Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: shasta23 who wrote (7726)	1/12/1998 10:27:00 AM
From: Chandler H. Everett	Read Replies (3) \| Respond to of 12039

Stefan......yes......take your time, and learn one thing at a time, but put the advice you get from Richard and others in a file and come back to it form time to time. I have and find that what I couldn't or didn't want to understand in the past now is valuable because it finally makes sense. BW Chan

To: shasta23 who wrote (7726)	1/13/1998 8:13:00 PM
From: David R. Evans	Respond to of 12039

Hello Stefan, You are right, TEST, TEST, TEST!!! The problem with system testing is you can not capture true reality no matter what you do... The system testing can give you an idea but you need to apply logic and common sense. If you system test and you look at ALL the trades you should get an idea of the system. How many points do you capture with the wins and drop with the losers? If you see large losers and small wins is it worth the risk? Do you have a lot of small losers but one or two Monster moves? Is that worth it? When you test a system like Dahl or DNS you will probably see a few small loses then one or two real nice moves to the up side. THAT"S what Dahl and DNS are all about!! They are looking for the BIG RUNS while a system like StochRSI (8-5) or StochRSI (14) are looking for bits and pieces of that run. Only you can decide which way you want to go.. You are ABSOLUTLY right about the shortcomings of StochRSI (14) and the system tests. That's why I always use a series of exits and do not depend just on StochRSI (14) to get me out. Now, what you can & should do is LOOK AT THE CHART and see where the buy & sell arrows are. Did StochRSI (14) get you into this stock at good points in the past??? If yes the chances are it will do it again in the future. Please realize that there will be situations when you will not see a buy arrow because the system test thinks you are still long from an older trade. You need to LOOK at the chart and make some evaluations. Also remember that the MSWIN explorer will tell you ALL crosses UP THROUGH 30 and not just the true buy signals. I evaluate ALL crosses up through 30 with my other indicators when I am looking to buy, not just the "TRUE" buy signals. What am I saying here??? OK, my stock crosses up through 30 and the system test says it's a buy. I look at Dahl, Insync, DNS, StochRSI (8-5), Optimized Parabolic SAR, MACD (8-17-9), MACD (13-34-89) and maybe even 5-13-40 Xover and decide that the time is not right for this one. A week or so later I get another cross of StochRSI (14) up through 30 for this stock. This proves to me that my initial feeling on the stock was right AND maybe this time it's ready to make it's real move. I evaluate the stock all over again to see what the other indicators are saying. If they agree that the time is right, I buy.... Now you are right when you say that This CAN NOT be system tested BUT, it can be BOTTOM LINE tested..... All of the indicators I use I know. I have tested them along and in various combinations for years. I ALWAYS check my results to make sure my system is working in the current environment so I know how I am performing. Once I see that the results are not what I would like them to be I CHANGE! I may change the type of stocks I am looking at or the system I am using BUT, I will change something. I will never continue trading something that is not working..... Now, with that said please do not thing that I change things quickly or without much thought because I do not. You need to stay consistent if you want consistency. You also need to stay flexible and flow with the trend if you want to ride the trend. The trick is to KNOW when the time is right to change.... Do not trust your Gut feel on this, make sure you are using some facts to make your move.... An example, if you are trading high priced stocks and the market for small priced stocks is the one moving, maybe you should be looking at the small guys. Now if you then check your results and see that they are not good then I would wonder what the heck you were waiting for.... Make sense??? Dave Evans