I would like to read more about such tests... I don't know this "T" you guys are talking about.. Also if there is any published material on the subject, please point some out. Thanks!
You'd think this was an easy question. My live trading is not as positive as I would like. I'll have more consecutive losses than what my back testing showed, winners are not as nearly as large. So I'm on a constant search to find out why. Is my line strategy flawed? if so where? Is another approach better? At what point am I correct, verse when am I proven wrong? Should my initial stop loss be put at the place where my trade diminishes the likelihood of being profitable? or at the drop dead, ain't going to work out place?( more distant from entry) Ect... The sim trading is my searching ground.
A test is a search for trading volume. This is most often found at S/R of one sort or another since those are the levels most closely watched. T is Teresa Lo. As for published material, practically any book that isn't about indicators will address tests of support and resistance, price and volume relationships, etc.
Teresa Lo She has a web site at trendvue.com But I cannot get it to work just now. I have some misc. stuff from her saved on my computer, I'll see if I can find it. edit: db beat me to it.
Hope you're keeping detailed records. Perhaps you could back off from detail and look for principles, three or four that can guide you when you're trying to evaluate a potential trading opportunity. T makes a distinction between strategy and tactics. Work out your basic strategy, then deal with the specific tactics later.
I think the weakest link in my strategy is volume analysis at entry or exit levels. ( Any level for that matter ) "Tape reading and market tactics" H.B.N., is giving me some ideas on what to look for at turning points. "Charting the stock market" the Wyckoff method, is another reference. I've had these books for a long time, and gave them a number of reading's each, but some how volume has never really clicked for me. So, I'm on to learning more about supply/demand.
Three areas of study, relating to volume From "Tape reading and market tactics" - Humphrey B. Neill General Principles. 1st. Increasing volume "during" an advance,with intervening pauses or set backs occurring on light volume. This is indicative of the underlying demand's being greater than the supply, and favors a resumption of the advance. 2nd. Increased volume at the "top" of a rally,or of an advance, lasting for some time, with no appreciable gain in prices - an active churning of stock transactions without progress. This is indicative of a turning point. 3rd. A "tired" or struggling, advance, when stocks creep upward on light volume and "die" at the top. This indicates a lack of demand ( few buying - orders) ;and, whereas selling - orders likewise are light, this action frequently marks a "rounding - over" turn, which may be followed by increased volume on the down side ( when the sellers see that they cannot hope for much higher prices at the time). These struggling trends are subject to sudden reversals, particularly when they have endured for several days. These types of action are present, but reversed in sequence in declining markets.
Techniques of Tape Reading is good, as are the books sulong mentioned. All of them are available from the library.