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An all new formula produces huge system test profits.
The Naysayers are right, again as usual. However the point of this
post was to find out why DETREND was so profitable in a system test,
and perhaps also answer why other indicators are so frequently
UNprofitable. My theory was that perhaps indicators are just simply
out of sync with the cycles of the stock under test. I didn't really
care that it didn't make any REAL money.
To prove this theory, then it is only necessary to set up a
different system test using the simplest indicator of all. Nothing
is simpler than the moving average. Can a simple moving average
crossover produce spectacular system test prifits if it is shifted to
be in sync with it's stock? The answer is ABSOLUTELY YES!
We set up a new profit test as follows:
TITLE MovAvg10 Real System
ENTER LONG:
MA10:=Ref(Mov(CLOSE,10,S),5);
Cross(ma10,Mov(ma10,3,S));
CLOSE LONG:
MA10:=Ref(Mov(CLOSE,10,S),5);
Cross(Mov(ma10,3,S),ma10);
Where the REF function shifts the moving average to the left by 5
days. And then we set up a new custom indicator to see why it was
sooo profitable. And we see that the new 10MA is in perfect sync with
the stock. Prove this by also laying in a normal 10 MA.
TITLE: MovAvg10 Real
MA10:=Ref(Mov(CLOSE,10,S),5);
ma10;
Mov(ma10,3,S);
And of course, this system test won't make any real money, either
because the signal to buy today won't be seen for 5 more days. But
that doesn't matter because this new profitable system test proves
that Detrend was profitable ONLY because it was in sync with the
stock under test and no other reason.
Now we can say with a fair degree of confidence that if we want to
make consistent profits our indicator MUST be in sync with the
stocks cycles. Cycles are everything. And as the Naysayers have
suggested, that hard right edge of the indicator which is required
for trading todays data likely makes it impossible to also be in sync
with the market cycles. Or does it? Might it be possible to somehow
extrapolate the latest cycle from a shifted indicator into todays
data? Has anyone done any work on this concept?
Perhaps it is simply impossible to extrapolate a market cycle into
today's data, and this entire exercise is another dead end ? Any
ideas here?
Grizz
--- In equismetastock@xxxx, anthony chia <anthonychiasl@xxxx> wrote:
>
> I agree with Roy and some of the others, that you can't reference
to the future data the way you did. The whole idea of TA is to use
an existing set of historical data to try to "predict" what the
future may likely to be - yes, we are also talking about probability
or chance. What you are doing is you are subscribing to HINDSIGHT;
and that will not do.
> Sure, continue to work hard to get to something that will work for
you, that suit your emotional make-up and profile. Learn ON
HINDSIGHT BUT DON'T TRY TO GO BACK IN TIME..... unless you have a
time-machine.... that works!
>
> My 2 cents worth!
> Anthony Chia
> PS: This is a re-send, 1st one did not seem to be posted in list.
> grizz003 <no_reply@xxxx> wrote:
> Preston,
> You are right on... and the search for that Holy Grail goes on.
> However I can say that the spectacular profits provided by the
> Detrend Oscillator really gave me a shot of adrenalin. My spirits
> were boosted dramatically to find anything at all that provided
100%
> profits on every stock tested.
>
> If I find anything else promising, I'll post a follow up message.
In
> particular anything that makes it over to that Rock Hard Right
Edge.
> Now on to that little spot between the rock and that hard place
> : -- ) )
>
>
> One last thought: Here is a web site with a massive collection of
> Metastock formulas:
> http://www.guppytraders.com/Metastock%20Formulas/formula%
20index.htm
>
> Another web site that is even more spectacular and sometimes allows
> access without a password:
> http://eis.pl/kr/AFM/index-en.html
>
> Grizz
>
>
>
> --- In equismetastock@xxxx, pumrysh <no_reply@xxxx> wrote:
> > Grizz,
> >
> > I believe there is a difference between the Equis DPO and other
> DPO's
> > out there. Maybe we should look at another formula for DPO that
> will
> > plot to the hard right edge.
> >
> > BTW: I played with the DPO many years ago and came up with a
system
> > that would have made me look like Gates in no time. I believe the
> > archived messages of this group still contain some of the
original
> > posts from 1999. To make a long story short, when I realized that
> the
> > last few days weren't plotting I gave up.:-(
> >
> > Preston
> >
> >
> > --- In equismetastock@xxxx, grizz003 <no_reply@xxxx> wrote:
> > >
> > > The Nay Sayers who argue that it won't work because "Future
Data"
> > is
> > > required are correct, of course, but also way off base. I think
> the
> > > Naysayers should instead be asking, "WHY IS IT SO LUCRATIVE
WITH
> > OLD
> > > HISTORICAL DATA" In actual fact, this profit test runs from the
> > left
> > > side of the chart where OLD HISTORICAL data begins showing
> > > spectacular profits almost immediately. There is simply NO
future
> > > data to be found at the left end of the chart. Right? Of
> course ! !
> > > That "Future Data" argument does not apply until we get to the
> > right
> > > side of the chart. The formula just can't be used to make real
> > money
> > > because a signal for today won't come for another 10 days. Yet
> this
> > > lucrative formula cannot be dismissed. Why does it work so well
> > with
> > > old historical data?????? And just HOW profitable? 125 stcks
> picked
> > > at random had 125 profits, and NO losers. Some profits ran
$1,000
> > > into $225,000 in just a few years. Only the Metastock "Maximum
> > Profit
> > > System" provides equal or greater profits.
> > >
> > > I was always really pissed off at Equis for keeping
> their "Maximum
> > > Profit System" a secret. We know it can't be used to make real
> > money,
> > > so why keep it a secret??? Can't we can all learn at least
> > something
> > > from every formula we look at? Shame on Equis for hiding their
> > > formula.
> > >
> > > Now to answer your own question. The "Grail" formula is nothing
> > more
> > > than the guts from the DPO(periods) formula which is the
> Detrended
> > > Price Oscillator.
> > >
> > > Put this into your system testor:
> > > ENTER LONG:
> > > DPO(20)< 0 AND Cross(DPO(25),Mov(DPO(25),3,S))
> > > CLOSE LONG:
> > > DPO(20) > 0 AND Cross(Mov(DPO(25),3,S),DPO(25))
> > >
> > > You will see the same stunning profits on OLD historical data
> which
> > > has nothing to do with future data ( until we hit the right
side
> of
> > > the chart ).
> > >
> > > To see why this is so amazingly profitable, make a custom
> indicator:
> > > Title: DETREND WITH TRIGGER
> > > DPO(20);
> > > mov(dpo,3,s);
> > > 0; {centerline}
> > > With this custom formula displayed on the screen, we can better
> see
> > > WHY it works.... Now the goal for this astute group of traders
is
> > to
> > > find out why it works and then modify it to work better. And I
> > think
> > > the KEY is in properly defining and using the CYCLE of the
> > underlying
> > > stock. Clearly detrend has an EXCELLENT grip on the stock cycle.
> > >
> > > The journey of 1,000 miles consists of 1 little step at a time.
> > > Detrend is a great 1st step which proves that at least
something
> is
> > > consistently profitable, even if it is flawed. Consider that
> > several
> > > things equal to the same thing are equal to each other.
> > >
> > > To answer another question, I'm sure that Detrend can be just
as
> > > profitable or even MORE profitable than the Equis "Maximum
Profit
> > > System" by tweaking the DPO periods.
> > >
> > > Grizz
> > >
> > > --- In equismetastock@xxxx, "robert@xxxx" <robert@xxxx> wrote:
> > > > praktikus:
> > > >
> > > > Could you give some detail on the adaptive moving average
> > > > that you are using? Did you write some Metastock code for
> > > > it? Would you mind sharing it?
> > > >
> > > > Thanks.
> > > >
> > > > Bob
> > > >
> > > >
> > > >
> > > > Original Message:
> > > > -----------------
> > > > From: praktikus_ms mluescher@xxxx
> > > > Date: Wed, 23 Oct 2002 19:32:52 -0000
> > > > To: equismetastock@xxxx
> > > > Subject: [EquisMetaStock Group] Re: Huge System Test Profits
> > > >
> > > >
> > > > Hi grizz
> > > >
> > > > did you compare your system with the "MAXIMUM PROFIT" System
> that
> > > > came with MS? Guess the profits would even increase ...
> > > >
> > > > Honestly said wouldn't it be perfect for all of us to know
> > exactly
> > > > where that the price of a stock (option, future, name what
you
> > want
> > > > to) is in a month, a week, a day or even by the end of the
day.
> > > Sure
> > > > thing we all would be much better in our trading.
Unfortunately
> > we
> > > > all can't see what will happen in the future. For tjis reason
> any
> > > > system using Ref( , plus value) will not work out in reality.
> > > >
> > > > How can you say that none of your tests worked with a
positive
> > > > result? If this was true, none of the traders would be around
> by
> > > now.
> > > > For my own small piece of fortune I trade a moving average
> System
> > > as
> > > > explained by Perry Kaufman in "Smarter Trading" (the adaptive
> > > moving
> > > > average) with European bonds (comming from Europe so please
> > excuse
> > > my
> > > > typing) and it works out pretty well. Maybe you share some of
> > your
> > > > thoughts so we can improve the thing for better?
> > > >
> > > > Greets, praktikus
> > > >
> > > >
> > > >
> > > > --- In equismetastock@xxxx, grizz003 <no_reply@xxxx> wrote:
> > > > > You are right, of course. But that is not the point of this
> > > system
> > > > > test. The point of this test is this: It is extremely
> > profitable
> > > > as
> > > > > a system test when using REAL data that already exists in
the
> > > > array.
> > > > > It's moving average is shifted left to match the stock's
> > cycle.
> > > > Why
> > > > > is it so fantastically profitable using REAL data? And even
> > more
> > > > > important, why is everything else so consistently
> UNprofitable
> > > > using
> > > > > REAL data in the array?
> > > > >
> > > > > Why is this so fantastically profitable?? In my opinion,
> > because
> > > it
> > > > > is based on the REAL cycle of the stock under test. Why is
> > > nothing
> > > > > else profitable? Because nearly everything else is based on
> > > cycles
> > > > > that are LATE or do not exist.
> > > > >
> > > > > So we can all agree that this system test is less than
> perfect,
> > > and
> > > > > it cannot be used as is for real money trading. The value
> here
> > is
> > > > to
> > > > > show that at least SOMETHING can produce spectacular
profits
> on
> > > > real
> > > > > data. It is perhaps the best starting point to investigate
> why
> > it
> > > > > makes money, and what can be done to fix it's problem. A
> > > profitable
> > > > > approach can lead to better profitable approaches.
> > > > >
> > > > > Grizz
> > > > >
> > > > > --- In equismetastock@xxxx, "praktikus_ms" <mluescher@xxxx>
> > wrote:
> > > > > > I see just one little thing to cause some worries: the Ref
> () -
> >
> > > > > > function used looks in to the future (dd1 = 20 -->
> 20/2+1=11 -
> > -
> > > >
> > > > > this
> > > > > > means that you look 11 days in to the future from today -
> > what
> > > is
> > > > > > impossible to me as far as I know ;-) ). For this reason
> you
> > > > > wouldn't
> > > > > > be able to trade this system.
> > > > > >
> > > > > > praktikus
> > > > > >
> > > > > >
> > > > > > --- In equismetastock@xxxx, grizz003 <no_reply@xxxx>
wrote:
> > > > > > >
> > > > > > > Can anyone beat the fantastic system test profits
> generated
> > > > from
> > > > > > > these formulas?
> > > > > > >
> > > > > > > Enter Long:
> > > > > > > ==================
> > > > > > > dd1:=20;dd2:=25;
> > > > > > > grail1:= C-Ref(Mov(C,dd1,S),dd1/2+1);
> > > > > > > grail2:= C-Ref(Mov(C,dd2,S),dd2/2+1);
> > > > > > > grail1 < 0 AND Cross(grail2,Mov(grail2,3,S))
> > > > > > >
> > > > > > > Close Long:
> > > > > > > ==================
> > > > > > > dd1:=20;dd2:=25;
> > > > > > > grail1:= C-Ref(Mov(C,dd1,S),dd1/2+1);
> > > > > > > grail2:= C-Ref(Mov(C,dd2,S),dd2/2+1);
> > > > > > > grail1 > 0 AND Cross(Mov(grail2,3,S),grail2)
> > > > > > >
> > > > > > > Set System test for Longs Only. No stops.
> > > > > > >
> > > > > > > Grizz
>
>
>
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