Registered: Apr 2002
10-15-02 01:25 AM
I suppose you could put in some filters and such.
I got some PM from people that were having trouble finding anything to trade, so I decided to post this simple system. Sometimes it's easier to modify something than to find a starting point.
FWIW, I tried a filter of only taking the trades in the same direction of a longer term trend (40 bars moving ave. had to be higher than 16 bar moving ave. to go long, etc.). It improved the profit factor, but hurt the overall profitability. The problem with all trend following systems is when you become selective, you often miss some of the big moves.
My analysis of why this method works is that the distribution of trades is not normal. Experienced traders know the markets have fatter tails than a normal distribution. This simple system catches the big tail moves, while breaking even on all the chop slop.