RE: [CANSLIM] Another mystery plunge

From: "David Taggart" <dctag@mavericktrading.com>
Subject: RE: [CANSLIM] Another mystery plunge
Date: Fri, 25 Jul 2003 11:12:36 -0600

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Hello,

I will let Katherine answer the Breakoutwatch part.  As for black boxes and
business schools I dont agree that fully automated trading systems dont
work.  I know of more then a few that have been doing the same thing for
several years now and are consistently profitable.  There are some funds
that have amazing track records that use automated trading systems and have
used them for years.  LTCMs' problems were not their models but their crappy
trading. They were way overleveraged and traded in too thin of markets but
the models were and are very useful.  They are still being used by
Merriwether in his new fund but this time he is using a lot less leverage
and not trading in the thin markets.  Business schools teach a lot of useful
concepts but they also teach a lot of jibberish.  EMH is just one example.
If they are right then we cant beat the market so why even bother just buy
an index fund or the SPYders and be the market.  Options are a losing game
is another thing most teachers try to preach.  My answer to that is that any
game can be a losing game but if you know what you are doing you can be a
winner.  Thats enough ranting for now.  Suffice it to say I trade and know
people who trade systems and do very well.

Happy Trading,
David Taggart

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of DMC197807
Sent: Friday, July 25, 2003 10:30 AM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Another mystery plunge


Hong,

I'm not familiar with breakoutwatch.com's service (although I did just visit
their site).  It looks pretty pricey for something you can probably program
pretty well with TC2K and a subscription to IBD.  $900 per year for the
"platinum" service?

In general I don't think black boxes or canned trading systems work.  What
works is careful screening, careful analysis, disciplined trading and
disciplined money and position management.  Of  these four, the most
important are the latter two.

Academics (business schools) like to point out that no TA system has been
successfully backtested to perform over lengthy periods of time.  True
enough, because it is impossible to put in enough general market and proof
of trend indicators to reach a "scientific answer."  Further proof of
failure of black box systems was the LTCM debacle.  Also, as Steve Nison
likes to point out in analyzing candlesticks, unless you can define the
trend, you don't have a candlestick.

The big question here, the first question, is what is the condition of the
market.

Finally, as for the CET thing on OSTE, with a rating of 6.8 out of 7.0 and a
big plunge, what does that tell you about the infallibility of their rating
system?

DMC


- ----- Original Message -----
From: "Hong Hsu" <honghsu@bellatlantic.net>
To: <canslim@lists.xmission.com>
Sent: Friday, July 25, 2003 9:12 AM
Subject: Re: [CANSLIM] Another mystery plunge


>      DMC,
>
>     For OSTE, the total TA score  (CET) from breakoutwatch.com is 6.8
> out of 7.  With that score I will tend to believe it has solid TA.  Does
> it?   Maybe Katherine could share her insight.
>
>     -Hong
>
>
>
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