I think some people become confused when they see the false
alerts such as the recent BPGDM GDX SYSTEM buy ( 11/9/12) and it
turns out that was the perfect time to SHORT IT. ( due
to the negative macd divergence)
Another one was the BPT EMA RSI 2 SYSTEM BUY ALERT (11/8/12)
which again, was the perfect time to initiate a **SHORT** due to
the NEGATIVE MACD DIVERGENCE that was in place.
I was wondering what the hell was going on myself.
Roger, first off the BPT EMA RSI 2 system never went long (which
ended up being a good thing) because price closed below the long
term MA. I thought I was clear about that. Yes the
system looking to buy the pullback but once price fell below the
long term MA, that was quite bearish for the market and the market
has fallen quite hard.
BPGDM is based on 29 gold/silver stocks plotted as point and
figure charts, that is converted into an average 0 - 100% based on
the number that are on P&F buy signals. Since it's a
system based on an average of all these stocks, a few large
components can overly affect it at times.
You guys are over thinking this, a system is a system and these
systems especially are not complicated nor are they perfect, they
don't have a brain and they can't look at the market or a chart and
decide if their signal is good or not. I provide these for
information and show them for as they are, vs saying if I agree
with the signal or not. none of those systems above are grail
free lunch systems, it's been pretty clearly stated that about what
their faults and benefits are.
For systems like the XLE/BPENER system which isn't out yet, I
have tried to incorporate a lot more reaction to the market and
signals that make sense, my hope is that this system gives signals
that make sense most of the time - but we'll see....
one problem I have with systems is too many people use them like
a crutch, get overly emotional with them.
But hey isn't that what makes TA work? all the emotion -
which ends up showing up in the charts and we read all that by TA
trendlines, patterns etc
I think everyone is one edge right now and are just trying to
get on the right side of the trade. And intuitively, with all
the bad news right now, you don't have to be a nostradamus to
imagine a big down move, especially with the daily technicals in a
downtrend and the weekly showing negative macd
divergence.
Also, as Steve noted, the weekly MACD is not only showing
divergence, but it is crosssed down right now. That aint
gonna budge very easily. Imagine tring to turn a cruise ship
on a dime.
I think it all comes down to emotion, after the market has had a
big move, traders who may have not participated in the move as much
as they would have liked look for things to blame on such as a
system or analysis etc - To me it's all just emotion and again
remember Technical Analysis is basically the art/science of
analyzing the mass psychology of the market (greed and fear), which
manifests itself in trendlines, patterns, and statistics - as
Technical analysts, let's try not to fall prey to the emotion that
we are trying to analyze with our TA, learn from the past, move on
and do better, that's we can do as traders, as individuals, too
much focus on woulda, coulda, shoulda, is destructive.
and look - if it's a new bear market, there will be PLENTY of
huge oversold rallies, lots of volatility, and plenty of time to
catch the next trades - if that's your goal as a trader, set your
goal as a trader. Is your goal to trade the market indexes?
or is it something else? I know plenty of traders who
don't give a shit about the market or trade the indexes and make
good money, one guy I know, all he does is trade stock setups,
obvioulsy what the market is doing can affect his setups, but he
doesn't trade the stock indexes or ETF's or futures, just stock
setups and mostly Longs at that and not shorts, he simply focuses
on stocks taking huge volume and reads level 2 very effectively.
Some other trader friends of mine come in each day and trade
crude oil for 4 hrs a day, the only time they look at the market is
to know when certain news is coming out that might affect crude
(for example they stop trading crude oil 5 min before Crude
Inventory News comes out, and 5 - 10 min after.
Therefore decide what your goals are and what kind of trader you
are and work on them
also, the longer you have traded, the more those Rules that I
posted as a Sticky above will make sense to you.
i agree with you roger,about being on edge, i find one of
the best things to do is to go back and look at the last few major
tops (or a lot more). firstly it is good to know how tops and
bottoms are formed as after all the basic tenet of TA is that
history repeats but also it puts a bit of perspective on where we
are NOW in comparison, which is still very close to the top, if it
is a TOP, and as matt said, if it is there are plenty more
opportunities to come, for another 6 months at a minimum imho.
lastly and then I've got to go otherwise my wife will kill me as
she's been waiting on me to go to the store with her while I type
all this stuff on the blog
BPT's style has always been to present all sorts of information
like a smorgasbord for traders of all styles to pick and
choose from (or like a newspaper or magazine, you never read all
the articles in a magazine or paper, you flip to the sections you
like, same here) vs us telling you what to do.
I've given some systems here and there but quite honestly
they've burned us more than help because people over rely on
them.
The futures room that we are talking about bringing here would
be laser focused and we would call out exact trades for you to take
- so obviously it would fulfill the goal of some here who want to
be told, however our system would also be taught as well
And remember Steve and I are two guys who work hard, we are far
far from perfect, we will miss things and setups, but we constantly
strive to improve and get better, it's all that we can do.
kc- not really
sure I understand your comment about MACD, Yes RSI is a
priced based indicator, so is a MACD, so are you saying all systems
with any price based indicator should be based solely on MACD?
What makes the MACD a better indicator than any other priced
based indicator?
MACD is a fine indicator, RSI is a fine indicator, but like any
indicator it has it's problems and lags - I've show unique ways to
use the MACD such as via using a whipsaw filter to make it a MUCH
better trending indicator, but that doesn't mean it's better than
anything else like RSI etc. All these indicators are of
course based on price. another type of indicator would be
based on volume and would differ from these price based indicators
- but again no one indicator can work for a system, it takes a
combination of things, and even then, 99.9999% of systems all have
their limitations and failures
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just an observation
Posted by roger on 15th of Nov 2012 at 04:40 pm
I think some people become confused when they see the false alerts such as the recent BPGDM GDX SYSTEM buy ( 11/9/12) and it turns out that was the perfect time to SHORT IT. ( due to the negative macd divergence)
Another one was the BPT EMA RSI 2 SYSTEM BUY ALERT (11/8/12) which again, was the perfect time to initiate a **SHORT** due to the NEGATIVE MACD DIVERGENCE that was in place.
I was wondering what the hell was going on myself.
Roger, first off the BPT
Posted by matt on 15th of Nov 2012 at 08:38 pm
Roger, first off the BPT EMA RSI 2 system never went long (which ended up being a good thing) because price closed below the long term MA. I thought I was clear about that. Yes the system looking to buy the pullback but once price fell below the long term MA, that was quite bearish for the market and the market has fallen quite hard.
BPGDM is based on 29 gold/silver stocks plotted as point and figure charts, that is converted into an average 0 - 100% based on the number that are on P&F buy signals. Since it's a system based on an average of all these stocks, a few large components can overly affect it at times.
You guys are over thinking this, a system is a system and these systems especially are not complicated nor are they perfect, they don't have a brain and they can't look at the market or a chart and decide if their signal is good or not. I provide these for information and show them for as they are, vs saying if I agree with the signal or not. none of those systems above are grail free lunch systems, it's been pretty clearly stated that about what their faults and benefits are.
For systems like the XLE/BPENER system which isn't out yet, I have tried to incorporate a lot more reaction to the market and signals that make sense, my hope is that this system gives signals that make sense most of the time - but we'll see....
one problem I have with systems is too many people use them like a crutch, get overly emotional with them.
But hey isn't that what makes TA work? all the emotion - which ends up showing up in the charts and we read all that by TA trendlines, patterns etc
on edge
Posted by roger on 15th of Nov 2012 at 08:49 pm
I think everyone is one edge right now and are just trying to get on the right side of the trade. And intuitively, with all the bad news right now, you don't have to be a nostradamus to imagine a big down move, especially with the daily technicals in a downtrend and the weekly showing negative macd divergence.
Also, as Steve noted, the weekly MACD is not only showing divergence, but it is crosssed down right now. That aint gonna budge very easily. Imagine tring to turn a cruise ship on a dime.
I think it all comes
Posted by matt on 15th of Nov 2012 at 08:59 pm
I think it all comes down to emotion, after the market has had a big move, traders who may have not participated in the move as much as they would have liked look for things to blame on such as a system or analysis etc - To me it's all just emotion and again remember Technical Analysis is basically the art/science of analyzing the mass psychology of the market (greed and fear), which manifests itself in trendlines, patterns, and statistics - as Technical analysts, let's try not to fall prey to the emotion that we are trying to analyze with our TA, learn from the past, move on and do better, that's we can do as traders, as individuals, too much focus on woulda, coulda, shoulda, is destructive.
and look - if it's a new bear market, there will be PLENTY of huge oversold rallies, lots of volatility, and plenty of time to catch the next trades - if that's your goal as a trader, set your goal as a trader. Is your goal to trade the market indexes? or is it something else? I know plenty of traders who don't give a shit about the market or trade the indexes and make good money, one guy I know, all he does is trade stock setups, obvioulsy what the market is doing can affect his setups, but he doesn't trade the stock indexes or ETF's or futures, just stock setups and mostly Longs at that and not shorts, he simply focuses on stocks taking huge volume and reads level 2 very effectively. Some other trader friends of mine come in each day and trade crude oil for 4 hrs a day, the only time they look at the market is to know when certain news is coming out that might affect crude (for example they stop trading crude oil 5 min before Crude Inventory News comes out, and 5 - 10 min after.
Therefore decide what your goals are and what kind of trader you are and work on them
also, the longer you have traded, the more those Rules that I posted as a Sticky above will make sense to you.
https://breakpointtrades.com/blog/post/211516/
Title: and look - if
Posted by morgan8 on 15th of Nov 2012 at 09:20 pm
i agree with you roger,about being on edge, i find one of the best things to do is to go back and look at the last few major tops (or a lot more). firstly it is good to know how tops and bottoms are formed as after all the basic tenet of TA is that history repeats but also it puts a bit of perspective on where we are NOW in comparison, which is still very close to the top, if it is a TOP, and as matt said, if it is there are plenty more opportunities to come, for another 6 months at a minimum imho.
very true morgan8.....
Posted by steve on 15th of Nov 2012 at 09:55 pm
very true morgan8.....
lastly and then I've got
Posted by matt on 15th of Nov 2012 at 09:17 pm
lastly and then I've got to go otherwise my wife will kill me as she's been waiting on me to go to the store with her while I type all this stuff on the blog
BPT's style has always been to present all sorts of information like a smorgasbord for traders of all styles to pick and choose from (or like a newspaper or magazine, you never read all the articles in a magazine or paper, you flip to the sections you like, same here) vs us telling you what to do.
I've given some systems here and there but quite honestly they've burned us more than help because people over rely on them.
The futures room that we are talking about bringing here would be laser focused and we would call out exact trades for you to take - so obviously it would fulfill the goal of some here who want to be told, however our system would also be taught as well
And remember Steve and I are two guys who work hard, we are far far from perfect, we will miss things and setups, but we constantly strive to improve and get better, it's all that we can do.
good night!
are you sure about rule # 7 or did you just put that in there to see if we are paying attention
Posted by roger on 15th of Nov 2012 at 09:07 pm
ha that's funny, no of
Posted by matt on 15th of Nov 2012 at 09:15 pm
ha that's funny, no of course I didn't any rules, I copied that from somewhere way back in 2008, don't remember where.
just an observation
Posted by kc on 15th of Nov 2012 at 05:59 pm
I think you're observing what a lot of us are thinking.
Why have a system based on price or MA if the determinate is the macd?
kc- not really sure I understand
Posted by matt on 15th of Nov 2012 at 08:45 pm
kc- not really sure I understand your comment about MACD, Yes RSI is a priced based indicator, so is a MACD, so are you saying all systems with any price based indicator should be based solely on MACD? What makes the MACD a better indicator than any other priced based indicator?
MACD is a fine indicator, RSI is a fine indicator, but like any indicator it has it's problems and lags - I've show unique ways to use the MACD such as via using a whipsaw filter to make it a MUCH better trending indicator, but that doesn't mean it's better than anything else like RSI etc. All these indicators are of course based on price. another type of indicator would be based on volume and would differ from these price based indicators - but again no one indicator can work for a system, it takes a combination of things, and even then, 99.9999% of systems all have their limitations and failures