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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (14162)	9/21/2001 12:23:27 PM
From: fut_trade	Read Replies (3) \| Respond to of 18137

"The 90s nostalgia of a statement like this almost brings tears to my eyes ;-). You don't see the same degree of numerical testing because swing trading is primarily discretionary." Maybe I'm too focussed on trading the S&P 500 futures, but my idea of swing trading is buy or sell at a certain price level and follow price with a trailing stop. For daytrading one would simply close out the position at the end of the day if the position hasn't been stopped out. The best swing trading systems I've seen win near 80% of the trades. The best daytrading systems I've seen win between 40-60% of the trades, but they have a net average gain per trade to make the system profitable. I've done testing with Bollinger Bands, DeMark indicators, Moving averages, etc, and I have trouble just beating fees and slippage with those. Sure they will have times when they are profitable, but they always have stretches where they lose, and on average they don't generate a lot of profit. Some folks use patterns to trade. Obviously, it's difficult to test pattern trading rigously, but if the patterns are so difficult write code for, then who is to say two people will recognize the same pattern on a particular chart. Testing most be done on a large set of data. By the time one realizes that a particular pattern "as they see it" is not generating a net profit, it could be years later... I sincerely wish that technical analysis books would address this issue. One needs to have buy, sell and stop levels to make a system for a particular chart pattern or indicator, and the system needs to be tested to show that it indeed makes a significant profit.