2009年5月14日星期四
2009年5月13日星期三
Trade - Basic Spiky Action in Chart
- Potential Positive MD – a buying spike which has yet to be followedby development.
- Potential Negative MD – a selling spike which has yet to be followedby development.
- Confirmed Positive MD – a buying spike which has been followed bydevelopment.
- Confirmed Negative MD – a selling spike which has been followedby development.
- Daily Positive MD – a buying spike left at the end of the day.
- Daily Negative MD – a selling spike left at the end of the day.
Trade - Tips
- Always minimize risk in every way you can.
- Always trade against some kind of reference point. A reference point is one at which you might decide you are wrong and get out depending on what action is seen at that point. Perhaps this can be summarized as "know the potential downside whenever you enter a trade."
- Stay with positions unless you see something which definitely changes your position.
- It is generally best to wait for some form of confirmation before adopting a position.
- Whenever you enter a position know at what level you would get out and at what level you would hedge (if appropriate). Make sure you do so.
Line Study Practice - SSEC May 14
The index has broken up through an important level of the bottom pattern that has formed on the weekly chart. The signals are still bullish after the sustained downturn since Q4 07. The MACD is currently sending a strong signal for a continued longer term uptrend. A similar thing is happening on other markets around the world so we need to watch these bullish signals closely. But at the moment they are still pointing to the upside on the weekly chart. There are good volumes behind the latest upturn as you can see and the target from this bottoming pattern is around 3,000.
2009年5月12日星期二
微软收购？SAP还是Yahoo?
微软(Microsoft Corp.)进行了公司历史上首次发债融资；该公司打算利用其强劲的信用评级和投资者对它的追捧，筹资37.5亿美元。这家软件巨头周一所发售债券的利息仅仅略高于美国国债的收益率，而明显低于其他公司债。
此举使得市场猜测微软可能正计划用筹资所得进行一次收购，该公司正寻求重振增长势头。但知情人士称，微软对所筹资金并没有明确的用途，它只是不希望错过当前有利的市场条件。
分析师们预计，微软更有可能用这笔资金继续回购股票；过去一年微软股价下跌了超过30%。
此次发债是去年微软董事会批准的发债计划之一。在周一向证券监管部门递交的文件中，微软表示其计划将筹资所得用于“一般公司用途”，包括回购股票和收购交易。微软一位发言人拒绝对此进一步置评。
截至3月底，微软拥有超过250亿美元的现金和投资，是美国数量不断减少的拥有AAA顶级信用评级的公司之一。
如果微软找到一个感兴趣的目标，这笔资金将使微软有更多财力进行一次大规模收购。例如，尽管去年斥资近450亿美元收购雅虎公司(Yahoo Inc.)的努力失败后，微软首席执行长巴尔默(Steve Ballmer)已经表示微软不再有意全盘收购雅虎；但巴尔默也说他仍然希望微软和雅虎在网络搜索业务方面建立合作。当然，微软也可能使用这笔额外现金，在企业软件市场融资收购一家像德国SAP AG那样的公司。
微软周一发售了5年期、10年期和30年期债券。一位知情人士透露，总额20亿美元的5年期债券收益率定为2.971%，较同等美国国债收益率高出95个基点。
微软周一发售了5年期、10年期和30年期债券。一位知情人士透露，总额20亿美元的5年期债券收益率定为2.971%，较同等美国国债收益率高出95个基点。
压力测试反应市场预期？
美国银行业压力测试能反应市场预期吗？从银行压力测试的结果看，高盛(Goldman Sachs)要好过摩根士丹利(Morgan Stanley)。根据确定银行资本需求的最坏假设，美国政府假定高盛今明两年的利润水平是其主要对手摩根士丹利的2.5倍。
美国财政部(Treasury)和银行业监管机构称，在此期间，除资本金外，高盛还将拥有185亿美元的资源来弥补各种损失。该数据主要反映出一家银行可实现的收益水平（不包括拨备和证券项目）。然而，美国政府对摩根士丹利的相同评估数字仅为71亿美元。
在银行压力测试结果于上周四公布后，摩根士丹利通过发行普通股融资20亿美元。如果政府之前针对摩根士丹利给出了更强的盈利能力评估，该公司或许也无需稀释股东权益。
从压力测试的结果看，美国政府对摩根士丹利71亿美元的盈利能力预期较其对高盛的预期低了62%，但摩根士丹利过去五年实际公布的净收入水平却平均只比高盛低22%。
政府文件并没有对上述巨大差距给出非常具体的解释。人们希望压力测试者没有太过于关注高盛第一季度的强大优势，因为当季摩根士丹利收入锐减68%，部分原因在于该行当时在努力控制风险。
在这两者之间，很少有人会质疑高盛的强者地位。美国政府对高盛的预期也许是正确的。然而，数据似乎引发了这样一种猜疑：高盛也许比摩根士丹利更擅长通过投资高风险资产盈利。 但是，为什么摩根史丹利的股价涨幅要高于高盛呢？ 难道华尔街的估值游戏又开始了么？
金钱面前没有道德？从百度股价说起
中国互联网搜索巨头（也许该叫巨偷？）百度(Baidu.com Inc)今年第一季度广告费支出达人民币4,000万元（约合560万美元），其中绝大部分给了中国中央电视台。网络批评人士质疑百度此举是在花重金换取中央电视台的青睐。4月27日在百度业绩公布后的电话会议上，百度首席财务长李昕皙证实了这一数据。李昕皙表示，公司将这笔费用视为增加的营销相关支出。
4月30日开始，一则题为《百度高管曝料：央视收了我们4,000万》的贴子出现在中国互联网上，随即被各大网站和论坛广泛转载。
其中的背景情况是：去年11月，中央电视台播出了一系列批评百度竞价排名操作的报导。一个新闻节目曝光说，百度从没有执照的医疗公司收了钱，允许这些公司在其网络上打广告。报导称，这些公司付的钱越多，它们名字在搜索结果网页上出现的排位就越高。这些报导导致百度股价当日暴跌至多25%，百度被迫重新设计其搜索结果以应对外界批评。
今年1月份，百度首席执行长李彦宏在中央电视台的春节联欢晚会上露面，这是一个受到普遍关注的年度盛会。一些网民统计了李彦宏总共在电视节目上露面了八次。与此同时，百度还购买了春晚之前的15秒广告，晚会中的一个相声节目也提到了百度。此后，媒体和公众都开始猜测百度在央视花了多少钱做广告。
目前没有证据显示百度的广告费对中央电视台的节目决策有什么影响，但是出乎意料的是，百度股价近期大幅飙升（百度公布今年第一财季实现净利润人民币1.811亿元，较上年同期增长24%）。
2009年5月10日星期日
Wall Street Loves Bad Banks, but You Shouldn't
These weren't stress tests. This was stress therapy.
The main purpose of this exercise wasn't to see whether banks could cope with an economic downturn. It was to calm investors' nerves. They were in panic about six weeks ago, when markets, and the economy, appeared on the brink.
That's why the Fed made these tests so easy. Their "worst case scenario" for the economy was actually rosier than some current forecasts. Half the banks flunked anyway, but nobody seems to care. Bank of America is short about $35 billion? Oh, mark those shares up 300%.
Almost anything is better than the unknown, which is what was spooking everybody two months ago.
Seems Wall Street is back in its happy place again. Banks and other highly leveraged stocks have skyrocketed. Fund managers, many of whom have come late to the rally, are now worried about "underperforming" before their next quarterly review. So many are now madly rushing to buy the riskiest stocks they can.
What does this mean for you and your money?
Don't worry about momentum and action, and don't worry about bank stocks. They may be cheap for all I know. But they are impossible to value with any degree of confidence. And who cares? The single greatest realization that hits every investor, and every poker player, is the same. You don't have to bet on every hand. Nine times out of 10, the right move is simply to sit it out.
While everybody is talking about the banks, they are missing something that looks far more interesting and useful. Many top quality defensive stocks have been left behind in this market rally. Companies like Kellogg's. People are going to keep eating corn flakes in good times and bad.
Defensive companies often get left behind in a fast short-term bounce. But over the long term, solid, steady companies have usually provided investors with better returns.
Many of these kinds of stocks have rallied little from their lows. No one is excited about defensives because there is no "action" there and they are not a "recovery" play. They will not help fund managers meet quarterly numbers. These just look like good companies at pretty reasonable valuations. And who, in this mad rush, could possibly be interested in such a thing?
The main purpose of this exercise wasn't to see whether banks could cope with an economic downturn. It was to calm investors' nerves. They were in panic about six weeks ago, when markets, and the economy, appeared on the brink.
That's why the Fed made these tests so easy. Their "worst case scenario" for the economy was actually rosier than some current forecasts. Half the banks flunked anyway, but nobody seems to care. Bank of America is short about $35 billion? Oh, mark those shares up 300%.
Almost anything is better than the unknown, which is what was spooking everybody two months ago.
Seems Wall Street is back in its happy place again. Banks and other highly leveraged stocks have skyrocketed. Fund managers, many of whom have come late to the rally, are now worried about "underperforming" before their next quarterly review. So many are now madly rushing to buy the riskiest stocks they can.
What does this mean for you and your money?
Don't worry about momentum and action, and don't worry about bank stocks. They may be cheap for all I know. But they are impossible to value with any degree of confidence. And who cares? The single greatest realization that hits every investor, and every poker player, is the same. You don't have to bet on every hand. Nine times out of 10, the right move is simply to sit it out.
While everybody is talking about the banks, they are missing something that looks far more interesting and useful. Many top quality defensive stocks have been left behind in this market rally. Companies like Kellogg's. People are going to keep eating corn flakes in good times and bad.
Defensive companies often get left behind in a fast short-term bounce. But over the long term, solid, steady companies have usually provided investors with better returns.
Many of these kinds of stocks have rallied little from their lows. No one is excited about defensives because there is no "action" there and they are not a "recovery" play. They will not help fund managers meet quarterly numbers. These just look like good companies at pretty reasonable valuations. And who, in this mad rush, could possibly be interested in such a thing?
2009年5月9日星期六
2009年5月7日星期四
Line Studies - Moving Average Convergence/Divergence (MACD)
MACD is the next trend-following dynamic indicator. It indicates the correlation between two price moving averages.The MACD Technical Indicator is the difference between a 26-period and 12-period Exponential Moving Average (EMA). In order to clearly show buy/sell opportunities, a so-called signal line (9-period indicators` moving average) is plotted on the MACD chart.
The MACD proves most effective in wide-swinging trading markets. There are three popular ways to use the Moving Average Convergence/Divergence: crossovers, overbought/oversold conditions, and divergences.
Crossovers
The basic MACD trading rule is to sell when the MACD falls below its signal line. Similarly, a buy signal occurs when the Moving Average Convergence/Divergence rises above its signal line. It is also popular to buy/sell when the MACD goes above/below zero.
Overbought/oversold conditions
The MACD is also useful as an overbought/oversold indicator. When the shorter moving average pulls away dramatically from the longer moving average (i.e., the MACD rises), it is likely that the security price is overextending and will soon return to more realistic levels.
Divergence
An indication that an end to the current trend may be near occurs when the MACD diverges from the security. A bullish divergence occurs when the Moving Average Convergence/Divergence indicator is making new highs while prices fail to reach new highs. A bearish divergence occurs when the MACD is making new lows while prices fail to reach new lows. Both of these divergences are most significant when they occur at relatively overbought/oversold levels.
Calculation of MACD
The MACD is calculated by subtracting the value of a 26-period exponential moving average from a 12-period exponential moving average. A 9-period dotted simple moving average of the MACD (the signal line) is then plotted on top of the MACD.
MACD = EMA(CLOSE, 12)-EMA(CLOSE, 26)Moving Average of Oscillator
SIGNAL = SMA(MACD, 9)
Where:
EMA — the Exponential Moving Average;
SMA — the Simple Moving Average;
SIGNAL — the signal line of the indicator.
Moving Average of Oscillator is the difference between the oscillator and oscillator smoothing. In this case, Moving Average Convergence/Divergence base-line is used as the oscillator, and the signal line is used as the smoothing.
OSMA = MACD-SIGNAL
2009年4月30日星期四
Line Studies - Elliott Wave Theory
Elliott Wave Theory
The Elliot Wave Theory represents a development of the well-known Dow theory. It applies to any freely traded assets, liabilities, or goods (shares, obligations, oil, gold, etc.). The Wave Theory was proposed by accountant and business expert Ralph Nelson Elliott in his study titled "The Wave Principle" published in 1938.
After he had retired and a serious illness had been discovered in his organism, Elliott started to observe stock markets and their charts in the hope of understanding the market behavior. After he had performed a large work, he concluded that the market, being a product of predominant psychology of the masses, followed some laws.
The Elliott Wave Theory is based on a certain cyclic laws in human behavior psychology. According to Elliott, the market price behavior can be clearly estimated and shown in the chart as waves (wave is here an explicit price move). The Elliott Wave Theory says that the market can be in two large phases: Bull Market and Bear Market.
Elliott proposes, as well, that all price moves on the market are divided into:
The waves are divided into:
The longest cycle, according to Elliott, is called Grand Supercycle that is compose of 8 Supercycle waves. The latter ones are each composed of 8 Cycles, etc. For example, Fig. 2 shows 3 basic cycles. It can easily be seen that impulse waves and the subsequent corrective waves are proportional. The stronger impulse is, the stronger correction is, and vice versa.
The Elliott Wave Theory is criticized for there is not always a clear definition of when a wave starts or ends. Corrections are especially difficult in this regard.
Elliott Wave Theory and Fibonacci Numbers
Fibonacci Numbers provide the mathematical foundation for the Elliott Wave Theory. Fibonacci numbers play an important role in the construction of the complete market cycle described with the Elliott's waves. Each of the cycles Elliott defined are comprised of a total wave count that falls within the Fibonacci number sequence.
Under closer examination of Fig. 2, one can notice that the complete market cycle is composed of two large waves, eight middle waves, and 34 small waves. Similarly, at a bull market, we can see that a bull Grand Supercycle is composed of one large wave, five middle waves, and 21 small waves. If we continue this subdivision, we will be able to observe the consequent 89 even smaller waves, etc.
Respectively, a bear Grand Supercycle is composed of one large wave, three middle waves, and 13 small waves. At the next sublevel, there are 55 very small waves, etc.
This principle is normally used in the Elliott Wave Theory as follows: movement in a certain direction should continue until it reaches some point in concordance with the summational Fibonacci number sequence.For example, if the time, during which the trend does not change, exceeds 3 days, this direction should not reverse until the 5th day begins. Similarly, the trend should continue up to 8 days if it has not changed the direction within 5 days. 9-day trend should not be completed until the 13th day begins, etc. This basic pattern of how the trend movements can be calculated equally applies for both hourly, daily, weekly, or monthly data. However, this is just an "ideal model", and nobody can expect that prices' behavior will be so definite and predictable. Elliott noted that deviations could happen both in time and in amplitude and individual waves would hardly develop exactly in these regular forms.
The Elliot Wave Theory represents a development of the well-known Dow theory. It applies to any freely traded assets, liabilities, or goods (shares, obligations, oil, gold, etc.). The Wave Theory was proposed by accountant and business expert Ralph Nelson Elliott in his study titled "The Wave Principle" published in 1938.
After he had retired and a serious illness had been discovered in his organism, Elliott started to observe stock markets and their charts in the hope of understanding the market behavior. After he had performed a large work, he concluded that the market, being a product of predominant psychology of the masses, followed some laws.
The Elliott Wave Theory is based on a certain cyclic laws in human behavior psychology. According to Elliott, the market price behavior can be clearly estimated and shown in the chart as waves (wave is here an explicit price move). The Elliott Wave Theory says that the market can be in two large phases: Bull Market and Bear Market.
Fig 1
Elliott proposes, as well, that all price moves on the market are divided into:
- five waves in the direction of the main trend (waves 1 to 5 in Fig 1);
- three corrective waves (waves A, B, C in Fig 1).
The waves are divided into:
- impulses that create a directed trend (bull or bear) and cause the market to move very actively (waves 1, 3, 5, А, С in Fig 1);
- corrections (rollbacks) that are characterized by moving against the trend (waves 2, 4, В in Fig 1).
Fig 2
In his Wave Theory, Eliott was based on the waves subdivision principle. This means that every wave is a part of a longer wave and is subdivided into shorter waves itself (Fig. 2). Every wave is subdivided into 3 or 5 waves. This subdivision depends on the direction of the longer wave.
The main principle in the Elliott's theory is that every impulse wave consists of five shorter waves and every corrective wave (against the trend) is composed of three waves, which can be well seen in Fig. 2. For example, Wave 1 in Fig. 2 is composed of 5 shorter waves since it is an impulse wave that creates the trend.The longest cycle, according to Elliott, is called Grand Supercycle that is compose of 8 Supercycle waves. The latter ones are each composed of 8 Cycles, etc. For example, Fig. 2 shows 3 basic cycles. It can easily be seen that impulse waves and the subsequent corrective waves are proportional. The stronger impulse is, the stronger correction is, and vice versa.
The Elliott Wave Theory is criticized for there is not always a clear definition of when a wave starts or ends. Corrections are especially difficult in this regard.
Elliott Wave Theory and Fibonacci Numbers
Fibonacci Numbers provide the mathematical foundation for the Elliott Wave Theory. Fibonacci numbers play an important role in the construction of the complete market cycle described with the Elliott's waves. Each of the cycles Elliott defined are comprised of a total wave count that falls within the Fibonacci number sequence.
Under closer examination of Fig. 2, one can notice that the complete market cycle is composed of two large waves, eight middle waves, and 34 small waves. Similarly, at a bull market, we can see that a bull Grand Supercycle is composed of one large wave, five middle waves, and 21 small waves. If we continue this subdivision, we will be able to observe the consequent 89 even smaller waves, etc.
Respectively, a bear Grand Supercycle is composed of one large wave, three middle waves, and 13 small waves. At the next sublevel, there are 55 very small waves, etc.
This principle is normally used in the Elliott Wave Theory as follows: movement in a certain direction should continue until it reaches some point in concordance with the summational Fibonacci number sequence.For example, if the time, during which the trend does not change, exceeds 3 days, this direction should not reverse until the 5th day begins. Similarly, the trend should continue up to 8 days if it has not changed the direction within 5 days. 9-day trend should not be completed until the 13th day begins, etc. This basic pattern of how the trend movements can be calculated equally applies for both hourly, daily, weekly, or monthly data. However, this is just an "ideal model", and nobody can expect that prices' behavior will be so definite and predictable. Elliott noted that deviations could happen both in time and in amplitude and individual waves would hardly develop exactly in these regular forms.
2009年4月28日星期二
Trade - Market Myths
Indicators and market techniques
I now want to talk about illusion, because illusion is what most trading is based on. This in itself is not the problem, the problem is that many traders give the illusion meaning, when often it is meaningless. The illusion may take the form of Elliott Waves, Gann analysis, RSI divergence, MACD signals, Stochastics, or whatever. The truth is that none of these mean anything. This is not to say that the signals are false, but they will only be correct on a statistical basis, i.e. they have no meaning. They are only as useful as long as the market concurs by its action, once it stops doing so they are worse than useless. In fact to an extent most of these techniques are merely used as an entry mechanism. Entry is the easy part, it doesn’t really matter how you enter, it is how you exit that counts. Many traders get hooked on the illusion and lose out because they cannot see that it has become meaningless. The trick is to see the entry mechanism for what it is, just a convenient illusion to get you into the market. Successful traders stay with the trade only so long as it fits their criterion, once that stops they are out. That is the key – entry islargely irrelevant, its only relevance is to give you a trigger for getting in, plus a stop point. Understand that and you are on your way.
To put this another way, traders are obsessed by entry criterion, but most techniques you care to mention are merely entry systems, nothing else, it is when we think of it as something else that problems occur. Elliott and Gann are the worst because they pretend to be something they are not right from the start. The truth is that if you trade with the trend it doesn’t really matter where you enter, and if you trade against the trend the same is true. With one form of entry you will win eight times out of ten, with the other you will lose. Can you guess which is which? Actually eight times out of ten is a bit high, but then if you get the trend right maybe not – often though, the perceived trend is not the same as the trend.
News
News in itself has little meaning also. This story illustrates the point.
There was a poor farmer whose only asset was a fine stallion. One day it ran off. “How awful” cried his neighbours, “what will you do?” The farmer indicated that it was not wonderful but he would see what came next. Next day the stallion returned with two wild mares he had captivated with his obvious charms. “My God how wonderful” said the neighbours. “Maybe” said the farmer. Thenext day the farmer’s son, who did all the work, broke a leg taming the two mares. “How awful” said the neighbours, “will you survive?” “Maybe” said the farmer. Next day the army arrived to enrol young men for the war. “What luck” said the neighbours, “now your son won’t be killed on the front line.”
The motto of this story is that news is completely irrelevant, it is what follows that is important, and that we can’t know. The relevance to trading is that the content is of little import, what matters is how the market perceives the news item and secondly how it reacts to it. So if the market perception is “good” but we see selling, then that gives us a message.
News also creates risk, so you should avoid trading just prior to news items. Low risk positions are available once the news is out of the way.
Zero sum? Don’t you believe it!
People say that futures and options trading is a zero sum game. Don’t you believe it. It is only zero sum if you can enter and exit for free. You cannot, every time you trade you pay commissions and these make this a big negative sum game. I am ignoring the bid/offer spread which adds an additional cost we must bear unless we always use limit orders, and they have their own problems. This is one of the main reasons why the percentage of losers is so high. All traders are fighting over a negative pot!
Some traders think that all they need is a system and it will be all right. There is some truth in this as I have explained in this book. However the system has to suit them and very few systems, probably none, are “easy.” They all require work and many traders do not really want work. That is one reason why the drop out rate is so high.
Trading Pyramid - System Parameters
In the market there are two types of risk. There is the risk of losing money and there is the risk of losing a lot of money. As there are no free lunches you can expect the trading vehicles(options and futures) which we are discussing to offer a balance against these two types or risk and this is what we find. To using those vehicles, there are something you must know before you do anyting.
- You need to define your objectives.
- Therefrom you get your trending signal.
- You must then decide on your Money Management system – this is critical.
- The Money Management system tells you how much you can risk on each trade and from this you can decide on your stop policy and position size.
- You must then decide on your entry strategy.
- The next step is how to move your stop as the trade progresses.
- Finally you will want an exit strategy, although this may simply be to wait for the stop to be hit.
There are of course two sides to trading. The first is the theory, and this is where the simple rules come in. The second is the practice and this is where the human brain (including all emotional and instinctive input) comes in. The formula is simple:
Simple Trading Rules + Human Brain = Chaos and Confusion
Anyone who has ever traded knows the truth of this formula.
So here come the simple rules. If your trading approach lets profits run and cuts losses short and if it achieves a 50 per cent hit rate then overall you will win. This is clearly so. For each profit there will be a loss, but as profits are allowed to run they will average a larger sum than the losses, which are always kept small.
The purpose of analysis (technical or fundamental) is not to analyze markets, it is to build your system/trading approach. This is not to denigrate Technical Analysis because building your system is an essential step to success. The reason I know that you need a system is because of that formula I just mentioned before. A system does produce simple trading rules. Anything else is going to be more complicated. I might summarize this as:
If Simple Trading Rules + Human Brain = Chaos and Confusion Then Complex Trading Rules + Human Brain = ?
Line Study Practice - SSEC 29/04
The index has broken up through an important level of the bottom pattern that has formed on the weekly chart. The signals are still bullish after the sustained downturn since Q4 07. The MACD is currently sending a strong signal for a continued longer term uptrend. A similar thing is happening on other markets around the world so we need to watch these bullish signals closely. But at the moment they are still pointing to the upside on the weekly chart. There are good volumes behind the latest upturn as you can see.
2009年4月27日星期一
Line Studies - Andrews’ Pitchfork
Andrews’ Pitchfork is an instrument consisting of three parallel Trend Lines. This instrument was developed by Dr. Alan Andrews. Interpretation of Andrews’ Pitchfork is based on standard rules of interpretation of support and resistance lines.The first trend line starts in a selected extreme left point (it is an important peak or trough) and is drawn exactly between two extreme right points. This line is the "handle" of pitchfork. Then, the second and the third trend line issuing from two above-mentioned extreme right points (important peak and trough) is drawn parallel to the first one. These lines are "tines" of the pitchfork.
Line Studies - Standard Deviation Channel
Standard Deviation Channel is built on base of Linear Regression Trend representing a ussual trendline built between two points on the price chart using the method of least squares. As a result, this line proves to be the exact median line of the changing price. It can be considered as an equilibrium price line, and any deflection up or down indicates the superactivity of buyers or sellers respectively.Standard Deviation Channel consists of two parallel lines, equidistant up and down from the Linear Regression Trend. The distance between frame of the channel and regression line equals to the value of standard close price deviation from the regression line. All price changes take place within Standard Deviation Channel, where the lower frame works as support line, and the upper one does as resistance line. Prices usually exceed the channel frames for a short time. If they keep outside of the channel frames for a longer time than usually, it forecasts the possibility of trend turn.
Line Studies - Linear Regression Channel
Linear Regression Channel is built on base of Linear Regression Trend representing a ussual trendline drawn between two points on a price chart using the method of least squares. As a result, this line proves to be the exact median line of the changing price. It can be considered as an equilibrium price line, and any deflection up or down indicates the superactivity of buyers or sellers respectively.Linear Regression Channel consists of two parallel lines, equidistant up and down from the line of linear regression trend. The distance between frame of the channel and regression line equals to the value of maximum close price deviation from the regression line. All price changes take place within Regression Channel, where the lower frame works as support line, and the upper one does as resistance line. Prices usually exceed the channel frames for a short time. If they keep outside of the channel frames for a longer time than usually, it forecasts the possibility of trend turn.
Line Studies - Equidistant Channel
Equidistant Channel represents two parallel trend lines connecting extreme maximum and minimum close prices. Market price jumps, draws peaks and troughs forming the channel in the trend direction. Early identification of the channel can give a valuable information including that about changes in the trend direction what allows to estimate possible profits and losses. It is necessary to give the direction of the channel and its width to build the instrument.
2009年4月26日星期日
Line Study Practice - SSEC 22/04
The Gann Fun shows a signal that the market is going down. The prices fall below 1x1 line, it means the trend descending.
The same signal is also given by Fibonacci Fun. The prices is fall below level of 38.2. This is a berish signal.
Let's see more complicated charts. Some good technical signals this week. A dip back in line with the signal given by the MACD which crossed to the downside as we thought it would. The Kairi line has crossed below the zero line and that is a bearish signal. The Parabolic-SAR is still bullish but that is likely turn soon. As I said earlier in the week the technical signs are changing from bullish to indicate more caution near term. Wall Street is having much less influence on sentiment and the short term correlation with the U.S. market has come down sharply as you can see from the lower chart.
2009年4月25日星期六
Testing Manager - ask for testability features
If you are the person who will lead the testing effort for a product, you are probably the first tester involved in the project. The sooner you request testability features, the more likely ot is that the programmers and project managers will agree to budget and schedule for them. If they aren't budgeted and scheduled into the project plan, you probably won't get them.
In general, it's up to you to educate the project team about your team's needs and about the types of information and support that will make your team more efficient and more effective.
Testing Manager - There are always late changes
Many traditional project management approaches are designed to limit and control change, but others embrace it. All project management approaches must nonethelessdeal with change.
Imagine building a new chair to replace one that wore out. It is clear what is needed, who needs it, what they'll do with it, and what kinds of stresses they'll put on it. You can find people who have made chairs very similar to the one you're about to make.
Software isn't like that. In most software projects, no one has created exactly this product before, and even if others have, the people on this project haven't. Additionally, the people who will use this software haven't use it before. Even though they might have a good idea of what they want, they don't know to specify requirements because:
- They don't know all of their requirements.
- Their requirements will change as they try early versions of the software or competitors' products. They will discover new ways to use the software and imagine other uses they wish they could make, but can't(yet).
- Different stakeholders have different needs, which are often in conflit. No one document can articulate all of the conflicting and potentially conflicting requirements and balance them.
Moreover, as components and tools are built and skills are learned, the expected costs to provide a given benefit will change, making it more or less easy to satisfy someone who wants that benefit.
Testing Manager - Don't try to create a control culture
Testers often receive, and give, detailed advice about how projects should be managed. I think that much of that is naive. The worst and most dogmatic of it comes from testers and consultants whose product development experience is limited to testing(or otherwise measuring or evaluating) the work of others.
Testers often see projects at their worst. Testers face the consequences of poor and incomplete decisions and half-done tasks, without noticing the planning and work that allowed the product to get as good as it is. What appear to be poor and incomplete decisions are often thoughtful business decisions with which you disagree. It is easy to believe that you know better and would do it better.
Some processes make it easier or harder for testers. However, a competent test group can provide solid service to a wide range of project managers, who work under very different project management styles, including the inconvenient ones and the ones that make the testing part of the project less efficient.
Some processes seem dstined to produce bad products. This is serious problem; someone should manage this. Unfortunately the worst group to manage this is the testing group. Testing group don't have the resources, the experience, or the political power to fix the broader development processes or to manage the fixed processes.
I am not saying that you(the human being who is doing testing today) should learn your place and stay it. Far from that, I encourage you to expend your role and influence in the company. If you want to and have the competence to manage the project manager, do so. But do that job from an appropriate role - as the project manager's manager. It's not the role of the test manager.
2009年4月23日星期四
Trading Pyramid - The Three Simple Rules
Secret 1: Cut your losses
The first function that the new trader must accomplish is to learn the business (instruct the core). Whilst doing so the key is to minimize your tuition fees, so cut those losses, because they are your tuition fees. The money spent on software, newsletters, books, seminars etc. is often trivial in comparison. As we learn the business we find that we tend to churn away without getting very far. We learn to cut losses, but find that we make plenty of good trades but not only are we cutting losses, we are also cutting our profits. No surprise there. The ego, desperate for anything positive, takes any profit it sees. But this is also no good because if you are going tomake money you have got to take those big profits. To do so you need:
Secret 2: Run your profits
OK, now you are starting to make progress. You should be making consistent profits on a one contract basis. But you have not cracked it yet. When you make it, now you can start to implement the final secret:
Secret 3: Trade selectivity
You have got to learn how to pick only the best opportunities. This takes time. You have got to find the right trading approach for yourself. You have got to narrow your focus on the market. There is far too much information out there to absorb. So decide on your methodology, concentrate on what you need, and become an expert in its application. When you do this you will know which are the best opportunities and which are not. At the same time you will need to develop the mental discipline and patience to wait forjust those opportunities.
Actually I will give you an added bonus:
Secret 4: Trade with the trend
That way you will have many more winners.
Using stops
Having got to that point novice traders are forced to use market stops because they rarely have the skill to use one of the many alternatives. But immediately trading becomes more complex, because you keep on getting stopped out! Unfortunately that is just one of the things traders have to get used to. Particularly so when the market triggers your stop and then goes off in the direction you intended. That will happen a lot as well!
Now to the practical problems of using stops. These come in a whole range of shapes and forms. Let’s start with the most simple human urge, as expressed in everyday life. When we see something we want, we grab it; when we see something we dislike, we often drive it from our minds – let’s forget about it, it will probably go away. In the real world this may not hurt too much, but in the markets, losses that are treated this way tend to get bigger. It is a basic human urge to ignore bad things, thus we are pre-programed not to take losses, but we are also pre-programedto take profits as soon as we see them. Think about your life so far and the way you live it. How easy do you think it would be to change some of your basic behavioral characteristics? Pretty tough? Well that is what you have to do to follow the first two simple rules.
Losses
Then there is the dear old ego. Guess what? Most of us do not like being wrong. Most of us associate losing money with being wrong. Guess what? We would rather avoid taking a loss, which will then probably get worse, than admit we might be wrong. Some traders talk about how much a novice trader is prepared to pay before admitting he is wrong. What is your price, $1000, $2000, $5000, or are you in the $100 000 category along with some others I know? Before starting to trade make sure you are happy being wrong a lot of the time – it might save you a fortune.
Most traders learn their lessons the hard way and learning to cut losses is usually the hardest of all because it is the most painful. Most traders admit to that one trade that went horribly wrong, and I suspect those that don’t admit it also experienced it. They just prefer to hide it away, maybe even from themselves. Far better to be open, especially with yourself.
Running profits
The second problem is the one mentioned above about wanting to grab nice things when we see them, when we want them. We have done that all our lives, now we have to change the habits of a lifetime. It is not easy, although some methodologies overcome these difficulties.
Another factor is relaxation. Humility and relaxation are as important in trading as are Money Management, Risk Control and the rest. If you are not relaxed then you will always be tempted to take action, taking action is the enemy of running profits.
Trading selectively
The third simple rule “Trade Selectivity” is simpler in concept but is the culmination of all the work you do as a trader. You are only going to become good at this once you have served your apprenticeship and become an expert.
Trading with the trend
Nor do I intend to say too much about trading with the trend. Indeed this is something of a truism. Trends tend to continue, that is what they do. Thus if you trade with it you are going to have much better odds in your favor. Of course there are different trends within every timescale. So first you must decide on your timescale. Then you must devise methods of entering trades. These must be low risk. Once positioned youshould stay with it until that trend changes, again according to your timescale. It’s really very simple, it’s just doing it that causes problems!
It is important to be aware of the practical and psychological problemsin following these rules, and to learn to overcome them.
The first function that the new trader must accomplish is to learn the business (instruct the core). Whilst doing so the key is to minimize your tuition fees, so cut those losses, because they are your tuition fees. The money spent on software, newsletters, books, seminars etc. is often trivial in comparison. As we learn the business we find that we tend to churn away without getting very far. We learn to cut losses, but find that we make plenty of good trades but not only are we cutting losses, we are also cutting our profits. No surprise there. The ego, desperate for anything positive, takes any profit it sees. But this is also no good because if you are going tomake money you have got to take those big profits. To do so you need:
Secret 2: Run your profits
OK, now you are starting to make progress. You should be making consistent profits on a one contract basis. But you have not cracked it yet. When you make it, now you can start to implement the final secret:
Secret 3: Trade selectivity
You have got to learn how to pick only the best opportunities. This takes time. You have got to find the right trading approach for yourself. You have got to narrow your focus on the market. There is far too much information out there to absorb. So decide on your methodology, concentrate on what you need, and become an expert in its application. When you do this you will know which are the best opportunities and which are not. At the same time you will need to develop the mental discipline and patience to wait forjust those opportunities.
Actually I will give you an added bonus:
Secret 4: Trade with the trend
That way you will have many more winners.
Using stops
Having got to that point novice traders are forced to use market stops because they rarely have the skill to use one of the many alternatives. But immediately trading becomes more complex, because you keep on getting stopped out! Unfortunately that is just one of the things traders have to get used to. Particularly so when the market triggers your stop and then goes off in the direction you intended. That will happen a lot as well!
Now to the practical problems of using stops. These come in a whole range of shapes and forms. Let’s start with the most simple human urge, as expressed in everyday life. When we see something we want, we grab it; when we see something we dislike, we often drive it from our minds – let’s forget about it, it will probably go away. In the real world this may not hurt too much, but in the markets, losses that are treated this way tend to get bigger. It is a basic human urge to ignore bad things, thus we are pre-programed not to take losses, but we are also pre-programedto take profits as soon as we see them. Think about your life so far and the way you live it. How easy do you think it would be to change some of your basic behavioral characteristics? Pretty tough? Well that is what you have to do to follow the first two simple rules.
Losses
Then there is the dear old ego. Guess what? Most of us do not like being wrong. Most of us associate losing money with being wrong. Guess what? We would rather avoid taking a loss, which will then probably get worse, than admit we might be wrong. Some traders talk about how much a novice trader is prepared to pay before admitting he is wrong. What is your price, $1000, $2000, $5000, or are you in the $100 000 category along with some others I know? Before starting to trade make sure you are happy being wrong a lot of the time – it might save you a fortune.
Most traders learn their lessons the hard way and learning to cut losses is usually the hardest of all because it is the most painful. Most traders admit to that one trade that went horribly wrong, and I suspect those that don’t admit it also experienced it. They just prefer to hide it away, maybe even from themselves. Far better to be open, especially with yourself.
Running profits
The second problem is the one mentioned above about wanting to grab nice things when we see them, when we want them. We have done that all our lives, now we have to change the habits of a lifetime. It is not easy, although some methodologies overcome these difficulties.
Another factor is relaxation. Humility and relaxation are as important in trading as are Money Management, Risk Control and the rest. If you are not relaxed then you will always be tempted to take action, taking action is the enemy of running profits.
Trading selectively
The third simple rule “Trade Selectivity” is simpler in concept but is the culmination of all the work you do as a trader. You are only going to become good at this once you have served your apprenticeship and become an expert.
Trading with the trend
Nor do I intend to say too much about trading with the trend. Indeed this is something of a truism. Trends tend to continue, that is what they do. Thus if you trade with it you are going to have much better odds in your favor. Of course there are different trends within every timescale. So first you must decide on your timescale. Then you must devise methods of entering trades. These must be low risk. Once positioned youshould stay with it until that trend changes, again according to your timescale. It’s really very simple, it’s just doing it that causes problems!
It is important to be aware of the practical and psychological problemsin following these rules, and to learn to overcome them.
Line Studies - Gann Grid
,
Gann Grid represents trends built at the angle of 45 degrees (Gann Lines). According to Gann’s concepts, a line having a slope of forty-five degrees represents a long-term trendline (ascending or descending). While prices are above the ascending line, the market holds bull direction. If prices hold below descending line, the market is characterized as a bear one. Intersection of the a Gann Line usually signals of breaking the basic trend. When prices go down to this line during an ascending trend, time and price become fully balanced. The further intersection of Gann Lines is an evidence of breaking of this balance and possible change of the trend.
Gann Grid represents trends built at the angle of 45 degrees (Gann Lines). According to Gann’s concepts, a line having a slope of forty-five degrees represents a long-term trendline (ascending or descending). While prices are above the ascending line, the market holds bull direction. If prices hold below descending line, the market is characterized as a bear one. Intersection of the a Gann Line usually signals of breaking the basic trend. When prices go down to this line during an ascending trend, time and price become fully balanced. The further intersection of Gann Lines is an evidence of breaking of this balance and possible change of the trend.Line Studies - Gann Fun
Lines of Gann Fan are built at different angles from an important base or peak at the price chart. The trend line of 1х1 was considered by Gann the most important. If the price curve is located above this line, it is the indication of the bull market, if it is below this line it is that of the bear market. Gann thought that the ray of 1x1 is a powerful support line when the trend is ascending, and he considered the breaking this line as an important turn signal. Gann emphasized the following nine basic angles, the angle of 1x1 being the most important of all:- 1х8 — 82.5 degree
- 1х4 — 75 degree
- 1х3 — 71.25 degree
- 1х2 — 63.75 degree
- 1х1 — 45 degree
- 2х1 — 26.25 degree
- 3х1 — 18.75 degree
- 4х1 — 15 degree
- 8х1 — 7.5 degree
The considered ratios of price and time increments to have corresponding angles of slope in degrees, X and Y axes must have the same scales. It means that a unit interval on X axis (i.e., hour, day, week, month) must correspond with the unit interval on Y axis. The simplest method of chart calibration consists in checking the angle of slope of the ray of 1х1: it must make 45 degrees.
Gann noted that each of the above-listed rays can serve as support or resistance depending on the price trend direction. For example, ray of 1x1 is usually the most important support line when the trend is ascending. If prices fall below 1х1 line, it means the trend turns. According to Gann, prices should then sink down to the next trend line (in this case, it is the ray of 2х1). In other words, if one of rays is broken, the price consolidation should be expected to occur near the next ray.
Line Studies - Gann Line
Gann Line represents a line drawn at the angle of 45 degrees. This line is also called "one to one" (1x1) what means one change of the price within one unit of time.According to Gann’s concept, the line having the slope of forty-five degrees represents a long-term trendline (ascending or descending). While prices are above the ascending line, the market holds bull directions. If prices hold below the descending line, the market is characterized as a bear one. Intersection of Gann Line usually signals of the basic trend break. When prices go down to this line during an ascending trend, time and price become fully balanced. The further intersection of Gann Line is the evidence of breaking of this balance and possible changing the trend.
2009年4月22日星期三
Trading Pyramid - Risk Control
The traders who win are those who minimize risk. Those who do not minimize risk inevitably pay the price and get wiped out.
It is for this reason that you often see strong moves after a news item is out of the way, often a news item suggesting a strong move in the opposite direction. The big traders, who got that way by minimizing risk in the first place, wait until the risk is at its lowest, when the news is out of the way.
Risk Control includes the following:
The market mechanism drives price from one extreme to the other. Once an extreme is reached price can only go one way.
Good news and bad news represent risk, but the market can provide excellent indications that an extreme may have been seen.
It is for this reason that you often see strong moves after a news item is out of the way, often a news item suggesting a strong move in the opposite direction. The big traders, who got that way by minimizing risk in the first place, wait until the risk is at its lowest, when the news is out of the way.
Risk Control includes the following:
- Not trading in too big a size, thus reducing the risk of a wipe out. Actually you should eliminate the risk of a wipe out.
- Not holding overnight unless you have a profit buffer in place. However this does not apply to particular methodologies seeking to take advantage of certain factors which may apply to holding overnight.
- Not holding over the weekend, subject to the same caveats as “2”above.
- Taking appropriate action prior to major new items. This means not normally opening positions, maybe reducing position size if already positioned – although it does depend on your trading objectives.
The market mechanism drives price from one extreme to the other. Once an extreme is reached price can only go one way.
Good news and bad news represent risk, but the market can provide excellent indications that an extreme may have been seen.
Trading Pyramid - Money Management
It is easy to demonstrate that Money Management (MM) is far more important than analysis. A total lack of MM would mean risking everything on any onetrade. You might have the best analysis system in the world and get 99 straight trades right but that 100th trade would wipe you out. On the other hand you might have the worst analysis system in the world. If so a proper MM system will quickly reveal this fact which at the same time minimizing the risk to your capital. So if you get 10 straight trades wrong you still only lose 10 per cent of your capital! It is therefore immediately clear which is the more important. MM is what makes the analysis/system work not the other way around.
The conclusion from this is that it is not entry which is that important – it is exit. This is clearly so, because exit determines your overall risk, your overall profit and your overall control. Now this is quite a controversial statement. If entry is not so important why do all traders spend so much time on it. The answer is because they are misguided. Clearly entry is also important, but not as important as the other factors in trading, in particular MM and Risk Control (RC). To put this in a nutshell: your entry cannot wipe you out – but the way you exit can. Your entry does not make you a profit – the way you exit can.
Money Management - It is my view that any one trade should not incur risk of more than 2 per cent.
Good Money Management is the key to success. Without it even the best trading system would wipe you out.
A good MM approach means adopting a low risk approach to each trade. If you don’t do that it is a racing certainty that you will be wipedout.
Starting with a new system you must use just one contract until your results, i.e. profits, prove that it works for real.
Early and careful monitoring of a new position can minimize risk even more, but don’t be suckered out prematurely.
The conclusion from this is that it is not entry which is that important – it is exit. This is clearly so, because exit determines your overall risk, your overall profit and your overall control. Now this is quite a controversial statement. If entry is not so important why do all traders spend so much time on it. The answer is because they are misguided. Clearly entry is also important, but not as important as the other factors in trading, in particular MM and Risk Control (RC). To put this in a nutshell: your entry cannot wipe you out – but the way you exit can. Your entry does not make you a profit – the way you exit can.
Money Management - It is my view that any one trade should not incur risk of more than 2 per cent.
Good Money Management is the key to success. Without it even the best trading system would wipe you out.
A good MM approach means adopting a low risk approach to each trade. If you don’t do that it is a racing certainty that you will be wipedout.
Starting with a new system you must use just one contract until your results, i.e. profits, prove that it works for real.
Early and careful monitoring of a new position can minimize risk even more, but don’t be suckered out prematurely.
Trading Pyramid - Discipline
Discipline is necessary because without it you will not be able to followyour methodology, or to control your emotions and instincts.
Developing discipline is a process rather like exercising muscles, but ishelped by developing an approach that suits us.
Random reinforcement is the way in which the market often rewards“bad” behavior and punishes “good behavior”. Rats go mad whentreated like this.
Inter-reactions between discipline and other levels of the Pyramid showthe importance of developing all levels of the Pyramid in line with ourpersonalities.
Developing discipline is a process rather like exercising muscles, but ishelped by developing an approach that suits us.
Random reinforcement is the way in which the market often rewards“bad” behavior and punishes “good behavior”. Rats go mad whentreated like this.
Inter-reactions between discipline and other levels of the Pyramid showthe importance of developing all levels of the Pyramid in line with ourpersonalities.
Trading Pyramid - Commitment
To many traders the market is a generator of random sequences. In many cases it will drive you round the bend. Commitment is a very necessary quality if you are going to be a winner.
The nature of the market
Whether the market is such a generator depends on your perception of the market. For example if you choose to trade the market on the basis of a precise algorithm, i.e. a precise formula such as used by stochastics, moving averages, etc., then you are dependent on exactly what the market throws at you. In this sense it is such a generator. If, however, you choose to look at something which has “meaning” then the market will not be solely such a generator. However, most of the chart patterns, etc. that are used are fairly meaningless. This is illustrated by two facts:
Markets are a manifestation of human psychology. They are driven by fear and greed. Peaks are driven by greed, troughs by fear. This is obvious in the very long-term extremes. Fear is often illustrated, literally, with blood in the street. Greed is so endemic nobody recognizes it for what it is. But stand aside and it becomes obvious. Not so obvious in the shorter term moves, but still there. At the extremes the key point is that price is stretched unrealistically. Why is this? Because traders and/or investors are paying too much, selling too cheaply, because it is an emotional decision. To win you must put yourself outside that emotion.
Different ways of looking at market action all serve to highlight someinformation; whilst minimizing or eliminating other elements.
Market Profile and Minus Development are ways of looking at the marketwhich have some meaning and may, therefore, prove more usefulthan other techniques.
The market is designed to generate trade and maximize it. This is afundamental fact it is always well to remember.
The nature of the market
Whether the market is such a generator depends on your perception of the market. For example if you choose to trade the market on the basis of a precise algorithm, i.e. a precise formula such as used by stochastics, moving averages, etc., then you are dependent on exactly what the market throws at you. In this sense it is such a generator. If, however, you choose to look at something which has “meaning” then the market will not be solely such a generator. However, most of the chart patterns, etc. that are used are fairly meaningless. This is illustrated by two facts:
- For something to have meaning it has to be right more than half the time. Strictly, the variance from the 50/50 criterion has to have statistical relevance.
- Very often, no sooner do we see a “pattern” than it aborts. It was never really there in the first place. It just so happens that the market, in its function as a generator of random sequences, is going to throw out all types of “pattern” but that does not mean that they have anymeaning.
Markets are a manifestation of human psychology. They are driven by fear and greed. Peaks are driven by greed, troughs by fear. This is obvious in the very long-term extremes. Fear is often illustrated, literally, with blood in the street. Greed is so endemic nobody recognizes it for what it is. But stand aside and it becomes obvious. Not so obvious in the shorter term moves, but still there. At the extremes the key point is that price is stretched unrealistically. Why is this? Because traders and/or investors are paying too much, selling too cheaply, because it is an emotional decision. To win you must put yourself outside that emotion.
Different ways of looking at market action all serve to highlight someinformation; whilst minimizing or eliminating other elements.
Market Profile and Minus Development are ways of looking at the marketwhich have some meaning and may, therefore, prove more usefulthan other techniques.
If it is not obvious whysomething should work, itprobably doesn’t!
The market is designed to generate trade and maximize it. This is afundamental fact it is always well to remember.
Financial Background - MiFID
The Markets in Financial Instruments Directive (MiFID) is a key component of the European Commission’s Financial Services Action Plan, which was launched in May 1999. It replaces and expands the 1993 Investment Services Directive (ISD), by introducing competition among different order-execution systems (regulated markets, Multilateral Trading Facilities (MTFs) and systematic internalisation) and setting out the legal framework to their operations.
While introducing a more open framework, the Directive seeks to improve investor protection, ensure efficient and transparent markets and enhance the means available to the competent authorities for supervising the activities of the different types of intermediaries.
The directive applies to all investment firms in the EU and impacts to a large extent all types of assets and especially shares admitted to trading on a regulated market in the EU.Its stated objectives include:
- Delivering harmonisation across European jurisdictions,
- Offering investors a high level of protection,
- Ensuring a high quality of execution,
- Providing a coherent and risk-sensitive framework for regulating order execution,
- Enhancing transparency on liquidity.
PERLS - Principal Exchange Rate- Linked Securities
A variation on a dual currency bond which pays both coupon and principal in the base currency, but the variable principal payment is set according to a redemption formula which links it to movements in currency exchange rates between the issue date and maturity. PERLS' principal payments increase as the foreign currency appreciates relative to the base currency and decrease as the foreign currency declines. Reverse Principal Exchange Rate-Linked Securities' (Reverse PERLS') principal payments increase as the base currency appreciates relative to the foreign currency and decrease as the base currency depreciates.
2009年4月21日星期二
Trading Pyramid - YOU
We lie loudest when we lie to ourselves. - By Eric Hoffer
There are many fundamental misconceptions about markets and trading. I have a natural talent for analysis. I wish I had more of a natural talent for trading, but I do not.
Essentials
- You may think that the market exists somewhere out there. Wrong. How you think of the market is unique and exists only in your head. To win you have to ensure that your version of the market is “useful” and then make use of it.
- You may think you see your version of the market clearly. Wrong. What you see is shrouded within an emotional whirlwind. The whirlwind may get a lot faster when you have a trading position in place.
- You may think that trading is an easy function involving buying low and selling high. Wrong. In fact trading is not difficult, although nor is it easy, but the emotional problems we bring with us to the market mean that few win.
In the trading environment there is no “absolute” truth.
Don’t be led by advertising copy, decide what you need and then goand get it.
There are seven simple rules to success
- Always limit your losses.
- Try to ensure that your average gain is at least 2.5 times your average loss.
- Endeavour to find an approach which gives you an edge.
- Make sure you are comfortable with your trading approach. This involves self discovery, something many shy away from. But peal away the outer layers and what is inside is often very fine indeed. The outward layers can be a bit yukky.
- Learn to let profits run.Learn to trade selectively.
- Learn to control your own self sabotage.
Trade Stages - The Trade Path
STARTS OFF “greed orientated.”
Loses because:
1 Market problems
Loses because:
1 Market problems as above
2 Scared money never wins
3 Own problems
This is when they start to make money because they:
1 Develop a methodology which give them an edge
2 Use an effective Money Management system
3 Develop the discipline to follow their methodology
4 Erase “harmful” personality traits
Loses because:
1 Market problems
- Not a zero sum game, a “very negative” sum game
- Market psychology – doing the wrong thing at the wrong time
- The majority is always wrong
- Market exists on chaos and confusion
- Overtrading
- No knowledgec No discipline
- No protection against market psychology
- Random action through uncertainty, broker’s advice for example
- Market views.
Loses because:
1 Market problems as above
2 Scared money never wins
3 Own problems
- Still overtrading – derivatives
- Fear brings on what it fears
- Tries to cut losses too tight creating more losses
- Still no real understanding of what it takes.
This is when they start to make money because they:
1 Develop a methodology which give them an edge
2 Use an effective Money Management system
3 Develop the discipline to follow their methodology
4 Erase “harmful” personality traits
Trade Stages - Risk Orientation
To become risk orientated we must make progress on all fronts. Knowing ourselves, changing as need be, understanding the trading process better, adjusting our trading methodology to suit ourselves, learning to relax when trading; these are a few of the necessary requirements. Most people should immediately at least halve their trading size and that can bring immediate relief/relaxation.
Risk orientation gets its name because you need to understand risk in order to win. Trading is a risk business, when you become risk orientated your orientation is right for the market.The key trading secret at this point is letting profits run. It is at this point that you may start to make consistent profits in the market. Before you reach that stage you should never trade more than the minimum size, i.e. one contract. Why pay more in tuition fees than you need?
Once risk orientated you may learn the final trading secret, trade selectivity. Once you have that down pat it can all become less exciting. I make money consistently but I still find myself occasionally taking too many trades. To master trade selectivity you have to become an expert in your chosen approach. The key aspect of your approach is that you filter out a vast amount of market information and just focus on those factors which you need to know. It is a lot easier becoming expert in a narrowfield than a wide one. The various sources of market information are so vast that it is not possible to take it all in. Let alone become an expert in it. You must decide what information you want, design your approach and then use it. Become an expert and you will find that you become intuitive, that is when you can select only the best trading positions, the low risk ones. Then it will all go the right way.
Risk orientation gets its name because you need to understand risk in order to win. Trading is a risk business, when you become risk orientated your orientation is right for the market.The key trading secret at this point is letting profits run. It is at this point that you may start to make consistent profits in the market. Before you reach that stage you should never trade more than the minimum size, i.e. one contract. Why pay more in tuition fees than you need?
Once risk orientated you may learn the final trading secret, trade selectivity. Once you have that down pat it can all become less exciting. I make money consistently but I still find myself occasionally taking too many trades. To master trade selectivity you have to become an expert in your chosen approach. The key aspect of your approach is that you filter out a vast amount of market information and just focus on those factors which you need to know. It is a lot easier becoming expert in a narrowfield than a wide one. The various sources of market information are so vast that it is not possible to take it all in. Let alone become an expert in it. You must decide what information you want, design your approach and then use it. Become an expert and you will find that you become intuitive, that is when you can select only the best trading positions, the low risk ones. Then it will all go the right way.
Trade Stages - Fear Orientation
When the trader has realized that trading is not easy and that a lot of hard work is required, they possibly move to fear orientation stage. Fear orientation is inevitable given the nature of the beast, i.e. the human being. The market is not terrifying, or bad, or difficult. It just is what it is, and it gets on with its own business. It is how we perceive the market and how we act that causes theproblems. We must realize that we are responsible for our results, nobody else, least of all the market itself. It is only when we accept responsibility that we can start to win. If our losses are someone else’s fault then we are in effect saying that we have no control. If we have no control how can we win?
This stage can last a long time as we work out our various problems. Fear is not helpful in the markets because scared money never wins. We cut losers too quickly and we take profits too quickly. Our trading is characterized by nervous, over quick, action.
This stage can last a long time as we work out our various problems. Fear is not helpful in the markets because scared money never wins. We cut losers too quickly and we take profits too quickly. Our trading is characterized by nervous, over quick, action.
Trade Stages - Greed Orientated
This stage is characterized by ignorance and the thought that the markets will provide “easy money.” The actual emotion driving the new trader may not be greed, indeed it is often something else. A successful businessman or professional may be seeking a new challenge. Similar individuals may just be a little bored with their lifestyle and want something to spice it up. Others may be compulsive gamblers. One of the first problems facing a new trader is the very motivation to trade. Most people do most things emotionally. The decision as to which car to buy, which holiday to go on, etc. is usually based on emotional criteria. Just think why you own the car you do, why you married (or did not) the person you did (or did not). It is no surprise we come to the market and continue to make emotional decisions. But these will not work in the market because the market is an emotional animal itself and when the emotion is screaming sell, the successful trader is more likely to be buying. If we think about traders who are in the market to relieve boredom it becomes clear that the strongest impulse to trade will come when theyare most bored. There is no reason why this emotional point should correspond with a good time to trade the markets. Other traders suffer from self-esteem problems, indeed I think we all do from time to time. If so, an argument with another person can again set the trader up for taking a position, to counterbalance the low self-esteem.
All these problems have to be dealt with before a trader can find success and, in my opinion, the only way in which the trader can “see” himself(or herself) is by using a fairly mechanical “system” so that he(or she) knows what should be doing. In this way the trader can begin to see when his(or her) actions do not correspond to the system and start to question why this should be. It is through this process that we can begin to understand ourselves. I believe that this is a key requirement for trading success.
Because of these and other problems, as outlined above, novice traders lose a sufficient amount of cash to cause pain, many (most?) lose all their cash. The key point is that they become fearful as a result. At the same time they begin to realize the first secret of trading: cut your losses. It is this concept which marks the move to fear orientation. Indeed cutting losses can be seen as a reaction to fear.
All these problems have to be dealt with before a trader can find success and, in my opinion, the only way in which the trader can “see” himself(or herself) is by using a fairly mechanical “system” so that he(or she) knows what should be doing. In this way the trader can begin to see when his(or her) actions do not correspond to the system and start to question why this should be. It is through this process that we can begin to understand ourselves. I believe that this is a key requirement for trading success.
Because of these and other problems, as outlined above, novice traders lose a sufficient amount of cash to cause pain, many (most?) lose all their cash. The key point is that they become fearful as a result. At the same time they begin to realize the first secret of trading: cut your losses. It is this concept which marks the move to fear orientation. Indeed cutting losses can be seen as a reaction to fear.
Trade - The Trading Pyramid
When we enter the trading arena we enter an environment unlike anywhereelse.
The rules we live by in every day life do not work in the market environment.
We need to construct a separate trading “personality” to succeed in the markets. This personality must learn much greater control over the emotions.
The Trading Pyramid provides the necessary framework for this personality. Each of us will seek a different trading personality, making the most of our strengths and minimizing our weaknesses.
The Trading Pyramid has the following levels:
Trade what you see, not what you think.
The rules we live by in every day life do not work in the market environment.
We need to construct a separate trading “personality” to succeed in the markets. This personality must learn much greater control over the emotions.
The Trading Pyramid provides the necessary framework for this personality. Each of us will seek a different trading personality, making the most of our strengths and minimizing our weaknesses.
The Trading Pyramid has the following levels:
- YOU
- Commitment
- Discipline
- Money management
- Risk control
- The three simple rules(cut your losses;run your profits; trade selectivity)
- System parameters
- Your system/methodology
- Operation
- Profits/losses
Trade what you see, not what you think.
2009年4月20日星期一
Technique Background - Fibonacci search technique
Background
The Fibonacci search technique is a method of searching a sorted array using a divide and conquer algorithm that narrows down possible locations with the aid of Fibonacci numbers. Compared to binary search, Fibonacci search has the property of examining locations whose addresses have lower dispersion. Therefore, when the elements being searched have non-uniform access memory storage (i.e., the time needed to access a storage location varies depending on the location previously accessed), the Fibonacci search has an advantage over binary search in slightly reducing the average time needed to access a storage location. The typical example of non-uniform access storage is that of a magnetic tape, where the time to access a particular element is proportional to its distance from the element currently under the tape's head. Note, however, that large arrays not fitting in cache or even in RAM can also be considered as non-uniform access examples. Fibonacci search has a complexity of O(log(x)).
Algorithm
Let k be defined as an element in F, the array of Fibonacci numbers. n = Fm is the array size. If the array size is not a Fibonacci number, let Fm be the smallest number in F that is greater than n.
The array of Fibonacci numbers is defined where Fk+2 = Fk+1 + Fk, when k ≥ 0, F1 = 1, and F0 = 0.
To test whether an item is in the list of ordered numbers, follow these steps:
The Fibonacci search technique is a method of searching a sorted array using a divide and conquer algorithm that narrows down possible locations with the aid of Fibonacci numbers. Compared to binary search, Fibonacci search has the property of examining locations whose addresses have lower dispersion. Therefore, when the elements being searched have non-uniform access memory storage (i.e., the time needed to access a storage location varies depending on the location previously accessed), the Fibonacci search has an advantage over binary search in slightly reducing the average time needed to access a storage location. The typical example of non-uniform access storage is that of a magnetic tape, where the time to access a particular element is proportional to its distance from the element currently under the tape's head. Note, however, that large arrays not fitting in cache or even in RAM can also be considered as non-uniform access examples. Fibonacci search has a complexity of O(log(x)).
Algorithm
Let k be defined as an element in F, the array of Fibonacci numbers. n = Fm is the array size. If the array size is not a Fibonacci number, let Fm be the smallest number in F that is greater than n.
The array of Fibonacci numbers is defined where Fk+2 = Fk+1 + Fk, when k ≥ 0, F1 = 1, and F0 = 0.
To test whether an item is in the list of ordered numbers, follow these steps:
- Set k = m.
- If k = 0, stop. There is no match; the item is not in the array.
- Compare the item against element in Fk-1.
- If the item matches, stop.
- If the item is less than entry Fk-1, discard the elements from positions Fk-1 + 1 to n. Set k = k - 1 and return to step 2.
- If the item is greater than entry Fk-1, discard the elements from positions 1 to Fk-1. Renumber the remaining elements from 1 to Fk-2, set k = k - 2, and return to step 2.
Line Studies - Fibonacci Channel
Fibonacci Channels are built using several parallel trend lines. To build this instrument, the channel having the width taken as a unit width is used. Then, parallel lines are drawn at the values equal to the Fibonacci Numbers, beginning with 0.618-fold size of the channel, then 1.000-fold, 1.618-fold, 2.618-fold, 4.236-fold, etc. As soon as the fifth wave finishes, correction in the direction opposite to the trend can be expected.It is necessary to remember for a correct Fibonacci Channel building: base line limits the upper part of the channel when trend is ascending, and the lower part of it when trend is descending.
Line Studies - Fibonacci Expansion
Fibonacci Expansion is largely similar to Fibonacci Retracement and intended for determining of the end of the third wave. Unlike Fibonacci Retracement, this instrument is built not on the only one trend line, but on two waves.First, the line of the first wave is drawn, its height will be considered as a unit interval later on. The end of the second wave serves as a reference point for building an invisible vertical line. The corresponding lines are drawn from the reference point on the interval equal to 61.8, 100%, and 161.8 per cent of the unit interval. The third wave is considered to finish near these levels.
Line Studies - Fibonacci Time Zones
Fibonacci Time Zones is a sequence of vertical lines having Fibonacci intervals of 1, 2, 3, 5, 8, 13, 21, 34, etc. Significant price changes are considered to be expected near these lines.To build this instrument, it is necessary to specify two points to determine the length of a unit interval. All other lines are built on base of this unit interval according to Fibonacci Numbers.
Line Studies - Fibonacci Retracement
Fibonacci Retracement are built as follows: first, a trend line is built between two extreme points, for example, from the trough to the opposing peak. Then, nine horizontal lines intersecting the trend line at Fibonacci levels of 0.0, 23.6, 38.2, 50, 61.8, 100, 161.8, 261.8, and 423.6 per cent are drawn. After a significant rise or decline, prices often return to their previous levels correcting an essential part (and sometimes completely) of their initial movement. Prices often face support/resistance at the level of Fibonacci Retracements or near them in the course of such a reciprocal movement.
【转】 Today's Sun/Oracle AnnouncementSender
Subject: Today's Sun/Oracle AnnouncementSender: "Jonathan I. Schwartz" Date:2009/04/20 19:35
*Today's Sun/Oracle Announcement*
This is one of the toughest emails I've ever had to write.
It's also one of the most hopeful about Sun's future in the industry.
For 27 years, Sun has stood for courage, innovation, a willingness to blaze trails, to envision and engineer the future. No matter our ups and downs, we've remained committed to those ideals, and to the RD that's allowed us to differentiate. We've committed to decade long pursuits, from the evolution of one of the world's most powerful datacenter operating systems, to one of the world's most advanced multi-core microelectronics. We've never walked away from the wholesale reinvention of business models, the redefinition of technology boundaries or the pursuit of new routes to market.
Because of the unparalleled talent at Sun, we've also fueled entire industries with our people and technologies, and fostered extraordinary companies and market successes. Our products and services have driven the discovery of new drugs, transformed social media, and created a better understanding of the world and marketplace around us. All, while we've undergone a near constant transformation in the face of a rapidly changing marketplace and global economy. We've never walked away from a challenge - or an opportunity.
So today we take another step forward in our journey, but along a different path - by announcing that this weekend, our board of directors and I approved the acquisition of Sun Microsystems by the Oracle Corporation for $9.50/share in cash. All members of the board present at the meeting to review the transaction voted for it with enthusiasm, and the transaction stands to utterly transform the marketplace - bringing together two companies with a long history of working together to create a newly unified vision of the future.
Oracle's interest in Sun is very clear - they aspire to help customers simplify the development, deployment and operation of high value business systems, from applications all the way to datacenters. By acquiring Sun, Oracle will be well positioned to help customers solve the most complex technology problems related to running a business.
To me, this proposed acquisition totally redefines the industry, resetting the competitive landscape by creating a company with great reach, expertise and innovation. A combined Oracle/Sun will be capable of cultivating one of the world's most vibrant and far reaching developer communities, accelerating the convergence of storage, networking and computing, and delivering one of the world's most powerful and complete portfolios of business and technical software.
I do not consider the announcement to be the end of the road, not by any stretch of the imagination. I believe this is the first step down a different path, one that takes us and our innovations to an even broader market, one that ensures the ubiquitous role we play in the world around s. The deal was announced today, and, after regulatory review and shareholder approval, will take some months to close - until that close occurs, however, we are a separate company, operating independently. No matter how long it takes, the world changed starting today.
But it's important to note it's not the acquisition that's changing the world - it's the people that fuel both companies. Having spent a considerable amount of time talking to Oracle, let me assure you they are single minded in their focus on the one asset that doesn't appear in ur financial statements: our people. That's their highest priority - creating an inviting and compelling environment in which our brightest minds can continue to invent and deliver the future.
Thank you for everything you've done over the years, and for everything you will do in the future to carry the business forward. I'm incredibly proud of this company and what we've accomplished together.
Details will be forthcoming as we work together on the integration planning process.
*Additional Information and Where to Find It*
Sun plans to file with the Securities and Exchange Commission (the "SEC") and mail to its stockholders a proxy statement in connection with the proposed merger with Soda Acquisition Corporation, pursuant to which un would be acquired by Oracle Corporation (the "Merger"). The proxy statement will contain important information about the proposed Merger and related matters. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE. Investors and stockholders will be able to obtain free copies of the proxy statement nd other documents filed with the SEC by Sun through the web site maintained by the SEC at http://www.sec.gov. In addition, investors and stockholders will be able to obtain free copies of the roxy statement from Sun by contacting Investor Relations by telephone at (800) 801-7869 (within the U.S.) or (408) 404-8427 (outside the U.S.), or by mail at Sun Microsystems, Inc., Investor Relations, Mail Stop UMPK14-336, 4150 Network Circle, Santa Clara, California 95054, USA.
Sun and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Sun in connection with the proposed Merger. Information regarding the interests of these directors and executive officers in the transaction escribed herein will be included in the proxy statement described above. Additional information regarding these directors and executive officers is also included in Sun's proxy statement for its 2008 Annual Meeting of Stockholders, which was filed with the SEC on September 24, 2008. This document is available free of charge at the SEC's web site at http://www.sec.gov, and from Sun by contacting Investor Relations by telephone at (800) 801-7869 (within the U.S.) or (408) 404-8427 (outside the U.S.), or by mail at Sun Microsystems, Inc., Mail Stop UMPK14-336, 4150 Network Circle, Santa Clara, California 95054, USA, or by going to Sun's Investor Relations page on its corporate web site at http://www.sun.com.
*Note on Forward-Looking Statements*
This communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to, tatements regarding the expected benefits and closing of the proposed Merger. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements, including, but not imited to, the ability of the parties to consummate the proposed Merger, satisfaction of closing conditions precedent to the consummation of the proposed Merger, the ability of Oracle Corporation to successfully integrate Sun's operations and employees, the ability to realize anticipated synergies and cost savings of the proposed Merger, and such other risks as identified in Sun's Annual Report on Form 10-K for the fiscal year ended June 30, 2008, and Sun's most recent Quarterly Reports on Form 10-Q, each as filed with the SEC, which contain and dentify important factors that could cause the actual results to differ materially from those contained in the forward-looking statements. Sun assumes no obligation to update any forward-looking statement contained in this communication.
*Today's Sun/Oracle Announcement*
This is one of the toughest emails I've ever had to write.
It's also one of the most hopeful about Sun's future in the industry.
For 27 years, Sun has stood for courage, innovation, a willingness to blaze trails, to envision and engineer the future. No matter our ups and downs, we've remained committed to those ideals, and to the RD that's allowed us to differentiate. We've committed to decade long pursuits, from the evolution of one of the world's most powerful datacenter operating systems, to one of the world's most advanced multi-core microelectronics. We've never walked away from the wholesale reinvention of business models, the redefinition of technology boundaries or the pursuit of new routes to market.
Because of the unparalleled talent at Sun, we've also fueled entire industries with our people and technologies, and fostered extraordinary companies and market successes. Our products and services have driven the discovery of new drugs, transformed social media, and created a better understanding of the world and marketplace around us. All, while we've undergone a near constant transformation in the face of a rapidly changing marketplace and global economy. We've never walked away from a challenge - or an opportunity.
So today we take another step forward in our journey, but along a different path - by announcing that this weekend, our board of directors and I approved the acquisition of Sun Microsystems by the Oracle Corporation for $9.50/share in cash. All members of the board present at the meeting to review the transaction voted for it with enthusiasm, and the transaction stands to utterly transform the marketplace - bringing together two companies with a long history of working together to create a newly unified vision of the future.
Oracle's interest in Sun is very clear - they aspire to help customers simplify the development, deployment and operation of high value business systems, from applications all the way to datacenters. By acquiring Sun, Oracle will be well positioned to help customers solve the most complex technology problems related to running a business.
To me, this proposed acquisition totally redefines the industry, resetting the competitive landscape by creating a company with great reach, expertise and innovation. A combined Oracle/Sun will be capable of cultivating one of the world's most vibrant and far reaching developer communities, accelerating the convergence of storage, networking and computing, and delivering one of the world's most powerful and complete portfolios of business and technical software.
I do not consider the announcement to be the end of the road, not by any stretch of the imagination. I believe this is the first step down a different path, one that takes us and our innovations to an even broader market, one that ensures the ubiquitous role we play in the world around s. The deal was announced today, and, after regulatory review and shareholder approval, will take some months to close - until that close occurs, however, we are a separate company, operating independently. No matter how long it takes, the world changed starting today.
But it's important to note it's not the acquisition that's changing the world - it's the people that fuel both companies. Having spent a considerable amount of time talking to Oracle, let me assure you they are single minded in their focus on the one asset that doesn't appear in ur financial statements: our people. That's their highest priority - creating an inviting and compelling environment in which our brightest minds can continue to invent and deliver the future.
Thank you for everything you've done over the years, and for everything you will do in the future to carry the business forward. I'm incredibly proud of this company and what we've accomplished together.
Details will be forthcoming as we work together on the integration planning process.
*Additional Information and Where to Find It*
Sun plans to file with the Securities and Exchange Commission (the "SEC") and mail to its stockholders a proxy statement in connection with the proposed merger with Soda Acquisition Corporation, pursuant to which un would be acquired by Oracle Corporation (the "Merger"). The proxy statement will contain important information about the proposed Merger and related matters. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE. Investors and stockholders will be able to obtain free copies of the proxy statement nd other documents filed with the SEC by Sun through the web site maintained by the SEC at http://www.sec.gov. In addition, investors and stockholders will be able to obtain free copies of the roxy statement from Sun by contacting Investor Relations by telephone at (800) 801-7869 (within the U.S.) or (408) 404-8427 (outside the U.S.), or by mail at Sun Microsystems, Inc., Investor Relations, Mail Stop UMPK14-336, 4150 Network Circle, Santa Clara, California 95054, USA.
Sun and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Sun in connection with the proposed Merger. Information regarding the interests of these directors and executive officers in the transaction escribed herein will be included in the proxy statement described above. Additional information regarding these directors and executive officers is also included in Sun's proxy statement for its 2008 Annual Meeting of Stockholders, which was filed with the SEC on September 24, 2008. This document is available free of charge at the SEC's web site at http://www.sec.gov, and from Sun by contacting Investor Relations by telephone at (800) 801-7869 (within the U.S.) or (408) 404-8427 (outside the U.S.), or by mail at Sun Microsystems, Inc., Mail Stop UMPK14-336, 4150 Network Circle, Santa Clara, California 95054, USA, or by going to Sun's Investor Relations page on its corporate web site at http://www.sun.com.
*Note on Forward-Looking Statements*
This communication contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to, tatements regarding the expected benefits and closing of the proposed Merger. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements, including, but not imited to, the ability of the parties to consummate the proposed Merger, satisfaction of closing conditions precedent to the consummation of the proposed Merger, the ability of Oracle Corporation to successfully integrate Sun's operations and employees, the ability to realize anticipated synergies and cost savings of the proposed Merger, and such other risks as identified in Sun's Annual Report on Form 10-K for the fiscal year ended June 30, 2008, and Sun's most recent Quarterly Reports on Form 10-Q, each as filed with the SEC, which contain and dentify important factors that could cause the actual results to differ materially from those contained in the forward-looking statements. Sun assumes no obligation to update any forward-looking statement contained in this communication.
2009年4月18日星期六
Line Studies - Fibonacci Fun
Fibonacci Fan as a line instrument is built as follows: a trend line — for example from a trough to the opposing peak is drawn between two extreme points. Then, an "invisible" vertical line is automatically drawn through the second extreme point. After that, three trend lines intersecting this invisible vertical line at Fibonacci levels of 38.2, 50, and 61.8 percent are drawn from the first extreme point.
These lines are considered to represent support and resistance levels. For getting a more precise forecast, it is recommended to use other Fibonacci instruments along with the Fan.
Line Studies - Fibonacci Arcs
Fibonacci Arcs are built as follows: first, the trend line is drawn between two extreme points, for example, from the trough to the opposing peak. Then three arcs are built having their centers in the second extreme point and intersecting the trend line at Fibonacci levels of 38.2, 50, and 61.8 per cent.
Fibonacci arcs are considered to be potential support and resistance levels. Fibonacci Arcs and Fibonacci Fans are usually plotted together on the chart, and support and resistance levels are determined by the points of intersection of these lines.
It should be noted that the points of intersection of Arcs and the price curve can change depending on the chart scale since an arc is a part of a circumference, and its form is always the same.
Testing Manager - Create a service culture
Project teams develop software in order to provide benefits to customers. The customers might be in-house or external, paying or nonpaying. The customers might be the same people as the developers.
Testers provide services to the overall project. A typical service is finding and reporting bugs. Other services depend on your group's mission.
One of the fundamental issues running through the testing literature and the testing subculture is whether your role is primarily service or control:
Testers provide services to the overall project. A typical service is finding and reporting bugs. Other services depend on your group's mission.
One of the fundamental issues running through the testing literature and the testing subculture is whether your role is primarily service or control:
- A service provider controls the quailty and relevance of the services he provides to the larger effort to develop the end result. We provide excellent services to people who need them.
- A service provider does not control the quality of the end product, does not control the processes used by other service providers (programmers, writers, marketers), and does not approve or deny approval of the release provides services to the project manager.
Testing Manager - you manage the subproject that provides testing service, not the development project
The testing effort is a sub-project of the overall project. You apply resources and deliver services. You have a lot of control over how the testing project is run, and you should choose your style as carefully as you might wish the project manager had chosen his.
Somtimes project managers make mistakes, and sometimes they can benefit from your advice. By all means, offer it. Speak your mind. But the final decision on how to run the project is the project manager's. If he doesn't take your advice, so be it.
I don't want to write much in this post about the human issues involved in managing people under stress. For now, we'll note that when project managers and executives make bad decisions, they sometimes subject testers to verbal abuse, demands for excessive overtime, and demands to compromise their integrity. This is not within the project manager's reasonable scope of authority. As a test manager, an important part of your job is to protect your staff from abuse.
Somtimes project managers make mistakes, and sometimes they can benefit from your advice. By all means, offer it. Speak your mind. But the final decision on how to run the project is the project manager's. If he doesn't take your advice, so be it.
I don't want to write much in this post about the human issues involved in managing people under stress. For now, we'll note that when project managers and executives make bad decisions, they sometimes subject testers to verbal abuse, demands for excessive overtime, and demands to compromise their integrity. This is not within the project manager's reasonable scope of authority. As a test manager, an important part of your job is to protect your staff from abuse.
Speed the development process instead of trying to save a few dollars on testing
Test automation efforts aimed at reducing testing costs rarely get attention and cooperation they need ensure success.
If you want support, focus your efforts on reducing the risk of development failure.
Test cases are powerful to the extent that they help you and your team gain useful by information about the system being tested. Automated testing adds power by helping you gather and disseminate information quickly, to give programmers fast feedback. The most successful companies automate testing to enhance their development flexibility. Some of the goals of their efforts are to:
Here are two examples of techniques for supporting the pace of development.
These kinds of automated tests take time, effort, skill, and money to create. The unit tests will probably be created by the programmers, although you might encourage and speed that effort by writing the code with them as half of a programming pair. With these kinds of benefits, you'll have a far easier time securing the copperation you'll need than if you were to simply focus on saving manual testing time.
If you want support, focus your efforts on reducing the risk of development failure.
Test cases are powerful to the extent that they help you and your team gain useful by information about the system being tested. Automated testing adds power by helping you gather and disseminate information quickly, to give programmers fast feedback. The most successful companies automate testing to enhance their development flexibility. Some of the goals of their efforts are to:
- Quickly detect destabilizing changes in new builds.
- Expose regression bugs as quickly as possible.
- Report problems quickly, bucause this makes fixing easier.
Here are two examples of techniques for supporting the pace of development.
- Automated smoke tests. The phrase "smoke test" comes from hardware testing. You plug in a new board and turn on the power. If you see smoke coming from the board, turn off the power. You don't have to do any more testing. Smoke tests broadly cover product features in a limited time - typically over lunch or overnight. If key features don't work or if key bugs haven't yet been fixed, your team won't waste further time installing or testing the build. Getting it fixed becomes the programmers' top priority.
- Automated unit tests. These tests also streamline a development process, prevent backtracking, and maintain development momentum. These are larger sets of tests that focus on testing the low-level functions and classes of your product.
These kinds of automated tests take time, effort, skill, and money to create. The unit tests will probably be created by the programmers, although you might encourage and speed that effort by writing the code with them as half of a programming pair. With these kinds of benefits, you'll have a far easier time securing the copperation you'll need than if you were to simply focus on saving manual testing time.
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