i'm curious, how did you come to this conclusion..(no stops/pt's) and, if hypothetically, you had a system that did produce a positive result w/o stops/pt's, would you then insert these signals? thanks,
Eddie, the speed ratio is the ratio of the settings of the two EneMAs, par exemple, 100:25, which specific rat-io will do you no good at all intraday. But I am not joking. EMAs work because The Street's algorithmicists are too dumb to handle anything more complicated. For years I have tried to popularize the adaptive Kalman filter, to no avail, because they can't understand it. It's engineering, as opposed to pure math, haha! What do we sparkies know?
BubbaBig, that is a great question. The porblem with uptimization is that it leads to breathtaking stops, like many points. Every system I ever tested gave lousy results with rational stops (I use 3 ticks for NQ, and am thrilled to escape with four). So I have a theory. If I have to optimize it, it doesn't really work. The corollary is the following. The more you complicate a good idea, the more random and unreliable the test result is. Mind you, nothing I use now is even remotely testable. I learned that scam from Jack. And no, I wouldn't trade anything so simple that I could test it. That takes all the excitement out of trading.
MangleBread, I would not tarnish the memory of the great and late lamented Bruce Babcock Jr. by writing a book on backtesting. His could never be improved. But I do appreciate that you get it that backtesting is funny.
LOL, it wouldn't be a book on backtesting. It would be a poetic treatise on the insanity of the markets ... I'm sure it would sell quite well.
Definitely Hunter ... are you kidding me, Long-Term Capital Managment, Victor Niederhoffer, Sub-Prime Mortgages, the list goes on and on.
I haven't proved or disproved to you that you should buy an up close. Should you? You don't fucking KNOW, do you? But let's suppose that I did, and that you liked "Buy Monday". Thus begins madness. You think, if I should buy Mondays, and an upclose, how much more would I make if I only bought upcloses on Monday? See the attached. A lesser intellect than mine would optimize this, hahaha!
Breadmangler, one could hardly outdo Mackay or Kindleberger, but then again, they never met Jack Hershey.