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Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: Ken Adams who wrote (8011)	6/4/2000 4:30:00 PM
From: Dr. Stoxx	Read Replies (2) \| Respond to of 39683

Thanks, Ken. I was just eyeballing the last 5 months on timely, which looked good (with either 5/8 or 8/10). Good to know the fuller picture. I don't have yet much confidence in finding a workable, profitable MAX system for EOD trading, except perhaps one which got us into longer term trades, and a long-only sort of thing... I do remember once doing a manual backtest on CSCO, INTL and MSFT using MACD crossovers only. As I recall, over a 2-year period (97-98), there were about 5 or 6 trades per year, and the returns beat B&H (going long and short). Just a thought... TC

To: Ken Adams who wrote (8011)	6/4/2000 4:41:00 PM
From: jesso	Read Replies (1) \| Respond to of 39683

I think the problem with a daily crossover system on a long term basis is that you will take some huge losses if you don't use stops. If you're talking about a longer time frame like 3-5+ years I think we can all agree that it would generally be best to just buy and hold "good" stocks. In contrast, to use SAWS as an example, it returned 490% on the long side if you traded it using our current 60 minute system since the day SAWS started trading till last Friday. If you just bought and held it for the same time you would have made 390%. On the short side the MAX system would have only returned 73% but that's to be expected considering that shorting on a long term basis is a losing game in an overall bull market. This is just one example, but it does factor in commissions of $10 per trade. If you had a fully automated system that placed all the trades for you (it's possible), you would have done no work and made 490% in less than 4 years. And this is if you only exited a long position when the 5EMA crossed under the 8SMA. If you added in some type of profit stop (x% trailing stop, dunnigan bar count, etc.) you could improve on these results. Another thing to keep in mind is that this was starting with less than $3000 and buying only 200 shares for each of the 250ish trades. If you started with $3000 and 200 shares but traded as many shares as your equity allowed on every trade, the return is waaaaay more than 490%. And this is only SAWS. Others I've tested the same way have returned over 1000% in less than 5 years. I've tested 12 so far, all for 3-10 years, and not one has lost money. Again, I don't think anyone would want to trade the same stock for 5 years using the same system as you could improve your results by picking the right stocks at the right time and/or modifying your system, but it does somewhat refute the idea that a particular system can only work for a short time and/or in a particular and specific market environment.