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Strategies & Market Trends : Technical Analysis - Beginners

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To: Richard Estes who wrote (4260)	4/17/1997 4:29:00 PM
From: David R. Evans	of 12039

Hello Richard, That's Right!!!!!!!! You must system test... Do not just look at the chart and try to eye ball it because your eyes will not always tell you the truth. Set your system test to buy at the NEXT open because that is more realistic.... Now look and see how many successful trades you would have had AND how much of the advance you would have captured.... Example... Say a stock has gone up 25 points in the past two years. You run your system test and you find that your new system had 8 trades with 7 of them winners!!! Well that sounds great BUT before you go running to the Bank to get a loan look at how many points you captured. If you only got 5 or 6 points with your seven winners is that enough??? Remember, we are talking about 5 or 6 out of a possible 25........ Now if you look at your system and you see the same 7 out of 8 or even 6 out of 8 AND 15 or more points captured you just might have something there.... Now you must run the same system test on other stocks and look at those results... If you find these results to be consistent with most of your stocks then you have a system you can trade... If not, start looking for another system... Dave Evans

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