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In a message dated 8/12/98 8:27:12 AM, sbuss@xxxxxxxxxxx wrote:
<<Can someone (perhaps Mark) point to one or more examples (symbol, date/time,
indicator, etc. or gif) of something looking good on a chart (to a
knowledgeable technical trader) that doesn't work in real trading?>>
Here is an example. Look at a large sample of futures charts and make a mental
note of how many of the tops and bottoms are key reversal patterns. It would
be quite easy to conclude that there is some significance to this pattern
because it appears so often at major turning points. However when looking at
the charts our eyes tend spot the patterns at the turning points and we
overlook all the key reversal patterns that are buried within the charts where
nothing happened. The computer easily finds all the patterns and quickly
shows us that they have little forecasting value.
One of the most important benefits of using testing software is the ability to
teach us what doesn’t work. I personally find that I currently know only
about 10% of what I thought I knew ten years ago. Soon I will be down to 1%
and hopefully be a better trader as a result.
Chuck
traderclub.com
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