let me give an example say, i am backtesting RSI2 pullback method (a popular one) and it gave a good + PnL results in backtest just for example, during backtest, it gives symbols, MSFT,SBUK,ARNA,ACAD,ARIA during scan today, it gives symbols, ARUN,ABTL,BIOC,BLOX,CLNE it showed ++results for backtested symbols how can I trust the ++results RSI2 method on the backtested symbols now to trade these new symbols ARUN,ABTL,BIOC,BLOX,CLNE or we just test the method (RSI2) during backtest and not for those symbols ?
How much co-relation between the tested syms and those new syms? I would say there is no much value to use the tested results for those new syms.
oh ok. I have never checked if symbols are co-related, so are you saying they should be co-relation? between backtested and new symbols? and how do do i check if they are co-related, like same sector/ sector Industry ?
Well. not sure how much effective if the corelation is factor'ed in your analysis. I believe it is a good factor anyway to consider. It does not just make sense to me to use un-related syms to try to measure the behaviors of other syms. I also believe it is not enough to just use syms in the same sector/industry, etc to assume they are co-related. I think a quantitative method to measure co-relation between syms is better.
I was backtesting a set of 3 years and 1 year.. i test a set of 25 symbols at once but I have 20 sets like that in diff sectors
Why not expand your backtest with 10 or more years of data? I am afraid you will find it likely does not perform very well. In my research, I found it difficult to find an edge on smaller time frames below daily. Not saying there are no edges on smaller time frames, just that I came up empty handed. good luck! fan27