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Chuck LeBeau wrote:
"For testing purposes I would suggest that you pick a sample of stocks at
various price levels and be sure to have representative samples of Up, Down
and Sideways patterns so you can see how your system performs in each
scenario. You may also find that your system performs differently on a $10
stock vs a $100 stock."
Testing indicators and systems on a finite group of stocks or
futures has always led me to inconclusive results. I think Nirvana maker of
OmniTrader has a solution but without being able to define the system you
created based on your personality and risk profile it still puts the
creative decision on hold.
"Because all securities experience different personalities at various times,
and no one trading system works well in all types of markets, The exclusive
(A)daptive (R)easoning (M)odelT which actually adapts to each security's
current personality, and only uses the best performing trading systems to
generate buy and sell signals. As you test your various trading systems on
each portfolio item, the ARM selects only the trading systems that are
performing the best right now on that particular vehicle. So ARM actually
identifies and adapts to the personality of each security in your list. As
the best performing trading systems generate signals, ARM "votes" to form a
consensus trading signal. When its done, ARM displays these consensus
signals on the Voting Line on your charts, with the individual trading
systems that formed the consensus below in the Systems Area so you can see
exactly how ARM generated each of its trading signals. The benefit of this
method is you never have to select which systems to apply - OmniTrader/ARM
does it for you, and it's completely automatic."
This is a good start on a difficult model as to which
system/indicator fits the current profile per issue. Using backtest and
forward test hit rates along with advisor ratings you prevent forming a over
optimized vote signal. ARM forms the voting consensus needed to make a
quality signal perfectly fitted to the trading character of the instrument
traded. Still not being able to create your own systems using this approach
prevents confidence levels needed to pull the trigger.
-=-jimmy-=-
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