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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Lachesis Atropos who wrote (17055)	7/12/1998 5:34:00 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68461

Lachesis, A good clean data source is difficult to find. I get mistakes from time to time too in my Telechart 2000 data. I usually have to adjust the data manually. Luckily I only track 50 stocks plus a few indices closely so I can usually catch the mistake as I get end of day numbers emailed to me from the infobeat.com site. >>It appears that my trading (haven't lost in the >>last 3 months, 39 trades) was due to a >>run of luck rather than systematic trading--Of >>coarse I though it was due to a >>superior system. Though the money I made >>was not significant:( Most mechanical systems will have losing trades 50 percent of the time. I have read that a number of times in various articles and Tom Trader has said the same about his system. I have not had the chance to back test that for myself though. The key is that your entry and exit strategies must limit the risk so that you let your winners run and exit your losers promptly. In a good system the amount of money gained should offset your losses on average. It sure makes it tough to stick with the system when you do a series of losing trades though. I think stability in different market environments is hardest thing to achieve in a system as most systems will have winning streak at some point. . The last two issues (June and July) of the magazine Technical Analysis for Stocks and Commodities has a two part article on how to design a system. It goes into testing methods and concepts you already know. but it has one or two more macro concepts such as July being statistical an up month and September a down month and the effect of the Presidential Election Cycle and the effect of 30 year bond rates. The article does not have a lot of details on an actual system, but you already know a lot of that. It might be worth looking at in order to encorporate the macro concepts into your system. It might help you achieve greater stability in your system over the course of a longer period of time for your back test. Harry