To: ftth who wrote (7 ) 1/27/1998 12:27:00 AM From: HeyRainier Read Replies (1) | Respond to of 237
[ Indicator Reliability ] "...When BOTH of these are simultaneously below their signal lines by some amount, Exit...stage left!" Hi Dave, I was wondering if you were able to backtest a trading system that incorporated the combination of CPBI and CRPV for a variety of issues, large, mid, and small cap, and if so, how the results were. I was also wondering if there were some way in which a "Reliability Indicator" could be created to assess the reliability of various signals (i.e. stochastics crossovers). This concept is probably the physics-equivalent of hyperspace, but I'm just rolling around some ideas for now. "...different indicators with different settings would be used for each case, driven by the types of indicators that the stock's characteristics best conform to. Cycles, trends, volatility, momentum and support/resistance must all be considered." It appears that with what you've outlined, we are moving in the same direction; I am also coming to the conclusion that a blind application of technical indicators without taking into consideration other previous price factors is ineffective. I believe it is with this thinking that my "Reliability Indicator" question was formulated. If we got that down, we'd have the Ultimate Indicator, don't you think? But I believe the success of such an indicator would (rightfully) cause others to keep the information for themselves. Anyways, on a different note, I've personally found that many of the more refined TA techniques' effectiveness gets reduced as the capitalization of the issue gets smaller and smaller. Only the most fundamental of TA concepts (i.e. trend, support/resistance) are generally applicable. Is this your observation as well? Also, I did receive your email; thank you. I have been keeping the attachment in my email folder until I can take the time to decipher the concepts you mentioned about in the email. I will write again when more time becomes available. With me being in book overload mode as you are, plus the continuing career search and part time jobs...well, you get the picture. I'll write when I have the time. Regards, Rainier PS. I'm ecstatic about that book, Business Strategy and Security Analysis . Thanks for pointing it out to me. I got it about 3 days ago from Amazon.com. Cheap prices! I'm a fan now of that overvalued company...lol.