|
PureBytes Links
Trading Reference Links
|
Hi,
Thanks for all the intelligent and interesting responses to my original
post. Its certainly more interesting than the usual flames.
Perhaps I was a little too hard on backtesting. I certainly have spent
literally 1000's of hours going over the markets, especially the S&P. My
point is this: the S&P is a completely different animal than it was, say,
two years ago. Especially when one looks at daily range and slippage. Plus
the range in a typical 10 minute or 144 tick bar chart (which are the
charts I have always followed) is substantially larger than it used to be.
Subsequently, one's stops have to be larger as well as one's ability to
"take the heat."
As far as my opinion of TradeStation systems goes, I have just never seen
one that performs on a "reasonable" basis for more than one or two
quarters. Oh, I suppose there might be some successful systems out
there...but they are probably not for sale.
But I do maintain that one cannot successfully backtest a TS S&P system.
In a perfect world (or market), yes. But the S&P is far from perfect. Far
too many times TS "thinks" it got in a trade when in reality, the fill
either wouldn't have happened or the slippage would have been horrendous.
No way to truly guage that.
The Bullseye Indicators I use are successful. But I ( and numerous other
traders) have never been able to successfully code them into a system that
worked day in, day out. I have never been able to match my results using
the indicators when I've tried to follow the system. Do I know why? No.
Just that I am very happy interpreting my indicators (and they are NOT
subjective) and placing my orders.
Plus systems cannot know what's happening in the outside world, i.e., do
we trade ahead of reports no matter what? Or do we wait for the results and
then follow our rules for entering the markets. Granted, this is more of a
factor in the T-Bond market than the S&P, but I have been burned more than
once when I have forgotten the monthly Philly Fed 10a report, for example.
What about FOMC Fed meeting days when the results are announced at 215p?
Market gyrations during the next half hour are usually erratic, to say the
least.
Look guys, I am not trying to knock anyone or any system. I just firmly
believe that an accurate set of indicators and a sound methodology is a far
better bet than a TradeStation automated system. I also believe that
backtesting a TS system returns dubious results. And I trust myself far
more than I would trust up and down arrows on my screen.
Again, as I said yesterday, I make my living using TradeStation and
trading the futures markets. I think its a great product ( Although I do
hope our mutual Y2K problem is addressed in a timely fashion).
BTW, for newbie stock index traders, I strongly recommend trading the Dow
Jones 30 futures at the Board of Trade before trying your hand in the S&P.
The risk is much less however, and it trades much like the S&P. I would
consider it a good training ground for the S&P. I have found it very
satisfying.
Jim
|