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I find that few people take the time to do intensive backtesting.
Super does it. I have spent many hours testing electronically and
even more manually. I hedge and use stocks and put options in an
integrated system. Works for my risk level and helps me get a
smoother equity curve in up and dn markets. . Most trading systems
have poor results and very few provide high return percentages. A
50% return system with a 1.5:1 win:loss ratio is not unusual. That
means you will run into 5 bad trades in a row with 90% confidence if
you trade it for a while. Risk management becomes critical to
survive those drawdowns and a supreme confidence in the system to
pick up the gains that follow.
The few that do well - after hours and hours of development time,
there are few reasons why anyone would just spill it out on a site
like this free and at no charge..
I have found 9 out of 10 softwares sold for Metastock a waste of
money. Books are no different. One of my favorites is a
recommendation from Super years back - so I would suggest paying
attention to his suggestions.
- And does anyone have a good recommendation on books dealing with
trading systems using dual or multi time frame analysis? I haven't
found any.
Regards..
--- In equismetastock@xxxxxxxxxxxxxxx, superfragalist <no_reply@xxx>
wrote:
>
> I've read a lot of trading books. Probably well over a 100.
>
> None of the TA books I've read have ever had any kind of method,
> strategy or system that tested out well except during strong market
> trends. Very few of the books have ever included any substantial,
or
> even much in the way of unsubstantial, test data that is of any
> quality or value. I wonder why they left that out since it is
critical
> to evaluating any trading strategy?
>
> Here are a few books with unbiased test results that will give
anyone
> a clear understanding of what TA can and won't do for them.
>
> Thomas Stridsman includes comprehensive test results in his books
> Trading Systems that Work and Trading Systems and Money Management.
> Those are eye opening also. Stridsman tests trading strategies for
> hedgefunds so he's no dope.
>
> The Encyclopedia of Technical Market Indicators by Robert Colby
has a
> lot of long term test results on a variety of indicators and
trading
> methods. Another eye opening book.
>
> The Encyclopedia of Trading Strategies by Jeffrey Katz and Donna
> McCormick is very comprehensive in examining all kinds of trading
> methods. This is a good breadth book.
>
> Evidence Based Technical Analysis by David Aronson is tough to
read in
> places, especially for those who don't understand or like
statistical
> analysis, but it will disabuse those who think that TA is a magical
> method of making money. I've said before my opinion and experience
is
> TA provides little help in making money unless there is a confirmed
> trend in the market. Then TA provides a little assistance.
>
> Here's my opinion on what works on US equities.
>
> Limit your trading to uptrends from Oct 1 to May 30 or some other
> market conditions filter that you've tested.
>
> Trade from a list of stocks prescreened by fundamentals and
> quantitative methods. I use Valueline but there are other lists
that
> are also good.
>
> Use a simple trading method.
>
> Keep your portfolio to 25 or so stocks.
>
> Okay, so do I apply the same scrutiny to myself as I do others in
> regard to backing up their methods with test results? You bet. I've
> tested this stuff and many of the test results were presented in
Roy's
> newsletter over the last few years.
>
> Sure others will disagree with this method. No problem. Just ask
them
> for their test data, and if the test results look good, cover a
broad
> range of market conditions and meet rational testing methods,
they've
> got something worth looking at.
>
> Super
>
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