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Gold/Mining/Energy : Daytrading Canadian stocks in Realtime
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To: Brennan Wilkie who wrote (11959)5/9/1999 10:49:00 PM
From: keith massey  Read Replies (3) of 62348
 
I believe that any analysis is good if it can be used positively, even though to you it may seem useless others may find it helpful

I very very strongly disagree with this statement. The reason I find the TA analysis your using on penny stocks useless is that it gives more whipsaws than it does positive signals. How can analysis that is only right 50% of the time be helpful to anyone? I might as well flip a coin....HEADS...quick everone buy.

I have back tested (system tested) hundreds of stocks (both pennies and blue chips) in Metastock using all the standard indicators (MACD,RSI,EMA crosses, etc) over multi-year periods just to see how good these indicators actually worked. I spent months back testing stocks when I first started hardcore TA to get a good feel on what works and what doesn't. Guess what...nothing worked consistently on penny stocks. Often by the time the pennies move and give a buy signal on a standard normal delayed oscillator like the ones your using (MACD, RSI) the move is already over and the stock is pulling back.

I urge you to go back and system tests some stocks on paper. Buy on the MACD breaks and sell on the declines. Be honest with the numbers and see how much you make in the long term.

Again this is only my opinion and I am open to suggestions from anyone who thinks they have an oscillating indicator that works with penny stocks. I would be happy to code it and system test it on a series of stock and give the group the results. If someone gives me one that actually works I will be happy to eat crow.

Best Regards
KEITH
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