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

To: Dave Bissett who wrote (8066)	6/6/2000 7:56:00 AM
From: MMK	Read Replies (1) \| Respond to of 39683

Dave, Can you tell me please what you are referring to with your mention of "signal line crossovers is much more profitable than trading on, for example, MA crossovers or stochastics crossing arbitrary values." What is/are the signal lines referring to? thanks...MMK

To: Dave Bissett who wrote (8066)	6/6/2000 9:47:00 AM
From: Triffin	Read Replies (3) \| Respond to of 39683

Dave/Jesso .. Lets not cross the line from model/system development to data-mining .. I'm not sure that it really matters wether BTTT-MAX is 5ema/8sma for 60 minute charts or if 4ema/8sma will 'look' better or if it is some other combination of MAs and periodicity that 'works' best. The backtesting is only going to reveal which stocks best fit whatever particular parameters you are testing .. Rather than trying to 'fit' the model to the market, our efforts should be spent finding the stocks with the 'right' characteristics ie volatility and trend smoothness for whatever set of parameters the thread settles on .. Any trend-following model is going to work provided the stocks selected continue to exhibit 'smooth' price trends .. Another point is that trading models are almost never 'symetric' ie the 'optimized' set-up or parameters used to 'define' one's opening trade .. ie go long or short when the 5ema Xs the 8sma on hourly charts .. is not necessarily the best definition of when to liquidate any given trade .. the objective is to maximize profits once a position has been taken based on a BTTT-MAX event .. MACD,stochastics,RSI, money flow distance from MA, etc may provide a means to define a liquidation rule rather than a BTTT-MAX event in the opposite direction .. What I'm trying to say is .. don't fall into the Holy Grail Hunt trap .. BTTT-MAX as defined is 'good' enough for trade 'set-ups' .. We should automate screening for suitable candidates for our 'stable' and develop a profit taking rule to maximize the P&L from open trades .. Jim in CT .. Just my 2c ..