magic t or t theory

January 30th, 2017, 08:47 PM

i am reading "pit bull" for the first time and am curious about Marty Schwartz's "magic t" system mentioned in the book. i have googled my heart out and have found nothing on how to calculate it. i have got as far as the inventors website that is nonfunctional since his passing. and i have found out it is called "t theory". anybody know a place i can find a book on it?

January 30th, 2017, 08:58 PM

This blog about cycles claims it is related to cycles/cycle theory. It looks like it involves picking out the major swing low points as references. It looks like it's Terry Laundry's Magic T system that Schwartz just used.

Swing Trade cycles: 12-23 T-Theory
https://mrtopstep.com/wp-content/uploads/2015/12/MagicT-IntroTo-Theory.pdf

Quoting

…Of everything I read Terry Laundry’s Magic T Theory made the most sense to me. …Terry was an eccentric genius living out on Nantucket Island. He was a fellow Marine, a jughead, who’d graduated from MIT and was now using his considerable engineering skills to analyze the market. Terry believed that the market spent the same amount of time going up as it did going down…When you look at the letter T, hence, the Magic T Theory…With the Magic T there was order in the universe a high and low tide every…The Magic T and I became as one.
- Marty Schwartz, legendary trader and author of the “Pit Bull"
https://www.ttheory.com/
To me T-Theory looks like just a different way of looking at cycles. I am no expert on T-Theory, but thought you may find it interesting. I have attempted to construct a T-Theory chart for the S&P. Red Bars under performance, green bars over performance. Looks like the over performance period should be ending.

January 31st, 2017, 08:33 AM

thanks tpredictor. i have been to those sites. the topstep site tells you what the system can do, but doesn't tell what the system is or how it is constructed. i have no interest in black box indicators. i just filled out the form on ttheory to get information.

January 31st, 2017, 10:33 AM

Not sure what you're referring too about blackbox indicators. The TopStep article explained theory in basic terms. The idea is the market spends about the same amount of time going down as up. So, once you identify a bottom then you buy in and hold --- and sell based on the time of the decline or after a major decline and rally then you sell at the top as projected based from the prior peak to valley time. So if the market declined for 1 year but you missed the bottom then you would wait for 1 year to rally and sell it based on that time projection.

I suspect the market declines a lot faster then it rallies. So not sure this theory will be supported much by the evidence but it has some valid points. For example, the narrative is that at the bottom --when all the evidence is negative -- that it doesn't matter because it has already been discounted by the market.

February 6th, 2017, 09:45 AM

sorry for using the term "black box". what i meant was that everything i have found tells the idea behind t theory but doesn't tell how to construct it. just some "T"'s drawn on charts. maybe thats all that it is? Marty Schwartz also mentions his "magic t oscillator". i'd like to know how that is constructed as well.

magic t or t theory

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magic t or t theory