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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: Richard Estes who wrote (2901)11/6/1997 10:18:00 PM
From: Richard Estes   of 3325
 
Another thing for newbies to incude in their analysis. lets say your system contains being above 200 MA. Your system can't even give a signal for nearly a year. Buy and hold gets a jump start from first day of data. Those working with 2 years data can't really evaluate the system. We are in the biggest bull ever. buy and hold looks good when you look at this bull, but they better have a exit point, some day they will need it.

I always love to point out if you bought IBM at 1987 high, it took you to 1997 to get even. If your data only covers last 3 years, buy and hold looks good. Back in 94 you could have bought IBM at 26, now 101.3; that is like a stock going from 2.5 to 10, or 5 to 20, or 10 to 40. How many stocks have you seen beat that in one year or less not 3 years?
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