I've come up with a strategy in metastock that seems too good to be true. It produces 89% winning trades, with a trade only being considered winning if it gains 3%. The average hold time is 2 days. I backtested over 4 years on the 100 highest volume stocks over $25 a share. I used a one day delay, so there is no questioning if I could really get the prices I did. It just buys at the open and sells at 3%. Am I missing something huge here? I have never heard of a system this succesful. I am trading on it today, starting very small to see if it works. Naturally I won't be sharing the system, so I guess you guys can't provide too much insight. Has anyone else come up with something this accurate, and if so, why didn't it work?
My Metastock strategy
- Thread starter baggerlord
- Start date
And I guess you are putting hard earned money on the line based upon a "Backtest"? I would not put real money on such a test as most systems of this sort are simply curve fitted to the data. Test it forward for several months on "Paper". Then if it looks good, try some real money.
Good luck.
Good luck.
Yes...many before you have announced great results via whatever mechanical systems they were testing.
Use EliteTraders search menu in the upper right corner to search for past message posts like yours.
You can always private message those traders once you find them.
Also...I suspect they won't reveal anything to you as you wont to them (the makings of short message exchanges)...
and they probably won't say if it worked or failed after they started putting real money on the line.
Good luck and if you discover something that does produce good results with real money...
you won't have to work for anybody else again.
NihabaAshi
I didn't do any optimization, and my backtest has produced thousands of trades.(100+ for many of the stocks in 4 years.) I am putting my money on the line, starting earlier today. Not much money of course, just enough to see if it works. I'll keep you guys posted, even if I fail miserablly.
I forgot to say it treats every stock exactly the same. No curve fitting what so ever. Just for fun a minute ago I reduced my profit target to 1%. Resulted in 95% winning trades with average hold time of less than a day. 
I know, I know, I am probably an idiot.
I know, I know, I am probably an idiot. Having tested hundreds of systems, I've seen systems such as yours... Let me ask you questions that may lead you to your own discovery of the system's soundness: How big are your losses? Are you using stops? And finally, are you holding losers a *lot* longer than winners?
Good luck and let us know!
Good luck and let us know!
My losses run around 5%. My system only trades in the direction of the long-term trend so there is normally plenty of time to get out with a very small loss. I haven't bothered to automate my exit strategy, but my trades are swing trades and if the swing doesn't happen I drop the stock. I would say loser holding time runs around 15 days. My longest succesful trades are around this time period so if it doesn't happen by then I sell.