Australian (ASX) Stock Market Forum

Walk forward optimisation of the periods

My research and experience suggests that not every issue available for trading can be safely and profitably traded. I think there are several criteria that must all be met:
1. The issue itself must be volatile enough to provide profit potential, but not so volatile that intra-trade drawdowns are excessive.
2. There must be a signal component to the data that can be identified by some model. That is, some model must be able to give reliable buy and sell signals.
3. The resulting trades must have a risk profile that is acceptable when compared with the trader's personal risk tolerance.
4. The reward must be worth the risk.

Thanks very much Howard.

It might be number 1/2 making it tricky. These stocks shoot off in bursts (100's of % in days/weeks) with reasonable volume then suddenly the volume dries up completely or the spread widens too far.
 
These stocks shoot off in bursts (100's of % in days/weeks) with reasonable volume then suddenly the volume dries up completely or the spread widens too far.
Aren't they news or rumour orientated moves? Look at the frequency of stocks moving up when an announcement is near but not expected. Friggin unreal.
 
What does 'near but unexpected' mean?
An announcement is near (within days) but the company has not indicated to the market any announcement is due (unexpected).Price rises for no apparent reason which attracts buyers sniffing something is going on.
 
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