Mags

So, how did you backtest it to see how it would perform over many trades?

Stop me if you'd rather not give details.

I trade a long term breakout system as well, not based on N day breakouts, but on volatility. You're not telling me anything I haven't heard already about trends. I'm not a day trader either.

What makes me think there may be a storm is that using your criteria in a backtest resulted in a negative return. A system has to have an edge, and a backtest helps see if one may exist. If it turns out a system doesn't have an edge and the trader happened to come in when the system was yielding a winning streak, it could fool the trader and ultimately see losses. The edge I'm talking about is not regarding the idea of riding winners, but about how the trends are determined, entered and exited.

If you say that the backtest becomes positive because you only take those trades that come from flat bases, I'm merely asking how you get a backtest to only count those trades taken from flat bases.

 
I simply cannot get into all the backtesting details and fine-tuning that I have learned, the hard way (as most of us have), over the last 7 years, in one post.

Simply put, I eyeball chart patterns and look for good group strength, amongst other things

good luck
 
Quote from billpritjr:

I simply cannot get into all the backtesting details and fine-tuning that I have learned, the hard way (as most of us have), over the last 7 years, in one post.

Simply put, I eyeball chart patterns and look for good group strength, amongst other things

good luck
More...


Bill,

Thanks for sharing this simple method - you have given me some ideas to refine for my IRA's. Although I try to "pay the rent" with daytrading and have no other job, you have shown that it is possible to make low maintenance trades without spending all day. I need that in order to grow my savings without diluting my singleness of purpose intraday.

Amazing to me is how many people want to yammer negatively at you about "backtesting" etc. when you're making such a nice winner - the profits from that trade alone can support 20 to 100 trades with stop losses (if need be) until your next big hit.

Regards,

Paul
 
Paul, what you call "yammering" is my simply asking for some details about parameters bill uses for backtesting against flat bases. I currently have some ideas I scan for that also work with flat bases, and I was curious as to how bill handles it.

bill, thanks for what you've shared so far.
 
Quote from gms:

Paul, what you call "yammering" is my simply asking for some details about parameters bill uses for backtesting against flat bases. I currently have some ideas I scan for that also work with flat bases, and I was curious as to how bill handles it.

bill, thanks for what you've shared so far.
More...



My bad if I misinterpreted the tone of the post(s) - sorry. Just noticed that many people seem very critical of success.
 
Quote from billpritjr:

nice post

Have you looked at a 10-day EMA as a "trailing stop" point?

just curious
More...

I have not, although it sounds like a decent way to exit.
Like a trendline, a necessary (but not sufficient) condition for a sustained decline is a violation of a shorter EMA.

By the way, if I have a chance to draw a steeper trendline, I will.

I have found trendlines to be great exits, for both longs and shorts.
 
Quote from billpritjr:

I simply cannot get into all the backtesting details and fine-tuning that I have learned, the hard way (as most of us have), over the last 7 years, in one post.

Simply put, I eyeball chart patterns and look for good group strength, amongst other things

good luck
More...

I think Bill's point is, you should not expect to find a "system", where you do the same thing every time; you've got to make judgement calls both on entry and immediately after. There is no better example of this then what went down with NPP's first journal on S&P daytrading here on ET. People tried to computerize it; when they backtested it, it lost money. However noone could have the computer generate the entries he actually took.
 
Bill's riding a freakin' bubble. He had 2 things to have that sucess:
1) Balls;
2) Luck.

Don't try to make it a system. If you want to backtest it, check what happened in 2000-2002, that's all the backtesting you need.

It's a bubble, a pyramid, the musical chairs, etc, etc. I mean, look at the performance on those stocks, do you think that is normal stock market behaviour? Get a clue.
 
.....what is 2*ATR?

I understand it is a moving indicator that bill is using to derive his trailing stop point. But I have no idea what ATR stands for or why he would be using a multiple of 2.

Thanx to anyone who can clarify.

My second question for Bill is since you are influenced by turtle trend following methods, I assume that your initial stop is tight and then widens as your open profit increases. So my question is how did you set your original stop level after your buy stop was executed?
 
gonna keep this short and sweet and not respond (to much) to the naysayers, and the "bubble" guy, but thanks for talking abot the size of my balls :)

ATR is Average True Range

most people who are thoroughly studied in Techinical Analysis have a grasp of what ATR is

as far as the other comments, turn to the following pages for a discussion of "chart reading" and "base breakouts"

Van Tharp, How to Trade your Way to Financial Freedom

p. 207, bottom of page, discussion of "visual entry", Seykota

p.208, middle, discussion of client who makes millions using "visual entry"

O'Neil, How to Make Money in Stocks

p. 133, flat base discussion

Trader Vic, all of Ch.5 "True Understanding of Trends"

Perry Kaufman, Trading Systems and Methods, p.545-546, comparison of popular trading sytems with conclusion that "Channel Breakout [aka N-day b.o.], MII Price Channel, and Dual Moving Ave crossover" were most profitable systems based on thorough backtesting

----> "breakout systems" and Dual MA systems were pioneered by same person, Richard Donchian

Remin. of Stock Operator....entire book

You guys DO own the above book right? Or is your bookshelf lined with "Day Trade tactics" / "SOES Secrets" / "You can be a Supertrader" / other crap

good luck

my stock picking is based on intuition, chart reading, past experience learned the hard way ($$$), and study study study

how many of you day traders ever heard of Donchian? The guy who asked about ATR says in his profile he is a "Equity Trader"

How can you tell people you are an "Equity Trader" and not know what the hell ATR is? You gotta be joking. I mean, you WERE joking, right.....? Thats like me telling people I am an scuba diver but on the scuba diver forum I ask everyone what "O-2" means.


 
You must log in or register to reply here.
Back
Top