Archive for Time Map
Answering a question from our reader – Would using multiple criteria like combining the condition of close greater than or equal to pivot (PP) and the condition of close greater than or equal to volume weighted average price (VWAP) produce stronger bias than the basic time map method?
Here is the setup of the experiment,
- 3 filtering conditions (a) close >= pivot (b) close >= typical price (c) close >= volume weighted average price
- looking for the percentage of next trading days making higher high given one or more of the conditions mentioned
- pivot is defined as the average of high, low and close from previous trading day
- typical price is defined as the average of high, low and close from current trading day
One of my favorite daily level Time Map patterns is that Emini S&P dropped for 2 days significantly. It provides something so consistent to work with over the years you have to wonder why no one talks about it at all.
Some time ago I wrote an article titled The Black Swan that explains the fundamental problem with buy-and-hold strategy when applied onto stock market. This time we are going to take a look at the first of several strategies that can beat buy-and-hold strategy hands down in terms of better risk control and capital deployment.