tech/a
No Ordinary Duck
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TjamesX said:OK,
I'm going to pursue what you mentioned about TT entry signals not being much above random entry in improving performance.
Not just t/T entry --any entry into any trade.
Have you actually quantified how much of a difference there is between
a) Random entry and TT exit/stop loss.........and
b) TT Entry and TT exit/stop loss
Yes.
Can you post comparitive results of a Monte Carlo sim of say 5000 portfolios using each method with the same trading period as before?
Yes my software can do this but the point is?
I'm still trying to work out exactly where the difference between 18.20% and 7.14% comes from, and I would like to know exactly how much TT entry has a part in this (every % point counts!).
TJ
Your current belief is that entry MUST be the key.The ORDS is just a record of those stocks trading within it over a period of time.Some out perform and others underperform--but on a whole over the period you mention then growth was 7%. However growth in the systems portfolio of 10 stocks was 18%.Simply those in the portfolio were skewed as growth winners.At the time of entering there was no way that this could have been known---just as Im sure other stocks didnt even come into consideration and could have outperformed the stocks held by the portfolio---purely because we didnt even get a chance to purchase because they never filled our purchase criteria.
If most of the difference can be attributed to the stop loss and 180 EMA - wow, for me thats pretty significant...
Some of it yes---all of it no. Most of it arguable.
Why is it significant for me? Because;
My original thoughts were that I could possibly apply some of my portfolio to using the TT method, while my normal mostly fundamental part technical analysis would be used for my other half..... and see what happens. But I think there are significant ways I think the two could be intermixed.....
Sure they could---others have adopted hybrids of the method---However you MUST understand what makes a method profitable.
1) Normally a decision on entry for me would be a combination of economic/cyclical/industry conditions as well as some fundamentals on the particular company, maybe a little TA - but rarely. With TT entry signals there is no reason why i couldn't overly my analysis on top to chose/rate which if any to enter. This is because economic/cyclical/industry conditions change very slowly and would not be hard to apply, and there are certain fundamental analysis techniques that can be applied across the board to rate companies very quickly on their financial position. One of these methods has been used very successfully discussed and applied on another forum - will discuss further down the track......
I'd go fundamental for portfolio selection if you wish and technical---T/T's technicals for timing and trade management.
2) Depending on how much difference tech's results come back between random entry and TT entry - there seems to be no reason why I couldn't apply my normal fundamental analysis on entry (ie no TT entry), but then apply TT exit/stop loss criteria once I have entered. The reason is becuase I have always struggled when to exit stocks to maximise my returns.
Ah--not so simple.While random entry into a trade may not have a longterm difference the entry is designed to alert those stocks "in the Position" to out perform--- where as random just selects any stock downtrend or not.
The question of whether any value can be added through my own methods 1 & 2 is obviously a big fat ???? and there is really little way of back testing easily any fundamental entry...........
I'd go fundamental for portfolio selection if you wish and technical---T/T's technicals for timing and trade management.This would be in my view the best way to go.It would however be a different universe than the one we have tested.This in itself isnt a big issue---from the myrid of tests on many many stock universes.
so it continues
Fun though
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