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Adding a discretionary filter

Discussion in 'Trading Strategies/Systems' started by Gringotts Bank, Jul 5, 2019.

  1. Gringotts Bank

    Gringotts Bank

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    I've devised a discretionary filter which is fairly easy to apply if anyone else wants to try this also. I don't trade it alone - this is a filter applied to stocks already filtered by a system which has an acceptable WR (>60% in an MR system). The aim is to lift the WR as high as possible in short term trades (buy EOD, sell tomorrow).

    It uses a binary YES/NO answer to two simple questions. 1] am I in the right frame of mind to win on this trade signal? 2] is this stock going up tomorrow? And it is based upon this research: https://www.ncbi.nlm.nih.gov/pubmed/10407911

    The research requires you to have some way of objectively measuring muscle strength. I'm going to use a dynamometer for that. There's no way of backtesting, so it will need some record keeping. I'm hoping not to get too many false negatives and false positives because that will be hard to analyze retrospectively. I have a plan for a NO to question 1], but that's a bigger task.

    It's an approach inspired by Steenbarger's biofeedback articles and some of Malcolm Gladwell's work on 'thin slicing' and intuition.
     
    Last edited: Jul 5, 2019
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  2. Joules MM1

    Joules MM1 ....everything has an art

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    an "Am I kidding myself?" filter

    "well that's interesting" filter applied to the thread ....let us know how you go....
     
  3. Gringotts Bank

    Gringotts Bank

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    The idea is to train the mind to automatically recognize what a YES or NO feels like as a somatic sensation, and then to have that happening without the need for muscle testing.
     
    Last edited: Jul 5, 2019
  4. Gringotts Bank

    Gringotts Bank

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    Order effect will be countered by first getting a baseline "% drop in hold time of second versus first hold", standardizing that measurement, then applying the findings of the research which showed a difference of "59% average difference for TRUE/FALSE statements".

    Because it's objective, there will be no guessing involved. Just a case of taking the measurements and observing any changes in WR and net profit. Cancel the gym membership.
     
    Last edited: Jul 5, 2019
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  5. investtrader

    investtrader

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    Love it ... so out there it will probably work :laugh:
     
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  6. Gringotts Bank

    Gringotts Bank

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    Thanks.

    I'm doubting the quality of the research because despite a fair bit of effort, I can't replicate their findings in my own experience. Either that, or the blinding of participants was the critical factor. The life of a trader - test/discard/test/discard/test...

    The issue is that there are powerful price-influencing factors which cannot be coded. A simple example would be a speccy stock which has a CR looming. Also, share holders who have been in a stock for a long time will get a very good feel for when sentiment changes and you can really feel that quite strongly when you read their posts. Some stock threads can just light up and draw a lot of positive attention out of the blue, even when the SP is motionless. This is what I'm aiming to quantify. Not easy.

    We don't need to access huge amounts of information to get a feel for sentiment. This is the idea behind 'thin slicing'. The trick is to find the right slice, a bit like that guy in Moneyball, who transformed the Oakland A's into a massive success. That was a true story.

    https://en.wikipedia.org/wiki/Moneyball
     
    Last edited: Jul 7, 2019
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  7. Gringotts Bank

    Gringotts Bank

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    I found what I wanted, though it's a complete departure from where the thread started.

    There is a 'thin slice' in the threads, and if you want to find it yourself (an objectifiable discretionary filter), read through the posts of HC or ASF for your stock of interest. Look for a phrase that gets repeated commonly. Or watch the movie Moneyball and get a feel for how Billy Beane went about finding his 'thin slice'.
     
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