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> A complaint that I've heard many times about Advanced Get, which does
> a marvelous job of identifying and labeling the E.W. pattern, is that
> it changes the E.W.-labeled points as new data is added. Anyone who
> truly understands the nature of the E.W. pattern realizes that the
> pattern DOES evolve as new information (data) is added in time. So
> that particular software algorithm simply reflects this 'updating'
> process, and RIGHTLY so! One just needs to understand that this is
> the nature of the E.W. model as applied to financial markets.
> Whether or not USING this DYNAMIC information for profitable trading
> purposes is 'practical' or not, as Dimitris has astutely pointed out,
> is a whole different story, and I wholeheartedly agree with this!
> THAT issue is best left to another trading systems 'strategy' forum.
>
> Buzz
While others, yourself included, may use mechanical scans only to find
things to chart or otherwise examine manually, I'm partial to fully
mechanical trading, if for no other reason than because the results of an
approach can be validated through backtesting. When signals change as more
data is added, this makes it very hard to know how the system would have
behaved at the time.
Check out almost any Zig-based system -- it'll knock our socks off with past
data, because the signals you see from here have already been "adjusted" by
data that at the time hadn't happened yet. I've written a confirmed-zig
system, that trades only when the zig trend has progressed far enough that
the corner being traded won't disappear, and trust me, it's way less
impressive.
For me personally to have "faith" in an EW system, I'd want to backtest it
somehow. This means describing it so the actual trading signals don't change
over time. If they have to be delayed until they're certain, well, that's a
system limitation; hope it still performs well. If the signals can't be
stated in a stable way, how would you know if the system works well?
Dave
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