Status Report After fooling around with the eASCTrend Deluxe+ system for a couple of weeks, watching their videos, reading their material and remembering how to work it, I developed a very simple but somewhat carefully crafted protocol to test its ability to trade stocks successfully. In summary, this is what I did with several mid-to-high-beta stocks' daily charts: 1. Followed Ablesys' advice in setting the parameters as best I could, per their many videos; 2. Backtested/optimized the system for 2 years starting from June 2003 to June 2005; 3. Kept the optimized parameters fixed and tested the system forward for all of August and half of September 2005; Repeated the process with 30 minute charts of those same stocks, but backtesting/optimizing for about 2 months (July and August 2005) and testing forward for 6 trading days into September 2005. In all cases, the system failed to deliver the strongly positive results that I was expecting for the forward-testing period. Another thing that has developed recently is that the system seems to occasionally freeze - without any visible problem with the eSignal data. Of course, this problem alone would make me think twice before I tried to use their AOE feature to trade automatically. Understandably, my current plan is not to start trading it unless I find a big hole in my thinking and results so far. Bummer! Oh well - live and learn!
Check out the eAscTrend discussion on wealth-lab a few years back. http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/topic?id=4877&start=0 Some details on how eAscTrend does its work. If you play with eAscTrend long enough, its simple enough to figure out what indicators it uses. A big problem with eAscTrend is the over optimization it uses. They describe it as a feature to get better results, when in fact it is cheating.
Repeated more or less similar experiment but focusing on the spring 2005 market for the forward test (optimizing 2 years back or 2 months back depending on whether I was looking at the daily or the 30-min charts.) In this way I was trying to alleviate any possibility that my previous poor results were due to the market being range bound at the end of the summer 2005. Unfortunately, the numbers came out very similar. Something is not working well with this trading tool. Oh well... again. Time to move on