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Excellent article. Now to show my ignorance of programming. I can
eyeball the charts and see the lowest value for the past 10 days,
how do you go about writing this in amibroker? Also, are you
defining today as time 0 and going back 10 days from here? What if
yesterday's value was the lowest of the 10 days, would that still be
a buy even though there is a good chance that the stock is still may
be on a downtrend? In this instance, would you continue to watch
this particular stock drop and wait for it to break the trendline
and then use this particular rule of buying at the 10 day low and
selling when it crosses the 10-ma?
Thanks for the help,
ron
--- In amibroker@xxxxxxxxxxxxxxx, "Gordon" <amibroker@xxxx> wrote:
> I subscribe to TradingMarkets.com. I imagine many others do as
well.
> I'm not a big proponent of reading the work of market
commentators.
> This site, IMHO, however, is run by true pros. There was a recent
> article that really, really caught my attention. Since I've been
> working on pivots and swings, it hit home. I'm pasting a quote
from
> it that I think you will be glad you read. This is from an article
by
> founder Larry Connors this past Sat., beginning and ending inside
the
> double quotes:
>
> "A Brief Review Of Last Week's Findings
>
> We now know that had we bought new 10 day highs in the S&P's and
> exited when prices crossed below their 10-day ma, we would have
lost
> money in the bull market of the past decade. We also know that had
we
> acted counter-intuitively and sold when everyone else was buying
at
> these times, we would have made good money. And most importantly,
as
> the world was throwing in the towel and grumbling about how bad
> things were and how "the internals" were deteriorating, if we had
> been buying during these times (at 10 day new lows) and had sold
when
> prices rose above 10-day ma, we would have far outperformed buy
and
> hold plus we would have been in the market less than 40% of the
time.
> A nice combination. Wow, buying low and selling high...what genius!
>
> Now Let's Move To Other Markets
>
> Let's now go further. Let's look at some other indices. First the
> Nasdaq. The market that had one of the greatest runs in US history
in
> the late 90's and then one of the greatest collapses. I'm going to
> first show you the annual results for the past 11 years. The
column
> on the top shows us the number of Nasdaq points that were made by
> buying a new 10-day low (buying the pullback) and exiting when
prices
> crossed above the 10-day moving average.
>
> Buy The 10-Day Low -- Exit When Prices Close Above The 10-Day
Moving
> Average
>
> Period Net Profit % Profitable
> 03 344.08 91.67%
> 02 90.30 62.50%
> 01 218.42 58.33%
> 00 1,426.24 68.75%
> 99 460.21 77.78%
> 98 8.13 50.00%
> 97 71.46 58.33%
> 96 93.22 76.92%
> 95 140.55 100.00%
> 94 33.25 84.62%
> 93 54.99 92.31%
>
> Total Nasdaq points gained: 2940.85. Percentage of Trades
Profitable:
> 75.1% (does not include slippage and commission). And, you
> accomplished all this by being in the market less than 32% of the
> days during this period. Yes, that's right, 68% of the time your
> money was not at risk. It was in cash.
>
> The column on the bottom shows what happened if you only traded
the
> breakouts -- you plowed in when everyone else was buying and
jumping
> up and down about how great things were. You bought the 10-day
highs
> and exited when the market crossed under its 10-day moving average.
>
> Doing The Opposite -- Buy The Breakouts -- 10 Day New Highs, Exit
is
> When Prices Close Under The 10-Day Moving Average:
>
> Period Net Profit % Profitable
> 03 (24.47) 40.00%
> 02 (159.18) 20.00%
> 01 (368.75) 36.36%
> 00 (1,390.77) 30.77%
> 99 547.27 31.25%
> 98 530.76 46.15%
> 97 43.83 33.33%
> 96 52.45 43.75%
> 95 3.70 35.71%
> 94 (38.47) 11.76%
> 93 (36.42) 28.57%
>
> Total Nasdaq points LOST: -840.05. Percentage of Trades
Profitable:
> 33.5% (does not include slippage and commission).
> "
>
> Enjoy.
>
> Gordon
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