A very common question that I have been asked by the many people involved in beta testing THT has been “what will happen when beta testing closes?”
Well, that time has arrived, and here are the answers to those questions.
First of all, by “closing beta testing”, all that is effectively happening is that newcomers to THT will not join the beta testing group. Newcomers will be working with THT as users of the software, and not as beta testers.
I have in fact closed beta testing before – in August of 2009, when we reached 50 beta testers, and I thought that was as many as I could handle, but as the error reports started to diminish I opened the beta testing group again.
And so what is different now? The difference now is that THT is moving into a new stage of development. I am calling this new stage supported development.
Beta testing (of new and existing features) will in fact continue, but in a slightly different way: it will be more structured. No more random “testing” of THT by simply using it. Tasks are being defined, and beta testers will be required to choose a task to work on. These tasks will not be onerous in any way, but will provide for a much more thorough testing process. Beta testers will be required to report on the progress of their testing. Many of our beta testers have been doing this anyway, and so it might not be a big change for them.
Supported Development
The Hurst Trader started as a small personal project of mine. I wanted to create software that I could use for my own trading. The project has grown tremendously over the last 9 months, since I started beta testing with the 11 people who had stumbled across this blog. There are now 300 people who have “signed up” as beta testers, and that number is growing at an accelerating pace.
The sheer volume of questions and support requests has grown to a level where I have little time left to develop new features in the software. And developing THT further is something that I am very committed to doing.
And so I have had to make some decisions about the future of THT. These are some of the approaches I considered:
Should I say thank you to everyone involved and withdraw THT from the public, and use it to trade myself? I admit this is a tempting option. It is ironic that working on THT has taken up so much of my time that I spend very little time trading nowadays! But I have decided not to do this because I am very grateful to the many people who have helped to develop THT and would like to continue this journey with them.
Should I close Beta Testing and allow all existing beta testers to use the software for free forever? I did seriously consider this option. But there are two reasons why this is not what I will be doing. Firstly because there are many people who have not yet discovered THT, and the developing community has been one of the most rewarding aspects of this project for me. I don’t want to “close the doors” on the rest of that community. The second reason is because I want to keep developing THT. I have big plans for THT, including intraday analysis, a realtime version, and incorporating a broader and more advanced cyclic analysis.
Should I “bring THT to market” and start selling it as a commercial software application? This was perhaps the most obvious option, and it is my intention to do this eventually, but it seems premature to do it now, when I have so many new features that I still want to work into the software.
And so I convinced my partners in Fortuna Software to delay “bringing THT to market”, and to rather start a period of supported development. Development will continue, and it will be supported by the contributions of THT users.
I have seen very clear evidence (emailed to me privately by many beta testers) that THT can be used to enhance trading profits. And so it is time that this project becomes self-sustaining.
The further development of THT will be supported by the purchasing of 3-month licenses. All newcomers to our user group will need to do this after the 30-day free trial expires, and existing users will transition to this new phase now.
It is my sincere hope that this transition goes well, and that a very contented group of beta testers who have been using the software for free will become a very contented group of users who know that they are getting more benefit from the software than they are contributing towards its development.
I have written before about the “grand plan” for the screensaver, and I’m pleased to announce that the final manifestation of the screensaver has now arrived.
What does the screensaver do?
Apart from the obvious: the screensaver uses your computer’s processing power when you are not using it, in order to:
How to use the screensaver
The best way of explaining is by example, and so here is an example of using the screensaver, using the S&P 500. I am going to try to make this as easy to read as possible, so I am going to use many pictures, instead of long dense explanations!
If your screensaver is processing some other data, and you want it to move straight on to this new data, simply click on:
Note that you can assign many charts to the screensaver. It will queue them.
Importing the trade histories
Now the fun begins. THT has been working as your trading research assistant, and has some interesting information about which cycles would have been best to trade over the time period that you specified as the analysis period (less the first 400 bars…)
There are two side-points worth noting here:
Note that you can import many trade histories, and THT will handle them all in the same chart, but in order to trade more than one cycle you will have to create a new chart for each cycle.
The Trading Reports
So how would we have performed, trading the 40-day and 40-week cycles?
First of all, a disclaimer: Please bear in mind that I am presenting hypothetical results here. I am not making any representation that your trading account would have experienced the same profit or loss. Also remember that past performance of a trading method is no guarantee of future performance.
And so, let me rephrase that : Hypothetically, how would THT have performed?
There is a lot of information there, which I will explain in webinars, tutorials, and on this forum in the fullness of time, but for now, a few points of interest:
The blue line is the actual equity for every day. The thin red line is the maximum intraday drawdown, and the thin green line is the maximum intraday gain.
Well that wraps up the use of the screensaver in THT. Two parting comments:
I have realised that many people are reading this “development blog” about The Hurst Trader, instead of connecting to our Hurst Trader Forum, and so I am going to be doing some dual posting between the two, for the benefit of those who don’t go for the whole forum thing!
The Hurst Trader has an extensive “trading module” built into it (see Webinar #10 in which I introduce the way in which THT does its trading).
However I am pleased to announce a brand new feature within THT, which is a “manual trading” capability.
This allows you to:
This functionality is going to take me a few posts to explain in detail, so watch this space …
Those who are testing the ALPHA version of THT will have the functionality available in version 1.2.0.0 (available 5 December 2009).
Those who are working with the BETA version of THT can expect to have this functionality as soon as the bugs are worked out of the system (probably by about the 16th of December 2009).
I’m an apalling blogger, I admit that. Having received several encouraging emails from people interested in Hurst’s theories, I realised that I haven’t posted anything here for a while. In fact I have been working away, burning the midnight oil trying to get the software to really do what I set out to have it do: analyse the market the way Hurst would have done. I’m pleased to say I’ve made some progress. Now I am working on updating the screensaver aspect of the software so that it performs exactly as the main software works. On the way I have encountered many interesting problems, and I’m going to start sharing those on this site, which I guess is what blogging is all about! Today I’m going to write about the whole screensaver idea.
The screensaver
I have been asked why on earth I’m building a screensaver as a part of the software package. The reason is very simple. At the moment when loading data and creating a chart for the first time the software takes about 4 minutes to perform the phasing analysis on a chart with 15 years of history (on my computer, which is fairly fast, but not a super-computer by any means). Then every day it updates the analysis, a process that takes about 30 seconds. Twice in every trading cycle (and I am mostly looking at the 20 and 40 day cycles at the moment) the software does a complete re-evaluation of its phasing analysis, a 3-4 minute process. It’s all very well stepping the software through its paces every day, and seeing how it performs, but that doesn’t help one to know that in fact the software is “working” – in other words giving good advice about when to buy and when to sell. The only way to do that is to look back at a history of several years worth of the software doing its thing. To generate that history it is necessary to step the software through the data day-by-day, which is a process that really ties up your computer, and isn’t very entertaining. Which is why I am building the screensaver. From the software you allocate a chart you are working on to the screensaver, and then when you take a break the screensaver starts building the history. It’s a process that seems to work fairly well. The screensaver also builds a “trading journal” so that you can go back and see why the software bought and sold when it did. For me this is the key to making the software really work. Of course I can only expect the software to work as well as an expert in Hurst’s theories would work … and although there is some evidence that the theory works, the real test will be the trading history generated by the software, and the ongoing trading the software does.
Backtesting
Backtesting has earned itself a very bad reputation in trading circles, mostly because it is possible to optimize the parameters a system uses so as to perfectly fit the historical data, and produce a fabulous trading history that simply doesn’t work when you use the same parameters on new data. So is there a danger that my screensaver is going to fall prey to this dreaded problem (which has been the downfall of many trading systems – and is related to the problems Rich Swannell encountered with his Refined Elliott Trader because he presented hypothetical results rather than real ones)?
The simple answer is no! But I should explain that. There are two reasons why I don’t think optimized backtesting is going to distort the results generated by the screensaver:
There are two ways in which the screensaver’s results will not match the real performance of the software:
OK, so that’s it – why I’m creating a screensaver. The other thing about it is I think it looks cool! Here is a sample:
I keep writing all sorts of nonsense on this blog, but the one thing I haven’t got to yet is what the software is doing right now. That’s because I’ve thought I needed to prepare the ground, explain things, describe the trading theory at length … but instead I’m just going to take the plunge. Pictures say it all:
This is a chart of the Euro-USD exchange rate, produced by the software, analysing data up to Friday 30th May 2008.
I’m not going to explain at length what this chart means because that would take several pages of discussion. For now I just wanted to give a glimpse of what the software is doing. Having said that, here is the commentary generated by the software, which pretty much does that for me:
Updated Phasing Analysis reveals that the dominant cycle has a wavelength of 16.9w, or 118 days. This is assumed to be the 20w nominal wave, which implies that all waves will be (-14%) shorter than nominal. This cycle is approaching a TROUGH (and a medium degree nest-of-lows). The underlying trend to this cycle is currently FLAT, likely turning DOWN. The future FLD indicates that this cycle will influence prices to peak in a short while, and then to fall.
The sub-dominant cycle (next wave down from the dominant cycle) has a wavelength of 58.9d, or 59 days. This is assumed to be the 80d nominal wave. This cycle is overdue for a PEAK. This is probably the second of 2 sub-waves. The underlying trend to this cycle is currently FLAT, likely turning UP. The future FLD indicates that this cycle will influence prices to peak soon, and then fall.
The pre-dominant cycle (next wave up from the dominant cycle) has a wavelength of 33.9w, or 237 days. This is assumed to be the 40w nominal wave. This cycle is approaching a PEAK. The underlying trend to this cycle is currently strongly UP. The future FLD indicates that this cycle will influence prices very little because despite near-term volatility the FLD becomes range-bound.
Σ L is currently FLAT. (value of: 0.0)
The last phasing analysis was 4 days ago. In that time price has FALLEN by 244 to 15521.
Sequence #1 of the previous pattern: Price did move DOWN (for 3 days) as expected and has moved towards the target of 14954. The closest price has gotten to this target so far is 15394 (2.9% short) 1 day ago. This target is now 38 days away.
This brings the price movement up to date. From this point on:
Sequence #1 is expected to reach a LOWER target of 14808(-146 diff) 4 days EARLIER, on 2008/06/12 Recent price action has generated a new sequence (# 1). The target of this projection is 13624, expected by 2008/10/06.CURRENT PROJECTION PATTERN:
Price is currently range-bound (last close 15521), in an active FLD pattern cascading down. Price crossed below the 15 day FLD 1 bar ago, implying a price fall to 15467. This move would imply a price cross below the 29 day FLD (est: 2008/06/03 & level: 15498) projecting price to a CONGESTION PAUSE ZONE at approximately level 15436 Then price is likely to CONTINUE DOWN after a pause, towards fulfilling the 16 week cycle projection of 15402 taking price into a CONGESTION PAUSE ZONE at 15431 by about 2008/06/09 Then price is likely to CONTINUE DOWN after a pause, towards fulfilling the 59 day cycle projection of 15342 taking price into a CONGESTION PAUSE ZONE at 15429 by about 2008/06/09 . This price move breaks below the 33 week VTL implying that the peak on 2008/04/23 is the expected peak of the 15 month cycle. Then price is likely to CONTINUE DOWN after a pause, towards 14866 by 2008/08/09, attempting to fulfill the projection generated by the crossing of the 58 day FLD taking price into a CONGESTION PAUSE ZONE at 15257 by about 2008/07/03 . This price move breaks below the 16 week VTL implying that the peak on 2008/04/23 is the expected peak of the 33 week cycle. Then price is likely to CONTINUE DOWN after a pause, towards 14522 by 2008/11/09, attempting to fulfill the projection generated by the crossing of the 33 week FLD taking price into a CONGESTION PAUSE ZONE at 14782 by about 2008/10/05 . This price move breaks below the 15 month VTL implying that the peak on 2008/04/23 is the expected peak of the 46 month cycle. Then price is likely to CONTINUE DOWN after a pause, towards 13572 by 2009/07/15, attempting to fulfill the projection generated by the crossing of the 15 month FLD taking price into a FINAL REVERSAL ZONEThere is no cycle which provides an average potential of at least 20% per half-cycle, and so it is not recommended that you trade this stock unless you are trading on a leveraged basis, in which case you should change the Trading Settings by using the Tools|Trade Settings|Edit menu.
Having reviewed the entire projection sequence I am unable to find a move suitable for trading, and so no trades have been set up.
Well – that’s what the software is “thinking” about the Euro-USD as of the 30th May. It seems pretty likely that things are going down, and that the upcoming nest-of-lows will generate little more than a temporary upward correction to the downward move. However it is early days for the software, and so I am by no means making any kind of call on this, I merely put it up here to show what the software’s doing at the moment.
I’m not a blogger – let me just put that out there right up front. I have always rather scorned the concept of making a diary “public”, but I have had an epiphany of sorts and have realized (I guess about 5 years after everyone else) what the value of a blog is, and what I hope to achieve from this blog – I want to share my ideas, and find someone or perhaps some many to talk to about them. As my wife’s eyes glaze over whenever I mention my software project, I reckon it’s about time for me to find some other(s) to talk to about it.
The Project
In August of 2005 (almost 3 years ago as I write this) I started working on a personal project which has become the subject of this blog – I decided to create software for use in trading (of stocks/ shares/ forex, you name it) which would be able to replicate all (or most) of the thought processes that go into an approach to trading that intrigued me (I’ll discuss this trading approach in detail in a later blog). I know that’s a tall order, or at least I have realized over the past 3 years what a tall order it is, but I believe I am beginning to realize the dream, and I feel the need to share the project with others who might be interested.
Because here’s the thing: I have tried a good many of the trading software packages out there, and I have been disappointed with most of them. The “black box” software has never appealed to me (so to be fair I’ve never given it a good run) because I’m the kind of person who likes to make my own decisions, particularly when my own money is on the line. And other analytical packages I have found frustrating because either:
I’m a little obsessive. I have tested many software packages by stepping them day by day through the data – and I have yet to find one that really works consistently across all market conditions and several markets. And yet in my (fairly extensive) reading on the subject I have come across at least one theory about the movement of stock market/currency prices that really seems to make sense, and which should work. And hence the project that is the subject of this blog – to create software which will be able to: