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At 11:46 AM 8/9/98 -0500, charles meyer wrote:
>I want to publically thank Earl for his excellent post where he shared
>his "detailed backtesting of DiNapoli's displaced MA's using daily S&P
>cash data from 1970-1997 using MA's from 3 to 25 in increments of 2
>and displacements from 1-7 in increments of 2. To quote further, he
>concluded that: "I could find no displaced MA which provided consis-
>tently profitable entry and exit on both long and short side or on either
>side individually. Like about every fixed frequency indicator I've ever
>tested, they did well in trending markets and got whipsawed badly in
>trading markets".
>
Charles and Earl,
The displaced moving average as implemented by DiNapoli is not a
mechanical signal generator. His training materials specifically
state that. The displaced moving average is only one of three
indicators which are used to define TREND. Once trend is determined,
then LEADING indicators are used to position the trader in the
right direction. DiNapoli himself does not use the displaced moving
average to reverse positions, it would be foolish to do this.
As far as whipsaw, the displaced moving average will reduce whipsaw,
but no moving average can eliminate whipsaw.
I find his methods profitable with liquid stocks, and have helped
traders learn these techniques on the DiNapoli web pages.
-Neal.
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DiNapoli Fibonacci techniques -
http://www.fibtrader.com
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