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Phsst asked:
> But are there any known conditions where test results can be relied upon.
>
> For example if a calculated trendline up to the current bar is more
> than a few bars old, and is linear for those past bars, and correlates
> (for lack of a better word) with current bar close price, does this
> not perhaps mean that an assumption can be safely made that future
> prices have not yet influenced the current trend?
This issue has come up here in the past. Check the archives about two years
ago.
The answer is a resounding "NO!" It will look great on backtesting and kill
you in real-time. Problem is, as the current price changes, the number of
points required to trigger a (percentage) signal IN THE PAST changes, and
your software will go back and erase the bad trades. Yes, this sounds
ridiculous, but if you stare at it long enough the reasons should begin to
come clear. Not everyone agreed with me the last time we discussed this,
but I had already made that mistake and they hadn't. They may have seen the
light since then.
Owen Davis
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