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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: Stephen Zodkoy who wrote (835)4/23/1997 10:49:00 AM
From: David Russell Coburn II   of 3325
 
Hello Stephen,

I am absolutely aware of what you are saying. This is exactly where I am at in my learning about system tests. I don't have a good answer as of yet. Last night I went through 2%, 5%, 10%, and no stops on DAHL compared to other systems. The no stop system always did the best.

There is a conflict between two primary tenants here.

If you put a 10% stop loss on DAHL for example it does much worse than before. There is a conflict here between the "10% down and get out idea" and the "trust your system the way it was tested idea". If anything will start a debate this will. If Dahl gets great results without a stop of any sort, why would you use one. You would not be obeying your system! Also if your system included getting out if you have a 10% loss why would you use it if you knew that it worked better over time on many stocks with no stop at all?? Hows that for stirring the mud?<g>

I'm not advocating not using stops, I am asking for reasons that will reconcile the two ideas of "trusting and using the best testing system" and "never letting your losses fall below x percent"

Lets here it!

David
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