I'm not recommending it (since I've never taken the course) but testing chart patterns and the like is the specialty of Chris Manning www.manningtrading.com I went to his free 2 1/2 hour seminar - it was OK, but thought the cost of his 3 day was a bit high.
Is that him throwing a dart on the webpage? <img src="http://www.manningtrading.com/gifs/splash1a.jpg"width=300 height=150></img> "Ok, you've paid your money, now here's all you do...." /parody
and here he showing off his Temptations moves... <img src="http://www.manningtrading.com/gifs/people.gif"></img>
i wonder what your p&L would have been if you took each and every crossover on that chart, with stops wide enough to keep you in the big moves. also, my little jokes were just that -- i have no opinion of this guys work at all.
If some TS guy can optimize on RSI indicator and post winning/losing % please do. My favorite is 5m MACD diverg signal(didn't see one today) and some basic flag, wedge, H&S pattern.
You provide the rules, and we'll see - at a minimum, you'd need: 1. Entry condition(s) - must be specific: lookback period (or range) for RSI, specific levels (crossover?, if so at what level?), any additional filter (e.g., time of day exclusions). 2. Exit condition(s) 3. Data Resolution (time frame) 4. Tradable(s) Frequently, when system-testing, you'll just take the simplest conditions (no special filters), a very basic profit-taking method (trailing stop, profit target, etc.) and a simple stop-loss, just to get a basic idea of what you're working with. In order to avoid curve-fitting, some system-traders will refuse to do any optimizing of indicator parameters at all, though others consider that an overly radical position. I'm always open to looking at stuff, but I gave up on the whole system-trading idea, especially for day-trading. I have yet to see a computer program or system that come close to handling all of the varied "fuzzy" considerations that an experienced trader takes into account, often by reflex. Nor, on the subject of this thread, have I seen a study of chart patterns and other trading tools that comes close to addressing how a good trader REALLY uses them. The TASC article on head-and-shoulders patterns, mentioned earlier, was typical of how useless such efforts can be, but I don't want to go into the numerous methodological problems with the specific article. I'll just offer my opinion: The question isn't whether the appearance of, e.g., an h&s pattern, as defined by the tester, turns out to tend to predict a certain kind of price movement in tradables across a large sample of identified instances, and according to some simplistic measurement. The question is whether or not the pattern, used intelligently, in conjunction with other indications and filters and good trading techniques, can be traded profitably. Getting a meaningful answer to this question is a much more complex project than researchers ever seem to acknowledge.