Briefly, this system I was testing since the Spring just rolled me over to long. Short contracts were closed out and longs established at various prices in the 81 range.
< If it stayed long thru the 87 decline, would make it much more iffy.>
Got the same remark from a guy in Seattle, referring to Net Models. I imagine that, if one were to test it completely one then should actually pick around 1980, 82, to see how long it takes the system to jump on the Bull Run and also how it dodges the 87 decline. Also, important may be how much profit it had accumulated prior to Fall, '87. Judging by my recollection of '87, I am of a mind that it probably would have gone flat as the '87 market topped out around August. This year, the high was late July and the system went flat in early September. Judging by that alone, perhaps it would have exited in early October. Of course, a lot would depend on the summer momentum and extension of the market in that year.
<Ever thought of reverse trading a system that loses a lot of money?>
I'm convinced it does not work. There was quite a bit of conversation about that at that seminar. One guy had several models that did well with the Bond but got crushed in the Spoo.
First of all, I think the system tends to correct when it is losing and just may send you a buy signal that you will interpret should be a short. If the system was truly a mirror it might not reverse it's signal.
The debate by the Ivory Tower dudes was that one could invert a variable in the system; by so doing, they theorized, one would turn a losing system into a profitable one. However, I am reluctant to think one could find the "right" variable to invert.
Of course, this is my opinion and everyone has one. I have no psychological; problem with it at all. As a matter of fact, I am of the mind that Fred does the exact same thing. My recollection is that the P-Stop is a tool designed for exits, not entries.
If Fred does not know this perhaps we should not tell him. Psychological damage and so forth.
Anyway, I started this week with a Bullish attitude but the systems had me selling. Time will tell if I continue to rely on Mechanical Systems or revert to Discretionary trading. |
