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After a couple of days of frustration with attempts to produce a 90% win
Demark Sequential system that TradeWins Publishing has been advertising, I
must say "I could not do it".....if someone out there can, please show me
the way. I am trying to get to $118,925 of profits between 1/96 and 6/00
using it....and of course a 90% win/loss ratio too.
Attached is a Demark-based customized signal and related indicators
used....as well as an S&P 500 equity graph from Jan 96-> Jun 99....
5 minute bars were used.
www.javazon.com/test/tdscalper.ela
This was an amazing study....if you look at the equity graph, it shows a
good trend up till Oct98 and then WHAM !!
The "system" just blew-up. Being a stochastic-based system, you'd think it
would just love that time-frame.
However, the "choppiness" just killed it until March99 when it
recovered...slightly....then from Apr 99-> Apr 2000 it just got "creamed".
Incredibly it staged a tremendous recovery from May till June of this year.
A -2.5% stop loss was used for long and short positions....a trailing +2%
stop with .5% cushion was used for exits.
EZ Language Students: this is a terrific study....everything but the kitchen
sink is in here....Max Adverse Excursion build-out to Excel and examples of
exit MAE rules, Alley-Oop entry, key reversal exit, swing exits, Quick-out
exits, etc.
I found with short bars, nothing could "save" this system. I am not saying
the Demark Sequential is lousy, it is not...it produced some really nice
trades. It may work with 20 min or daily bars much better.
However, I discovered the signals it produced correlated almost to 90% with
the simple Omega Stochastic(18) indicator !!!! Yep, it appears as though
Demark Sequential is just another stochastic in disquise.
Who was it on this list that said recently stochastic systems are no good ?
Mark Simms
Technical Director
Index Options Group, Inc.
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