The Motley Fool Discussion Boards

Previous Page

Investing Strategies / Options Beginners


Subject:  Re: Building a Predictor for Direction Date:  10/31/2019  10:33 PM
Author:  Arindam Number:  1562 of 1582


I agree on the attractiveness of shorter-term trades. My options instructors advised always buying enough time for the trade to work and suggested 30-40 days, which would also somewhat mitigate time decay. However, my technical tools aren't setup to make those kinds of long-term predictions.

Explanation: Although Japanese candlesticks have all but replaced Western-style OHLC bars, the two formats aren't interchangeable. As developed Munehisa Homma (in the mid 1800's?) for trading rice futures, they were meant to be used only and solely for EOM pricing and for understanding the dynamics of buyers and sellers in time frames of under 10 days. Thus, this distinction must be made. 'Candlesticks' is a charting format. 'Candle Pattern Analysis' (CPA) is a trading discipline that most in the West don't understand or know how to use effectively. Steve Nissan --credited with introducing candlesticks to the West-- is a crap trader. Greg Morris, OTOH, is worth reading and learning from.

Morris paired with programmer, Norm North, and explored the effectiveness of combining CPA with western-style technical indicators, which coincides with my interests as well. Norm marketed several versions of his program, and his son tried to carry on after his death. But both have disappeared so completely that even a Google search turns up nothing on them, which is a real shame. The latter versions of the program are robust and far easier to use than the usual suspects --MetaStock, etc.-- to find trading candidates.

Yeah, COW would be "news trade", and not my thing, and I'm glad I escaped my cotton trade without a haircut.

Copyright 1996-2022 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us