Speaking Later at 4:30pm TODAY

Transcription

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2 Speaking Later at 4:30pm TODAY I Will Be In OCTAVIUS at 3:30p Will Actually Show You How to Make a Million Dollars specifically in fact $2Million I use TradeStation, G Navigator, MetaStock Will tell you why I m using MultiCharts now Will Show you some of the Magic of MultiCharts Called Haps & Hazards of Backtesting will also reveal secrets of successful system discovery & design Will preview my newest book Grading the Gurus AND, will give 60% OFF and then 10% OFF of that, for SHOW PRICE on my products

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4 Who the heck am I? Just call me Sunny, forget the Dr. part Next the short version of my credentials

5 My Credentials Sunny J. Harris BA, MS, PhD Mathematics (Applied & Theoretical) Trading since 1981 (30 years) #1 Rated trader by Stark Research 2 years in a row (365% & 178%) Research: Programming & Testing since 1981 Teaching others to trade since for MultiCharts

6 My Books: 1. Trading 101 How to Trade Like a Pro 2. Trading 102 Getting Down to Business 3. Electronic Day Trading Getting Started in Trading 5. Going Vegan! 6. TradeStation Made Easy! 7. Grading the Gurus and more after that for MultiCharts

7 Created & Published Int l Magazine 8 years in publication Funded primarily through my trading profits ½ Yellow Pages, ½ Editorial

8 Other Credentials Numerous articles in Stocks & Commodities, Futures, Active Trader, Traders World, & Omega Magazine Numerous Speaking Engagements World- Wide Regular Television Appearances on KWHY in Los Angeles w Richard Saxton

9 Last 8 Years in 2 nd Retirement Raising my grandsons Now they are older & my daughter s back And, I m coming back! Just released TradeStation Made Easy! Now working on Grading the Gurus

10 Here s a glimpse of the Million Dollars $2,034,715 trading ^RUT

11 That s all I m going to say for Now If you want to hear more And learn about MultiCharts at the same time Come to Octavius at 3:30 pm TODAY. And now, over to the MultiCharts folks Jeff Jenkins

12 Haps & Hazards of Back-Testing Finding & Testing Profitable Trading Systems with for MultiCharts Sunny Harris Enterprises, Inc.

13 Presentation

14 Remember Trading is not for everyone. It is a risky endeavor, but it can be very rewarding. Only trade money you are willing to lose. Paper trade any new system for at least 6 weeks after testing.

15 My Credentials Sunny J. Harris BA, MS, PhD Mathematics (Applied & Theoretical) Trading since 1981 (30 years) #1 Rated trader by Stark Research 2 years in a row (365% & 178%) Research: Programming & Testing since 1981 Teaching others to trade since for MultiCharts

16 Created & Published Int l Magazine 8 years in publication Funded primarily through my trading profits ½ Yellow Pages, ½ Editorial

17 My Books: 1. Trading 101 How to Trade Like a Pro 2. Trading 102 Getting Down to Business 3. Electronic Day Trading Getting Started in Trading 5. Going Vegan! w Linda Blair 6. TradeStation Made Easy! 7. Grading the Gurus and more after that for MultiCharts

18 Other Credentials Numerous articles in Stocks & Commodities, Futures, Active Trader, Traders World, & Omega Magazine Numerous Speaking Engagements World- Wide Regular Television Appearances on KWHY in Los Angeles w Richard Saxton

19 Last 8 Years in 2 nd Retirement Raising my grandsons Now they are older & my daughter s back And, I m coming back! Just released TradeStation Made Easy! Now working on Grading the Gurus

20 My Articles Futures, Omega Magazine, Traders World, Active Trader, Stocks & Commodities (magazines) From No System to a Proven System in Three Well-Defined Steps Clustering Effects of Good Optimization Day Trading Basics Trading Difficult Markets Learning to Trade: A Systematic Approach On the Job Training Sunny Answers Users Questions on Quote.com Nuggets of Profitability Testing, Testing, 1, 2, 3 Working for a Living Optimal Trading Asking the Right Questions for Trading Success and more: see for MultiCharts

21 My Appearances Frequent guest of Richard Saxton on Channel 22 KWHY TV in Los Angeles Radio Interviews Online Chat Sessions for INO.com and Quote.com Online Investor Expo (a Money Show production) December 2000 Futures West International Online Trader Expo Online Investor Expo Equis Online Trading Summit January 2001 Get Off the Floor Chicago Mercantile Exchange July 1998 Market Technicians Association Symposium Chicago, November 1998 Electronic Trading Chicago Mercantile Exchange January 1999 Futures South February 1998 Futures West September 1998 TAG 19 November 1997 Omega Research Group of Dallas 1997 Omega Research Group of Orange County 1998 Omega Research Group of San Diego 1997 Omega World 1 Omega World 2 Online Investors Expo Barnes & Noble book signings Omega Research Users Groups AAII groups The Winner s Edge Orlando, FL, March 1996

22 What Have I Done for You Lately? Coming out of 2 nd Retirement 1 st Retirement: Took 11 years to travel the world from nd : Took an 8 year hiatus to raise my grandsons, of whom I have custody Now they are older and I m coming back I just finished TradeStation Made Easy! which will be in bookstores in April 2011 Now I m writing Grading the Gurus And I m back to trading the markets!

23 What Do You Want? BEGINNERS Getting Started >INTERMEDIATE >Back Testing Methods >System Design Methods >CPC Index = Robust Systems >PHW = which market to trade > Grading the Gurus stories >My DMA in action >Pennant Trading Method

24 BEGINNERS

25 FOR BEGINNERS New to the markets? Don t know where to start? Looking for a Get Rich Quick Scheme? Trying to make a living without the day-today grind of going to the office? Have seen all the ads, the books, the tapes, the seminars and you want some of what they have?

26 For Beginners Sorry to deflate the bubble, but There are no Get Rich Quick Schemes There is no such thing as easy money Trading is more stressful and more work than going to the office ever was Trading is a FULL time job 24 hrs a day And it s darn hard work Anyone who tells you anything else is trying to sell you something

27 FOR BEGINNERS Read, read, read Study free Charts (Yahoo Finance, ) KNOW short vs long Become an Expert on SMA Move on to MACD Then add ADX

28 FOR BEGINNERS Research Trading Software Packages Learn How to Use the Software Buy a Cheap System (or trial) KNOW its ins & outs study furiously NB: A better camera does not make a better photographer Paper Trade the SMA And observe and learn from what the market tells you

29 FOR BEGINNERS Test, test, test Read my handout article Test by hand, w Excel, or w Software PHW Index CPC Index Must have avg trade >= $100 or slippage & commission will kill you Test your concepts again

30 FOR BEGINNERS Test over ups, downs & sideways periods Test over 1min, 5min, 15min, 30min, 60min, daily, weekly and monthly charts What is an up trend? Higher lows & Higher highs What is a down trend? Lower lows & Lower highs Negative Slope Less than Moving Average

31 FOR BEGINNERS What s the most important rule I can tell you? Trade the Attractors Horizontal lines Trend lines Moving Averages Be proud if you catch 40% from the middle

32 FOR BEGINNERS Trade a Practice Account KNOW Simple systems work over time You ll never get more than 40% of a trend You ll always have losses You ll overtrade You ll stress & blame yourself You ll think you re a genius when you have a win

33 INTERMEDIATE

34 How to find a profitable system First Know What s Possible Buy and Hold PHW Potential Hourly Wage Picks all ideal turning points (Pivots) Adds up all the ideal profits Takes 40% of the ideal This is then the Benchmark the Goal Which makes more money: Buy & Hold, Trading, or working at McDonalds? Tops & Bottoms are not Knowable for MultiCharts

35 Buy & Hold Buy at the beginning of the data Sell at the end Data set dependent Daily Weekly 15 minutes? Define your time-span 1 year 5 years 10 years? for MultiCharts

36 PHW Potential Hourly Wage (0.01) for MultiCharts

37 Is it Worth It? PHW let s you know whether trading this instrument is worth it Will you make more than minimum wage? Essential part of your Business Plan Anything else is just gambling Normally $795 This weekend only $

38 Are You Really Looking for a System? Or are you a tire kicker than jumps from one idea to the next, and to the next, And, never lands on a plan? Can you decide on a plan and stick to it? Or do you test everything you read in new books and new articles? Do you enjoy making money, or doing research? There s a BIG difference

39 If you really want a system, here it is: INPUTS: j_buyday(5), j_buytarget(350); Condition1 = DayOfMonth(Date) = j_buyday ; //Is today the buy day of month? If Condition1 THEN Buy("BuyDay") next bar at market; If OpenPositionProfit >= j_buytarget AND BarsSinceEntry >=1 THEN Sell("ProfitTarget") next bar at market ; //

40 ^RUT 1 share; 100% correct

41 Optimization Report

42 Be Careful What You Ask For You might just get it! In the preceding example I asked for 100% correct. I got it. But, I also got 1 trade that lasted 1.5 yrs And, only made $ / share Percent Profitability (%P) isn t the answer!

43 Then, What Is? Total Net Profit (TNP) Number of Trades (N) Size of Average Trade? (AvgTrade) Profit Factor (PF) Ratio Avg Win/Avg Loss (R) All play a role in the evaluation of systems

44 CPC Index Invented by me to evaluate and measure/compare vastly different systems against each other CPC = %P * R * PF Only trade if CPC >= 1.2 We ll talk more about this later

45 Finding the Rhythm of the Market Monthly Weekly Daily 60 min 30 min 15 min 5 min ticks

46 PHW Yellow Dots on Daily Ideals

47 PHW on Weekly Bars

48 PHW on 15min Bars

49 PHW Indicator Available Normally $795 This weekend only $ For MultiCharts, TradeStation and Genesis Navigator

50 Back Testing Methods Blasting Method Hit it with thousands of tests No logic behind it

51 Gives you spurious results Much of the time the inputs in a moving average or MACD will show the most profitable being the backwardization ie Avg(6,12) will make less than Avg(12,6) which is backwards Must alter the code to include: IF L1 < L2 THEN BEGIN

52 MultiCharts Optimization Report

53 Backwardization

54 Backwards Moving Averages

55 3D Optimization Report

56 System Design Methods What is True? Stare at your chart, one chart at a time and see how many things you can find that are true. From these truths you can make trading decisions Look to Larry Williams books to learn how to spot truths For instance: Monday are good days to buy while Fridays are good days to sell

57 System Design Methods Make a ShowMe or PaintBar to show the truths before you design a system Always have PHW dots on chart For instance, here is a chart showing the bars above the 200 day moving average painted green, and those below painted red

58 200 MAV Filter

59 Larry Williams OOPS {From "Long-Term Secrets to Short-Term Trading" 1999 p114: "Any day of the week except Wednesday or Thursday" $2000 stop on S&Ps. For Bonds it's any day except Wednesday. $1800 stop. Use BailOut exit technique. In S&Ps the best day to sell is Thursday.

60 Larry Williams OOPS //Larry Williams' OOPS System from //"Long Term Secrets to Short Term Trading" //Opening below the previous day's low //(Buy setup) Indicates potential market reversal Condition1 = OpenD(1) < LowD(2); //Sell setup Condition2 = OpenD(1) > HighD(2); If Condition1 THEN BUY next bar on open; If Condition2 THEN SELL SHORT next bar on open;

61 LW: OOPS 0

62 LW: OOPS_0 Perf Report

63 In Order to Optimize You must have input parameters So, let s change OOPS

64 Adding Input Parameters INPUTS: jset(1 {1-5}) {which set of conditions}, jday1(3), jday2(4), {Not which days} jvlen(9), jlen(9); {Avg lengths} Condition1 = OpenD(1) < LowD(2); //Opening below the previous day's low (Buy setup) Indicates potential market reversal Condition2 = OpenD(1) > HighD(2); //Sell setup Condition3 = Dayofweek(Date)<>jDay1; //not day of week Condition4 = Dayofweek(Date)<>jDay2; //not day of week Condition5 = Volume > Average(Volume,jVLen); //Above average volume Value1 = Average(C,jLen); Condition6 = Value1 < Value1[1]; //Avg less than yesterday's Condition7 = Condition5 AND Condition6; //Above avg vol on decl momentum Condition8 = Value1 > Value1[1]; //Avg gt yesterday's Condition9 = Condition5 AND Condition8;//Above avg vol on incr momentum If jset = 1 THEN BEGIN //Conditions 1 ^ 3 ^ 4 Days of week If Condition1 and Condition3 and Condition4 THEN BUY next bar on open; If Condition2 and Condition3 and Condition4 THEN SELL SHORT next bar on open; END;

65 Click to Optimize

66 Optimization Setup

67 Optimization Report

68 Optimize By Thirds Break your data into 3 equal divisions Set the program to test only the date range in the middle third years historical

69 Test, Optimize & Design Only the Middle Third! Once the Middle Third passes muster, Then, and only then, test the first third And then the last third years historical

70 Speaking of Data Is all data equal? Is the close, the close, all the world round? Let s take a look

71 Speaking of Data MultiCharts Data Comparison

72 Speaking of Data Columns to compute the differences Comparing OHLC Zero is good

73 Speaking of Data

74 Speaking of Data What s the Difference?

75 Speaking of Data CheckSum 0.00

76 Speaking of Data Discrepancies:

77 Speaking of Data Here s Where It Matters: To read the full article, check for an upcoming issue of Technical Analysis of Stocks & Commodities magazine. Is Your Data Good Enough?

78 Back to the Process Optimizing & Research require meticulous data keeping Else, you will find yourself repeating tests you have already done, And missing tests you thought you had done In short, your results won t be valid

79 Keeping Your Data Log

80 Clustering Effects of Good Optimization With MultiCharts you can go a step further View 3D Optimization Charts Hovering over the peaks reveals the associated parameters vs: The old-fashioned way

81 3D Optimization Chart

82 Important Aside about Optimization As opposed to other software MultiCharts will let you run in Exhaustive mode til your heart s content i.e., it didn t stop me at 10,000,000

83 Export Data to Spreadsheet

84 Clusters: Export Optimization Report

85 Clustering Islands Alligators Stay in the middle of the island

86 CPC Index M N i=1 W i M i=1 N+M L i Where N = Number of Winning Trades M = Number of Losing Trades W i = Each Win L i = Each Loss OR

87 CPC Index CPC = %P * PF * R where %P = Percent Profitable PF = Profit Factor R = Ratio Avg Win/Avg Loss These are all on the Performance Report, but in 2 different places. Here s where to look

88 CPC Index Available Normally $495 This weekend only $198 For MultiCharts, TradeStation and Genesis Navigator

89 Performance Report

90 Performance Report

91 Performance Report

92 Performance Report: VAMI

93 Pain Tolerance TRADES EQUITY $100 $100 $1,000 $1,100 $1,500 $2,600 ($1,200) $1,400 $500 $1,900 ($800) $1,100 $3,500 $4,600 Drawdown $5,000 $4,000 $3,000 $2,000 $1,000 $

94 Money Management Sunny s Ultimate-F

95 Grading the Gurus Invite 50 famous gurus Those who sell systems, teach courses, write books and Hold themselves out to the public to know how to make money trading

96 18 Trading Champions Share Their Keys to Top Trading Profits (Financial World News) AceTrader.com: User Guide Admati, Anat and Paul Pfliederer: A Theory of Intraday Patterns: Volume and Price Variability Andrews, Alan: The Best Trendline Methods of Alan Andrews and Five New Trendline Techniques by Patrick Mikula Angell, George: Sniper Trading Workbook Appel, Gerald: Technical Analysis Power Tools for Active Investors (TL) Arms, Richard: The new Arms Index Course Grading the Gurus Stories Writing this book is getting very expensive. 50 gurus, avg $35 per book = $1, gurus, avg $300 per DVD = $15, gurus, avg $500 / system = $25,000

97 Grading the Gurus Stories Paid $500 for a guru s system He had advertised great performance chart for the last 4 months. And, it delivered

98 Grading the Gurus Stories $2,000 in 4 months As promised in the ads, over the last 4 months on the Russell 2000, it is profitable. However, look at the average trade size $25.64 avg trade

99 Grading the Gurus Stories Equity Chart for past 4 months

100 Grading the Gurus Stories Equity Chart for past 1 year

101 Grading the Gurus Stories Equity Curve for Past 5 Years 4 mo. period

102 Greed Will Cause You to Purchase Systems like this, without backtesting Is this a hap, or a hazard? Yes

103 Now let me Show You 1 of Mine sjh_dma: Dynamic Moving Average Calculates its own lengths based on speed of market Sunny_Bands: ATR bands around sjh_dma sjh_exits Optimizable stops, targets, trailers etc Come by the MultiCharts booth & I ll show you more

104 Free TRIAL to Backtest Mine

105 sjh_dma: Same instrument: ^RUT (Russell 2000) $2,034,715 since 1987, intraday trading

106 My Dynamic Moving Average (DMA) Proprietary Higher Mathematical Formulae $1,995 today $798 thru 12/31/2010 Avoids most whipsaws Keeps you in longer moves Can be integrated into a system Add sjh_exitstrategies for $795 $

107 Specific Rules Here s how I made this* $2million: Russell 2000 (^RUT) My Dynamic Moving Average (sh_dma) Money Management (my Ultimate-F) sjh_exit Strategies *hypothetical

108 This Presentation will be available: On my website Next Week starting Monday You can examine the settings there You can download a trial of the indicators Show Prices are good until the end of next week: (Nov 27, 2010)

109 Show Special Normally $7,790 for these two Today only $2,804 To make two million dollars? Comes with support to teach you how to use them, and how to determine your own settings

110 Here are some you can backtest Try them today Buy them before I leave tomorrow noon And I ll take off another 10% On top of the already 60% Discount In fact, I ll extend it until Tuesday after the conference, 11/23/2010 Call me at (760) or at [email protected] and mention this conference Come by the booth & get yours

111 Sunny s Products sjh_dynamicmoving Average (sjhdma) sjh_dynamicmoving Average Histogram Sunny_Bands (ATR + sjhdma) sjh_pennants (breakouts) sjh_phw Indicator (yellow dots) sjh_cpc Index (success measure) sjh_exitstrategies (optimizable exits) sjh_bingticks (hear the market action) sjh_natural_numbers (lines at significant nbrs) Solar Systems Ask Me if You Want a Bundled Price

112 Pennant Trading Methods Pennants & Flags Congestion Simple to See & Simple to Use

113 Pennant Indicator Normally $795 Today 60% off = $318 Plus another 10% = $

114 Special Year-End & Show Prices

115 Money Management I can teach you my Ultimate-F Technique

116 Call Me: (760) Fax (760)

117 Warning FUTURES, STOCKS, BONDS, CURRENCY AND OPTIONS TRADING INVOLVES HIGH RISKS WITH THE POTENTIAL FOR SUBSTANTIAL LOSSES. PLEASE READ: PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THERE IS A SUBSTANTIAL RISK OF LOSS TRADING STOCKS AND OPTIONS WITH OR WITHOUT THIS OR ANY OTHER ADVERTISED PRODUCT, SERVICE OR SYSTEM. ALSO, HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.