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I, too, am interested in this question. However, I would pose it
slightly differently:
1) is there any real evidence that suggests complex systems will
work better than simple ones?
2) to what extent is it valid approach to find a market that works
well with a given system (be it simple or complex) and use it
successfully on that market, even if that system doesn't do well in
related markets? In other words, find the market that works on a given
system rather than the other way around...
The reason for my questions is I am currently testing a rather simple
system that uses a well-known indicator and some straightforward but
logical entry and exit rules. I have found by much study that this
system does not work universally well on many (30 or 40) stocks I have
tried it with, however, I have found 2 stocks that it works
exceptionally well with, and I am ready to start trading it. I am well
aware of the dangers of over-optimization, and that is one reason why I
have kept the system simple. However, I don't know whether to be
concerned or not that it works so well with these markets and much less
so with others. I welcome the comments of others who may have tried
this approach, either successfully or unsuccessfully.
Robert W Cummings wrote:
> Members:
>
> I put this partial post from another trading list I'm on. I decide to
> put
> this here to see what this list thinks of these remarks. Seems to me
> that
> there people out there that somehow believe they can take the gamble
> out of
> trading through more sophisticated trading methods. Maybe there are
> people
> out there taking our money trading against our indicators we use in
> TS. Has
> technical trading already moved to a higher level than TS can offer
> and
> when our indicators work and make us money are we really just
> considered
> lucky by some and doomed long term.
>
> Robert
>
> >From another list a partial post;
>
> Simple gambler functions like RSI, stochastic (which, incidentally,
> comes
> from the Greek "stokhazesthai," meaning "to guess at"), and the like
> will
> be
> difficult to find until we and various users write them. However,
> there
> will be no shortage whatsoever of truly valuable functions from many
> sources
> .
>
> No one makes money over the long term using popular indicators, except
> by
> chance. They work in back-testing only with optimization that matches
> them
> to what happened in the past. They work in the future only in
> fantasies.
> They are great for gambling. They are great for professionals trading
>
> against those who use them. They are worthless to anyone trading with
> them
> for income.
>
> As those who don't already know learn the truth of what I just said
> through
> the loss of hard-earned money, they will be ready to advance to
> professional
> tools that actually work. When they are, TradeLab and VB will support
>
> almost any advanced market analysis tool imaginable.<
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