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A couple of things I have learnt over the few years I have been trading
# Keep It Simple
# When starting with a new system, base that on observations from the
charts, then from that on how the indicators or price patterns reflect
those observations. Do not use an indicator then try to work out what
the price does. This approach will require you to learn about straight
charting techniques, which will always help you when using TA.
# Learn exactly what indicators are measuring. It is no point using a
tool if you have no idea what it does. Some indicators can be
mathematically based on similar price behaviours so it is no point
using these together
In backtesting
# make sure your historical data is accurate
# try to cover various market major moves
# backtest only the stocks you intend to trade
# remember that few stocks actually behave the same, so different
systems or parameters/variables may be needed
Just some thoughts
On Thu, 10 Feb 2005 09:48:31 +0700, Claude Caruana
<claudecaruana@xxxxxxxxxxx> wrote:
> Hi Ron,
>
> This is what I am set to find out, basically through extensive testing, in
> the coming weeks. First thing I'd like to clarify though is that what you
> are really talking about are entry signals and not systems. Entry signals,
> although important, are only a very small part of a successful system.
>
> These are my observations up to now:
>
> Whenever I try detecting a reliable price pattern - e.g. Cup and Handle I
> find that my resultset it too small (<100 trades per year (EOD data)) to be
> able to say if it is reliable or not. I am not sure how i can improve this -
> for the time being I am using the US-stocks database available on the
> amibroker website.
>
> All entry signals which I tried designing based on any of the "common"
> indicators (Stoch, CCI, RSI etc..) or a combination thereof, and which give
> a large-enough result set to determine if it gives constant results or not,
> never seem to give a result better than random entry.
>
> I perform my testing on an entry signal as follows:
>
> A) Time Base Test
>
> 1) I set up multiple timeframes for my testing scenario
> 2) I run a test run using a random entry and a 5 day time based stop for
> each of those timeframes, and record the % of winning trades
> 3) I run a test run using my entry signal and check whether the # of trades
> is greater or less than the random entry benchmark
> 4) Repeated over several timeframes I see whether the result is consistent
> or not.
>
> B) PL Ratio Test
>
> Same as above, but I set 2 stops - one is a Max Stop Loss and one is a
> Profit Stop, which is set to a multiple of the Max Stop Loss. Again here I
> see the number of winning trades over losing trades. The higher the ratio,
> the less winning trades. I personally try my tests using a mutiple of 4.
>
> I personally would never use a system where the sell condition is the
> inverse of the buy condition (e.g. Stoch - Buy on xover of 30, sell on xover
> of 70) as this type of system for me is totally uncontrollable and will not
> apply to my current style of trading. Usually, when adding a stoploss to
> such a basic system, the results are disappointing.
>
> I am still very new to Amibroker (4 weeks) and trading in general (1 year
> experience, mostly negative, trading on fundumentals with tight stops -
> which i have come to realise is a losing setup). I have taken a break from
> trading activities, purchased Amibroker and I am determined to create a
> system which works for me. If there is anybody who can contribute with their
> own observations, or disagree with any of my observations above, I would
> really appreciate any comments.
>
> regards,
> Claude
>
>
>
>
>
>
>
>
>
>
>
>
>
> ________________________________
> From: mrdavis9 [mailto:mrdavis9@xxxxxxxxxx]
> Sent: Thursday, February 10, 2005 08:59
> To: amibroker@xxxxxxxxxxxxxxx
> Subject: Re: [amibroker] OT:Re: Technical Vs technofundumental trading --
> For Steve Dugas
>
> Does anyone out there think that, at least theoretically, a holygrail system
> is possible, and if so, do you think it would it would it would more likely
> be possible via very creative use of the basic indicators such a RSI,
> STOCHK, OBV, etc, or would it more likely result from someone's very
> creative coding that would be able identify the various price patterns that
> happen just before a big breakout occurs. What are your thoughts. Ron D
> ----- Original Message -----
> From: Steve Dugas
> To: amibroker@xxxxxxxxxxxxxxx
> Sent: Wednesday, February 09, 2005 6:19 PM
> Subject: Re: [amibroker] OT:Re: Technical Vs technofundumental trading --
> For Steve Dugas
>
>
> Do not despair Richard!
>
> Once I have discovered the Grail and am making $$ MILLIONS $$ every month, I
> will probably sell it to the general public for a couple hundred bucks. Then
> you too can share in the unlimited riches. : - )
>
> PS - Maybe I will also tour the country holding seminars. Keep your fingers
> crossed : - )
>
> Steve
>
> ----- Original Message -----
> From: "Richard Semock" <semockr@xxxxxxxxxxx>
> To: <amibroker@xxxxxxxxxxxxxxx>
> Sent: Wednesday, February 09, 2005 7:08 AM
> Subject: [amibroker] OT:Re: Technical Vs technofundumental trading -- For
> Steve Dugas
>
>
> >
> >
> >
> > FYI,
> > I was rejected due to not meeting email requirements, they don't like
> > my hotmail addr. My hopes for the quest are dashed!
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "quanttrader714"
> > <quanttrader714@xxxx> wrote:
> >>
> >> http://finance.groups.yahoo.com/group/holygrailsm/
> >>
> >
> >
> >
> >
> >
> >
> >
> >
> >
> > Check AmiBroker web page at:
> > http://www.amibroker.com/
> >
> > Check group FAQ at:
> > http://groups.yahoo.com/group/amibroker/files/groupfaq.html
> > Yahoo! Groups Links
> >
> >
> >
> >
> >
> >
> >
> >
>
>
>
>
>
> Check AmiBroker web page at:
> http://www.amibroker.com/
>
> Check group FAQ at:
> http://groups.yahoo.com/group/amibroker/files/groupfaq.html
> Yahoo! Groups Links
>
>
>
>
>
>
>
>
>
> --
> No virus found in this incoming message.
> Checked by AVG Anti-Virus.
> Version: 7.0.300 / Virus Database: 265.8.6 - Release Date: 2/7/2005
>
>
>
> Check AmiBroker web page at:
> http://www.amibroker.com/
>
> Check group FAQ at:
> http://groups.yahoo.com/group/amibroker/files/groupfaq.html
>
>
>
>
> Check AmiBroker web page at:
> http://www.amibroker.com/
>
> Check group FAQ at:
> http://groups.yahoo.com/group/amibroker/files/groupfaq.html
>
>
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--
Cheers
Graham
http://e-wire.net.au/~eb_kavan/
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