Quote from Trader666:
Then why doesn't your paper (attached) about the "p, v relation" make any mention of a specific stock "universe?"
After I backtested it and you didn't like the results you tried to claim, after-the-fact, it should have been tested on a specific "universe."
Why should something that broad not be a general concept that applies to all stocks?
We all empathize with your difficulties.
For anyone who wants to print the paper, please do so and reason how to use it to your best advantage. Think of the value a relation of Price and Volume has for stepping off into the greater picture. All tools work best when they are applied to the best opportunities. As Mike syas choosing the universe is very important.
Trader666 take Mike's advice and go to the abundant resourses that are available for choosing the Universe that goes with the paper. Use the IBD data to select quality stocks to apply the paper to.
Your back test showed no statisitical significance. That has been explained to you. If a person uses a technique on a large sample he finds out how segments of the large sample perform. You chose a sample of the 1000 stocks of the S&P 500. Most people would smile upon seeing the sample description as applied to the years 2002 to 2005. At any rate, it is a good idea to use the contents of the paper to define the way the backtest would have been done by someone who wanted to backtest a sample.
You used spydertrader's coding to do the test, you say. Just to further empathize with you and your difficulty in getting any testing results (something statistically significant)I recommend using the other half of spyder's coding. You used his entry coding and you did not use his exit coding.
If a person uses the coding for entry and for exit, then he finds out how long the "hold" is to complete a backtesting cycle. The answe is 8.1 days using 400,000 trials.
You used the same hold for all entries. The hold was a "timeout" exit. In the paper the time to exit is symmetric with the entry: both are score changes and they are specifically cited: 0 to 7 for entry and 4 to 3 for exit. The scoring cycle repeats. This does not mean that there are equal days for each score. What is means, though, is that P,V ,A/D cycles and scores occur in a particular order and sometimes the score backs up occassionally before resuming its rotation.
I have given you several aids to help you recover from your problems. A one pager on Unusual Volume, references to completed days of trading using the one pager based on the paper and years and years of posting of people using the method and posting their results over years.
All stocks cycle. The range of cycle frequency is astounding. As compnies grow their cycling characterisitcs change. For people who trade, they use different criteria than those who invest. Trading 100 cycles per year is different than doing buy and hold. To use scoring on any stock it is best to select the cycle fractal of the stock and score it on that fractal.
You chose to trade large cap stocks on a five day cycle. Your backtest proved that large caps stock to not have a statisitically significant price change over 5 days. These results are well known and well posted by you by now. For the sake of N00bies, were I you I would post these results periodically so that they can understand that trading large caps in position trading according to your backtest will not make or lose any significant money. Look at how many years you have waited to learn to make money position trading stocks.
Certainly, you represent the majority of traders.
