NetTecture
Registered: Mar 2009
Posts: 1018 |
05-29-12 04:54 PM
Let me add one as a professional developer. TEST YOUR EDGE CASES. I was in a discussion some weeks about with someone who had a system that in the core was a stochastics based reversal system. He had some bad trades in a row and wondered that "Stochastics do not work". Well, lets get this straight - if the market moves long, storahcstics "draws out" (close to upper limit) and the SMALLEST reverse movement triggers it to drop. This is a known mathematical issue with that approach - and one that people should be aware of. Looking at the chart in this example, would could hardly see the price going down - more like "going sideways / slightly up". I am not advocating Stochastics here - I use it as example. You MUST check the behavior of whatever you use in various extreme situations. And your code MUST handle that. Some of the indicator formulas have quite extreme edge cases, mathematically.
|
