Re: OEX Swing m/c, Trading sytems and markets

["Gary Fritz" <fritz@xxxxxxxx>]

"Earl Adamy"

wrote: > Trading a variety of markets successfully both long and short > requires a great deal of human intelligence and selectivity > regarding the type of trading pattern (trading or trending), > market psychology, inter-market influences, and time frame. I > think that the point we were trying to make is that ultimately, > most systems which have been employed successfully in this great > bull stock market, will crash and burn in trading or bear markets > - too many of them have been over optimized for a trending bull > market.
Agreed. Too many system developers fall prey to the "mistaking a bull market for genius" problem and don't realize their great systems are relying on a radically turbo-charged bull.
I don't trust the market to keep going up forever. That's why ALL my systems are blind to direction. Up, down, they don't know the difference and don't care. That way they should behave roughly the same whether we're in a raging bull or a punishing bear. The price action may be somewhat different in a down market than in a bull, but other than that the system won't see any difference.
In the last 3 years the ND (the market I trade) has tripled, yet my system got 43% of its profits from shorts.
That way I don't have to try to guess the market's current mode. Which is good, because I'm lousy at that. If the market goes into a protracted sideways mode, my system can get hammered. But sideways modes of the size and periodicity required to hoodwink my system are usually of fairly short duration.
At least they are in the (too short) period I've tested. Maybe I'll get sucker-punched when the market changes character. :-)  Gary