Riding the wave and then… splash!

Following my previous post, I would like to point out that approaching the a.i. advisory, you have to change your mind. With most probability, you are trained in technical analysis, various techniques to train your eye and numbers to correlate the stream of data. With an extended application to chart reading and some discipline, it’s not hard to avoid largest mistakes and trade with some results.

What happens is that your carefully brewed technique, a certain day, blows up. You where riding the wave and … splash! All technical analysis let you ride one wave, if well set up, but you are bound to splash as soon as the new wave comes in.

Try to experiment with volatility and then you begin to see how impredictable are the consequences of human behavior. And that is just one dimension. So, if you are so expert to radically change your trading attitude and timely, no need to read further.

I have to say, I’m not in the group. I tend to stick to that particular solution and trust and be deluded. And lose money. I do not really trade with t.a. any more, except a minimal account where I experiment and keep updated the relation from the a.i. model output and t.a. charting. There, I trade using the a.i. daily forecast as a long term preview and I use a 2h bars chart with my beloved modified DMI plus Parabolic and Hi-Lo Activator. In other word, these are momentum and stops. I activate them manually, but following indicators notifications. Shaking all information, it’s not hard to catch good opportunities, always in the direction of predominant trend. If in doubt, stay out. The account is growing.

So, if the use of a robo-advisor is in your future, prepare to radically change your trading and investing behaviour. Sit down, try to imagine all the things that you can do in your spare time and start. Yes, you will have a lot of spare time, embarrassing lots. You need to fill that time and with periodicity, every day, or even every week, maybe every 4 hours? (it will depend on the advisory you will adopt, there are many around, they are popping out massively), you will just peep, take note and check and take few, very few triggering decisions. Than, fast back to your gardening, to your fitness training, to your passion with motors, to reading as there is no tomorrow. In my spare time, I develop the spxbot a.i. engine and this website.

Just a final note: anytime I tried to use t.a. indicators (and I tried many) inside the model, the result were disastrous. The one dimensional constraint that they introduce conflicts with network correlation ability. In effect, I’ve earned from my really first experiments in neural networks modelling with BrainMaker down in the late ’80s, neural networks work good with the data as raw as possible. Any transformation introduces a field of possible wrong solutions and divergencies proliferate. The neural networks do not need to be perfect, they need to see just a little bit better than you and to discriminate using details that you cannot even imagine exist. That’s not perfection, that’s sharpness.

Keep in touch.


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