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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Dave Shares who wrote (7882)	2/5/1999 7:23:00 AM
From: LastShadow	Read Replies (1) \| Respond to of 43080

Response The % winners target will depend largely on how far back you backtest and the mix of stocks you use. If you use tech stocks on last years data, then you will have average 800% ROI and 80% winners or better. The problem is that if you look at the last five years, you will see that those kinds of gains are going to be impossible to do again. My general rule of thumb has always been for a 400% Paper ROI going both long and short with 75% winners. Since I rarely short, you are looking at half that number, and the mix of stocks should be across energy, durable and non-durables, tech and internet stocks, communications and services. Understandably one is probably going to play the tech and internet stocks most of the time, but using only recent data will skew that potential gain unreasonably, and you want some cross-sector stocks to monitor movements in other areas. On the 75 Mutual funds, between 1/1/97 and 10/8/98 (22 months), gains going only long and out to money markets (not to bear funds) averaged 72% return with 84% winners Gong from just 10/8/98 (4 months)to today averaged 34% gain with 96% winners. The latter obviously cannot be sustained. lastshadow