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>The buy at 3:00 on Friday I was just too chicken -- I would not have done
>it going into the weekend. I thought it would be too risky.
>
>If anyone would care to comment (kindly please) on what criteria you might
>use to "adjust" trade rec's from a mechanical system.
Denise,
You are essentially looking for additional filters and rules for a system
still under construction. As you papertrade, you'll run into new situations
that you hadn't thought of yet. There will always be new situations.
You passed Friday's trade because of the time of the signal, and perhaps
also because it came so soon after a failed signal. Both of these factors
can be backtested to find out if they should be rules in the system:
time of day/day of week, and bars between signals.
When you ask what criteria to try... we don't know the basics of your
system, so we're operating in the dark if we suggest improvements.
At this point your papertrading may serve to suggest further research.
When you hesitate, find out if the reasons are valid, turn doubt into
knowledge.
When you are reasonably satisfied and ready to trade with money, take all
trades for at least a 30 trade run. You have shown that the rules as stated
produced a profit over the backtesting period, despite any other detail
or nuance that has escaped your attention.
You'll find that a lot of the key winning trades still manage to have
something "wrong" with them, some fatal doubt that scares you to death
and goes against every human emotion. Conversely, the losers and break-
even trades are easy to enter: they "look good" and there's lots of
lead time to see them coming.
If you "adjust" your system at this late stage, you will almost certainly
botch it. Your system is based on backtesting of what actually happened.
Your overrides are based on logic, common sense, and emotion, none of
which works in the S&P.
Wayne Moody
wlm95@xxxxxxxxxx
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