Posted by mstaples37 on 6th of Aug 2021 at 05:28 pm
Matt, thanks for the new DVT table. Always appreciate all
the means around here to track things consistently and in a clear
way. Can you clarify what it means for a DVT to be hit?
Does that require a daily close below it or just for price to
touch it intraday? I know that in practice, you've encouraged
sometimes using a little judgment and discretion in terms of using
the DVT to exit (e.g., if the 50-day SMA was right below it, etc.),
but I'm curious what it means in this context.
Hello mstaples37, thanks yes I think the table is a nice way to
quickly glance where they all are.
Otherwise regarding your question, and I've addressed this so
many times in various written posts and discussions in the
newsletters but let me try to do so here again in a way that makes
sense and I'll also give some examples and what some others do.
Regarding the DVT and using them as a hard stop intra day or
waiting until the close or giving them a bit of extra room.
Unfortunately from what I've been able to ascertain, it's never
going to be a 100% black and white 1+2 = 3 sort of thing. You've
probably heard that Trading is more of an art than an exact
science, and that's true here with the DVT's. It really depends on
so many factors, first and foremost being what you are using them
for, your strategy and plan etc. Just to give you an example, one
money manager here I talk to generally waits to see how the market
closes, and his brokerage system, for example won't allow him to
make changes to his client's account an hr before the close. He
also has a bunch of clients who have money in non-tax free accounts
and so every time he moves them out of the market if a DVT is hit,
that generates a taxable event for his clients. So even if the exit
is correct, his clients are not always happy. Therefore he ends to
stick to either the 2 day or weekly DVT's for his clients who don't
want the taxable events, where the daily DVT's may be hit 3 - 5
times a year - the weekly may only trigger once every couple years
for example.
Also - again where the 'art' comes into it, I think on the daily
that a DVT is going to be hit, you can be open to look at other
factors - for example is the 50 day MA just a few points below, or
is there an obvious major support level just below that you are
willing to give an extra 10 or 20 points to the DVT? Is the
60 Stochastic very close to that 50% support area I discuss. Is
there a 3 wave ABC down and a cycle buy on the 120 min?
The other thing you can consider, stick to the DVT's and if they
are hit, you get out. No big deal (unless you are worried about the
taxable event's thing I discussed above), you can always get back
in. That said, getting back in you could use a variety of things as
well: 1. you could wait for the system to go back in. 2. The SPY
reversion to mean system generally goes long at some point when the
daily SPX DVT system is out, so you could use the SPY system to get
back in EARLY. 3. You could do a combination of those. 4. If you
see your own reason for getting back in you could do that as
well.
let's see, currently for the SPX I list the weekly, 2 day,
daily, and 120 min, I know one guy who splits an account 4 ways,
25% to the weekly, 25% to the 2 day, 25% to the daily, and 25% to
the 2hr, so that's yet another interesting variety.
again I know it would be much easier for you guys if I could
just say 100% do A then B then C - but at this stage I see this as
something that will vary from person to person, and yest there's
some art to this vs an exact equation.
Posted by mstaples37 on 8th of Aug 2021 at 08:41 pm
Matt, thanks -- apologies for not being clear. I
appreciate the art of all this and the need for people to have an
approach that makes sense for them. I was just curious what
you use for purposes of tracking these DVTs and what you mean when
you talk about them being hit. I.e., for that purpose, or any
others you see fit to share, what does it mean for a DVT to be
"hit?" Is it intraday (or intraperiod, in the case of the
2-day) or something else? That's all I'm asking about in
this case.
I completely get that in terms of actually making this
actionable, it's on the trader, and I didn't mean to make you type
out all that again. I've been tracking your explanations of
various approaches and appreciate the time you've taken to do so to
help us out.
This explanation helps Matt. I am in the money management
business with over $1 billion under management and the daily and
weekly DVT's are very helpful. Most if not all of my clients
are long term, but I use a separate smaller account with let's say
$100k to $250k and I will trade that account a bit more using the
DVT's on shorter time frame. Again, very helpful and I
think the table is awesome!!
Why not devise something that would yield the best results over
time? Would be great to see the 2 day stats, probably looks
great on a back test. Does just following that yield solid results?
Does using that and then allocating a % back long when the
reversion to mean systems kick in make sense? Historically
your probably not giving up much to safely wait for the 2 day to
get back long? Any insights would be appreciated.
from what I've seen, best to use a combination of the time
frames along with other things. For example maybe use the daily for
entries but the 2 day for exits, or the daily for entries and the 2
day and weekly for exits. The weekly, while it does a great job at
ignoring noise is slow to get back in. The SPY systems are
excellent at getting back in. Take note of ABC pullbacks in
uptrends as buying opportunities.
Posted by mstaples37 on 9th of Aug 2021 at 09:43 pm
Matt, thanks again. I appreciate all that info and
guidance. I'm asking a different, simple question. I'm
just asking what it means for a DVT to be "hit." E.g., is a
daily DVT hit if the DVT value is hit intraday or does it require a
close under it? I'm not saying I'm going to religiously get
out the second the price is touched -- that's what I was attempting
to explain when I first posed the question -- but you need some
kind of objective criterion to determine whether the DVT has been
hit in order to, e.g., measure consecutive DVTs being generated
without being hit. That's what I'm asking about: what,
for that purpose, it means for a DVT to be "hit."
Posted by steverobin on 10th of Aug 2021 at 05:15 am
If a DVT is "hit" it is intraday or at the close. How you
handle that depends on your trading style and plan. The DVT
is only a guide. At the end of the day you should decide what
to do and better yet follow your plan before it does get hit.
Don't over complicate it.
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Matt, thanks for the new
Posted by mstaples37 on 6th of Aug 2021 at 05:28 pm
Matt, thanks for the new DVT table. Always appreciate all the means around here to track things consistently and in a clear way. Can you clarify what it means for a DVT to be hit? Does that require a daily close below it or just for price to touch it intraday? I know that in practice, you've encouraged sometimes using a little judgment and discretion in terms of using the DVT to exit (e.g., if the 50-day SMA was right below it, etc.), but I'm curious what it means in this context.
Hello mstaples37, thanks yes I
Posted by matt on 7th of Aug 2021 at 02:00 pm
Hello mstaples37, thanks yes I think the table is a nice way to quickly glance where they all are.
Otherwise regarding your question, and I've addressed this so many times in various written posts and discussions in the newsletters but let me try to do so here again in a way that makes sense and I'll also give some examples and what some others do. Regarding the DVT and using them as a hard stop intra day or waiting until the close or giving them a bit of extra room. Unfortunately from what I've been able to ascertain, it's never going to be a 100% black and white 1+2 = 3 sort of thing. You've probably heard that Trading is more of an art than an exact science, and that's true here with the DVT's. It really depends on so many factors, first and foremost being what you are using them for, your strategy and plan etc. Just to give you an example, one money manager here I talk to generally waits to see how the market closes, and his brokerage system, for example won't allow him to make changes to his client's account an hr before the close. He also has a bunch of clients who have money in non-tax free accounts and so every time he moves them out of the market if a DVT is hit, that generates a taxable event for his clients. So even if the exit is correct, his clients are not always happy. Therefore he ends to stick to either the 2 day or weekly DVT's for his clients who don't want the taxable events, where the daily DVT's may be hit 3 - 5 times a year - the weekly may only trigger once every couple years for example.
Also - again where the 'art' comes into it, I think on the daily that a DVT is going to be hit, you can be open to look at other factors - for example is the 50 day MA just a few points below, or is there an obvious major support level just below that you are willing to give an extra 10 or 20 points to the DVT? Is the 60 Stochastic very close to that 50% support area I discuss. Is there a 3 wave ABC down and a cycle buy on the 120 min?
The other thing you can consider, stick to the DVT's and if they are hit, you get out. No big deal (unless you are worried about the taxable event's thing I discussed above), you can always get back in. That said, getting back in you could use a variety of things as well: 1. you could wait for the system to go back in. 2. The SPY reversion to mean system generally goes long at some point when the daily SPX DVT system is out, so you could use the SPY system to get back in EARLY. 3. You could do a combination of those. 4. If you see your own reason for getting back in you could do that as well.
let's see, currently for the SPX I list the weekly, 2 day, daily, and 120 min, I know one guy who splits an account 4 ways, 25% to the weekly, 25% to the 2 day, 25% to the daily, and 25% to the 2hr, so that's yet another interesting variety.
again I know it would be much easier for you guys if I could just say 100% do A then B then C - but at this stage I see this as something that will vary from person to person, and yest there's some art to this vs an exact equation.
Matt, thanks -- apologies for
Posted by mstaples37 on 8th of Aug 2021 at 08:41 pm
Matt, thanks -- apologies for not being clear. I appreciate the art of all this and the need for people to have an approach that makes sense for them. I was just curious what you use for purposes of tracking these DVTs and what you mean when you talk about them being hit. I.e., for that purpose, or any others you see fit to share, what does it mean for a DVT to be "hit?" Is it intraday (or intraperiod, in the case of the 2-day) or something else? That's all I'm asking about in this case.
I completely get that in terms of actually making this actionable, it's on the trader, and I didn't mean to make you type out all that again. I've been tracking your explanations of various approaches and appreciate the time you've taken to do so to help us out.
This explanation helps Matt. I
Posted by goap1207 on 7th of Aug 2021 at 07:46 pm
This explanation helps Matt. I am in the money management business with over $1 billion under management and the daily and weekly DVT's are very helpful. Most if not all of my clients are long term, but I use a separate smaller account with let's say $100k to $250k and I will trade that account a bit more using the DVT's on shorter time frame. Again, very helpful and I think the table is awesome!!
Why not devise something that
Posted by jonesy85 on 8th of Aug 2021 at 08:20 am
Why not devise something that would yield the best results over time? Would be great to see the 2 day stats, probably looks great on a back test. Does just following that yield solid results? Does using that and then allocating a % back long when the reversion to mean systems kick in make sense? Historically your probably not giving up much to safely wait for the 2 day to get back long? Any insights would be appreciated.
from what I've seen, best
Posted by matt on 9th of Aug 2021 at 12:16 am
from what I've seen, best to use a combination of the time frames along with other things. For example maybe use the daily for entries but the 2 day for exits, or the daily for entries and the 2 day and weekly for exits. The weekly, while it does a great job at ignoring noise is slow to get back in. The SPY systems are excellent at getting back in. Take note of ABC pullbacks in uptrends as buying opportunities.
Matt, thanks again. I appreciate
Posted by mstaples37 on 9th of Aug 2021 at 09:43 pm
Matt, thanks again. I appreciate all that info and guidance. I'm asking a different, simple question. I'm just asking what it means for a DVT to be "hit." E.g., is a daily DVT hit if the DVT value is hit intraday or does it require a close under it? I'm not saying I'm going to religiously get out the second the price is touched -- that's what I was attempting to explain when I first posed the question -- but you need some kind of objective criterion to determine whether the DVT has been hit in order to, e.g., measure consecutive DVTs being generated without being hit. That's what I'm asking about: what, for that purpose, it means for a DVT to be "hit."
If a DVT is "hit"
Posted by steverobin on 10th of Aug 2021 at 05:15 am
If a DVT is "hit" it is intraday or at the close. How you handle that depends on your trading style and plan. The DVT is only a guide. At the end of the day you should decide what to do and better yet follow your plan before it does get hit. Don't over complicate it.