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[GameBrain]

Is it possible to "out-think" the markets?

Is a "Holy-Grail" possible?

Let's create a market "I.Q. test" that will give us an
answer.

First, we must define what our idea of a Holy Grail would be.

Ideally, this would be a system that is perfect, and never
loses. But this would be too much to hope for.

What can we aim for realistically?

1. The system would be simple. One pattern. No optimization.
2. The system will work on any time-series data.
3. Historically, the system will have results better than any
known system regarding profit potential and risk/reward.
4. There should be a theoretical expectation that our
historical results will hold up in the future.

Why have traders been unable to create such a system?

This failure occurs because traders do not have a realistic view
of what the markets really are.

So, here are the pertinent questions, and the *correct* answers.

Question: "Why do systems fail?"
Answer:
All known systems are subject to *deviation*. Deviation
is an occurrence that falls outside the parameters of the system's
knowledge or historical learning. This takes the form of an unusually
long series of losing trades, or a series of unusually large losing trades.

The only thing the trader can do is re-write the system
to account for that particular deviation in the future. The system will
then work, but only until the *next* deviation occurs, at which point
the system is re-written again.

These deviations can be taken in to account to a certain extent with
various money management stratagems, or systems that are (supposedly)
"low-risk/low-reward", but the resulting profit yields
are so low or erratic, they are not worth the bother.

Traders must endure the "Chinese water torture" of many losses
before gains, or the psychological trauma of an enormous loss. Not many
traders can endure these, and they quit.

Question: "Why do these deviations occur?"
Answer:
Because the systems now in use do not represent endemic traits of
time-series data. They represent mathematical optimizations of a history
that is not going to repeat itself in the chaotic movements that are
the markets.

We want a system that is endemic to all time series (this even
includes random data), thus insuring that the system is subject only
to *variation* (occurrences that are accounted for already by the
system) and not *deviation*. If we have accounted for all the
variations in a system, we know, at least theoretically, that our
system will hold up in the future.

We must create a system with the following:
1. A historical record that is better than any known system in
profit potential *and* risk/reward.
2. The system will work on any time-series data, including
random data.
3. The system will consist of one pattern.

So, let's ask the right questions, and come up with the answers.

Question #1 - What are the markets and/or random data?
Answer:
A chaotic series of movements in time and variable (like price).

Question #2 - What then should the system be based on?
Answer:
Chaos Theory.

Question #3 - What is the logic of Chaos Theory?
Answer:
All events are subject to and caused by one initial state.
(A butterfly flapping its wings in Florida produces a storm in the mid-west).

Question #4 - What is the meaning of this in considering
time-series data?
Answer:
In relation to all movement in a chaotic series, there is an
optimal end/beginning (entry/exit) point.

Question #5 - What is this point?
Answer:
Logically, the lowest low of any up-movement, and the higest high
of any down-movement.

Question #6 - How do we determine the optimal high/low of a movement?
Answer:
When the high/low represents a maximum value in time and
variable (price).

These questions and answers are the only things we need to build our
system. This is your market I.Q. test. You have everything you need to
build the "holy grail".

As a reference, I recommend:
*Metamagical Themas: Questing for the Essence of Mind and Pattern* by
Douglas R. Hofstadter / Section IV: 16.Mathematical Chaos and Strange
Attractors

RESULTS:
Proper reasoning of the above produces a single, simple, optimal point of
entry/exit in relation to all time-series movement. (one pattern)

The system works on any time-series data including random data. The
system is endemic to all time-series data. Thus we may have variations
in subsequent movement, but not deviations. Therefore, theoretically,
historical testing should be representative of what we can expect to
see in the future.

The attached historical testing of the system is (to my knowledge) better
than any known system regarding profit potential and risk/reward.

I do not sell this system, however, if you would like to receive the
signals this system generates, message me and give your e-mail address
and markets of interest (stocks, futures or both). I will add you as
a subscriber, and you will get the signals via e-mail.
Good trading to all....

[thomasadair]

The Holy Grail to Investing.

Developed multiple arbitrages for the financial markets. Arbitrages that produce just a few percent a year, to arbitrages that produce over 30 percent a year.

In 2001 i started developing, as of now, a dozen arbitrages. I lock in an X percentage, and Y time later, i close out the arbitrage. Over 30%/yr.

Risk-Free Investing is not only possible, but in abundance. Just that people are told and taught that it is impossible. No risk has been in front of all, but not seen.

The market is unlimited.

Thomas
thomasadair at hot mail dot com

[riskfree]

The Holy Grail to Investing.

The utlimate business solution. The ability to cut the cost of any business expense, or just plain invest.

Developed multiple arbitrages for the financial markets. Arbitrages that produce just a few percent a year, to arbitrages that produce over 30 percent a year.

In 2001 i started developing, as of now, a dozen arbitrages. I lock in an X percentage, and Y time later, i close out the arbitrage. Over 30%/yr.

Risk-Free Investing is not only possible, but in abundance. Just that people are told and taught that it is impossible. No risk has been in front of all, but not seen.

The market is unlimited.

I'm interested in selling, or partnering to sell, or partner in a business that uses my arbitrage.


Thomas
352-283-3326
HolyGrailToInvesting@hotmail.com