always: be skeptical of unrealized profits.

Unrealized profit ~ 426% or $589 per coin.  Stay disciplined and stick with a tested plan.

[TheUniporn]

Is there a free program that makes a sound of any kind when the EMA lines cross because I keep missing it? Thank you!

[xybersurfer]

Is there a free program that makes a sound of any kind when the EMA lines cross because I keep missing it? Thank you!

i think you would probably want to react at a fixed time of day. daily EMA's are normally based on the closing prices of exchanges. so i think that if there is an exact time to react, it is then.

if you try to use whatever time it is at a certain moment as the closing price,
 then whether a crossover happened, would keep changing from one second to the next (not stable)

[GBattaglia]

I have a question regarding the EMA parameter setup.  What is the '10' and '21' exactly?  I understand the whole crossover method, but I don't understand what exactly is being graphed.  Any answers would be greatly appreciated.  Thanks in advance.

The '10' is basically an average of the closing price of the last 10 trading days.  Since it's an exponential moving average, the formula isn't a straight average.

More info:

http://stockcharts.com/help/doku.php?id=chart_school:technical_indicators:moving_averages
http://en.wikipedia.org/wiki/Moving_average

Thanks! 

[madpoet]

Goomboo thanks for this thread. Question since I haven't read through all of this where do you trade?  Haven't found a good place I trust yet

[mom1963]

I sold around 820 when the lines crossed - but now they've crossed again but it didn't crash enough - don't want to buy in the 800's...just wondering - are you still following this method?
did you sell at 825ish and are you now buying back in?

[xorred]

I bought the bot...  and it buys high, so far - I had 10.5 btc, now I have 9.6 BTC - that's 700 usd loss.

Plus -  a question - does my computer need to run all the time (with chrome running) for the bot to work, or is it in the Cloud?

[pixl8tr]

Not to seem harsh, but why would you trust that much money to a bot you dont know how to work? 

[Qoheleth]

I sold around 820 when the lines crossed - but now they've crossed again but it didn't crash enough - don't want to buy in the 800's...just wondering - are you still following this method?
did you sell at 825ish and are you now buying back in?

In a rigorous system, such trades happen sometimes. If you look at the backtesting data, in fact, it happens pretty frequently... but the system still makes money, even including those rough patches.

So you can be reasonably confident that even if you buy back in in the 800s, you'll still make money in the long run.

Now, if you want to start second-guessing the system, you don't have that guarantee anymore. There's no way to tell whether your improvised method is going to make money in the long run, because you can't add gut reactions like "don't want to buy in the 800's" to the model.

This is why discipline is so important when you're trading on a backtested system.

[sukiho]

Quick question do any traders trade inflection points on EMA's?  BC although this is a good strategy it should be used in CONJUNCTION with others to have it trade correctly a higher percentage of the time.  I.E. we have 10/21 EMA lines when the slope of the 10 day EMA line becomes 0 after a bull run, it will either rise or fall.  I've looked at a substantial amount of bitcoin data and it seems that making a sell at this point, and a buy at a time inverse to this could prove to be more effective than when they cross.  The other option is to wait for the slope to reach a certain point after an inflection to make a more informed decision of where the price is headed.  Of course, this trade should only be made after due diligence of the trader, but can easily make money off of small changes in price from drops 2-5%, or give the trader a quick sell before a possible huge crash.

I wonder about this to. I have never seen it tested but I suspect a crossover is just easier to implement and perhaps gives the same results

[xybersurfer]

Quick question do any traders trade inflection points on EMA's?  BC although this is a good strategy it should be used in CONJUNCTION with others to have it trade correctly a higher percentage of the time.  I.E. we have 10/21 EMA lines when the slope of the 10 day EMA line becomes 0 after a bull run, it will either rise or fall.  I've looked at a substantial amount of bitcoin data and it seems that making a sell at this point, and a buy at a time inverse to this could prove to be more effective than when they cross.  The other option is to wait for the slope to reach a certain point after an inflection to make a more informed decision of where the price is headed.  Of course, this trade should only be made after due diligence of the trader, but can easily make money off of small changes in price from drops 2-5%, or give the trader a quick sell before a possible huge crash.

I wonder about this to. I have never seen it tested but I suspect a crossover is just easier to implement and perhaps gives the same results

a slope that is exactly 0 is of course unlikely but you could sell on a slope of zero or less.

problem is that a lot of times the 10 day EMA oscillates a bit while going upwards without touching the 21 day EMA. if you sold during such a short downward movement, then you would have to wait for another crossover to buy back in (eventhough the 10 day EMA did not stop moving upwards overall)

[Bitbuy]

Hello Goomboo;

Thanks for all this info! Instead of asking that you lurk around for 4 hours and make 5 posts when you join this forum; they should make reading your thread mandatory! I'm slowly going through all the pages of this topic, both recent and past. Letting it all sink in 

Thanks again and keep it comin'!