(False) Breakout & Trend Reversal Strategies??

Discussion in 'Strategy Building' started by olimits7, Jun 24, 2005.

  1. MAD10

    MAD10

    I think the move is over and about to reverse; so I close my position. Instead the move continues in the same direction it went, and sometimes continues to another breakout line.

    So, what's the problem?
    There is no way of knowing for sure which way a BO will turn out (regardless of what many will certainly claim). The good new is - you don't really need to know that. Just backtest comfortably, allow for some uncertainty, then go with the numbers and stick with them.
    Beware of throwing in more "indicators" to increase your success ratio (or PnL). Instead, find another simple set up that backtests at your comfort level... and as usual "If it is too good to be true.... it probably WAS".
     
    #11     Jun 27, 2005