i looked into that system as well. i haven't really tried it, but if you say it is a good indicator, but bad system, how could you change it to make it a good system?
I am sure I coded it correctly. It took me a while until I refined the criteria for the pattterns enough. They now interpret things as accurately as you would visually. Admittedly I coded this system when the stockhits thread was in its infancy. While I had the full disclosure on the system I'm sure there are probably some refinements that have been posted that may be useful. For those of you interested in patterns you should really look at Boop's Bar Analysis System on Wealth Lab. This guy did a fairly robust analysis of some 3 bar patterns and chose those he felt performed better than random. After testing his system on a broad index of stocks with daily data I found the results to be unimpressive. I'm not sure what a lot of this means. Are the best known patterns all garbage? Does it depend when and where they are applied? Are there other larger factors we haven't recognized that effect the outcomes? Probably a bit of everything. I just found it interesting to find a tool that alerts me as to when a pattern that may be important to a large number of traders appears in the market. It may not be inherently meaningful but if it apparently meaningful to enough people at the same time than it may be useful.
I just went over the Traders Paradise with opmtrader and he has it coded differently then the one that we are looking at. He only has a small portion coded. This has probably changed and evolved since he did his coding for it. I think that we need to continue to work on this as I believe that we are moving in the right direction. Especially with the lagging entry similar to what I described in the beginning of page1 wdbaker
rcreal, What settings are you using for your test? I ran the system on each individual contract back to the March 2000 contract. I used 5 minute data and deducted a tick slippage and $3 in commissions from each side. It only made money on two contract periods (and a measly $3 average trade at that). My equity curves looked nothing like yours. I've always been amazed at how I can test something and get completely different results as someone else testing the same thing. Although I am guessing that you didn't deduct any costs in your test.
The system was tested on TS 6 data (@ES.D) from 2/11/2001 to last Friday (no commission or fees deducted). Again, this is just a baseline to start with. The code was contributed to a discussion thread at Tradestation World: https://www.tradestationworld.com/discussions/topic.asp?ARCHIVE=&whichpage=2&TOPIC_ID=501 I simply gave an example of a system someone suggested (beginning of thread) and improve it to where it could be improved to *possibly* be traded profitably. If you take $25/slippage & commission per r/t a ctx, you still get around $15k for the period shown. Not great, but it's better than most canned strategies in TS
I have had several people ask where to find it so here is the URL http://www.stockhits.com/site/id62.html I have no affiliation with this site, just like some of the concepts in this particular system and would hope that they can be programmed. Especially the lagging entry concept. wdbaker
Has any one used the the TICK as the entry signal and backtested using only reversals coming off of extremes, Maybe greater than 600?