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Strategies & Market Trends : Technical Analysis- Indicators & Systems -- Ignore unavailable to you. Want to Upgrade?

To: Richard Estes who wrote (2901)	11/6/1997 9:05:00 PM
From: kx	Read Replies (1) \| Respond to of 3325

Designing a trading system, four criteria have to be met. Once these 4 criteria met, your system considers to be quite robust. 1. The net profit has to beat buy and hold. 2. The system has to work in all markets. Universal system !! 3. The system can not be optimized for any market. 4. The annual equity curve has to increase year over year, and also has to beat the buy and hold in that year. GOOD LUCK in your endeavor. I am still working on the system to meet these 4 criteria.

To: Richard Estes who wrote (2901)	11/6/1997 10:18:00 PM
From: Richard Estes	Respond to of 3325

Another thing for newbies to incude in their analysis. lets say your system contains being above 200 MA. Your system can't even give a signal for nearly a year. Buy and hold gets a jump start from first day of data. Those working with 2 years data can't really evaluate the system. We are in the biggest bull ever. buy and hold looks good when you look at this bull, but they better have a exit point, some day they will need it. I always love to point out if you bought IBM at 1987 high, it took you to 1997 to get even. If your data only covers last 3 years, buy and hold looks good. Back in 94 you could have bought IBM at 26, now 101.3; that is like a stock going from 2.5 to 10, or 5 to 20, or 10 to 40. How many stocks have you seen beat that in one year or less not 3 years?