System Development Setback

[Rob_ee]

Being new to the market I wonder just how accurate a picture you would get from back-testing seeing that most have made good money in the BULL market over the past years.

Even the most incompetent amateur would have a good chance of making a great deal of $$ on just about anything.

So seeing that an oscilating stot, a converging MACD , crossing MA or any of the other myriad favourite indicators out there would have given good entry points over the past years how would they relate to todays market ??



Rob

 

[tech/a]

Being new to the market I wonder just how accurate a picture you would get from back-testing seeing that most have made good money in the BULL market over the past years.

Even the most incompetent amateur would have a good chance of making a great deal of $$ on just about anything.

So seeing that an oscilating stot, a converging MACD , crossing MA or any of the other myriad favourite indicators out there would have given good entry points over the past years how would they relate to todays market ??



Rob

Rob.
In isolation there would be few who havent had a few profitable trades.
But I think you'd be suprised how few actually out perform the market year in year out --- regardless of overall market conditions.

A few points.

(1) Shorter term methods are not really effected by longer term market fluctuations so if this is a concern then perhaps your design should concerntrate on shorter term.

(2) With the advent of CFD trading developing a methodology which also en compasses the short side easier and in un certain times a balance of portfolio maybe wise---even a bias toward the short side when clearly bearish.

(3) I have written much on the importance of your system "Blueprint" and how to use it when traking your system--this is the key to determining if your system is trading outside market conditions used during developement.

(4) You could also trade your equity curve "Stevo" does to the extent that if his equity curve is taking a dive he wont take a new open position until it turns up again.

In all of the above dont forget that Tax is at full rate for trades which are held for less than 12 mths.
Cost me $30,000 last year when I closed a portfolio while I went on holidays only to notice some open trades were 10 mths old and I got hit 25% more in tax than I would have if Id held!!---Dohh

 

[CanOz]

(4) You could also trade your equity curve "Stevo" does to the extent that if his equity curve is taking a dive he wont take a new open position until it turns up again.

This is what is referred to as the 'system stop' Tech, correct?