As asiaprop indicated, the key to a good rotational trading system is a good method of ranking the securities in your trading basket, so that you are trading only the top 3 or top 5 or whatever number suits you. The ranks are continually changing ("rotating"), so securities are continually joining or leaving the top ranks and you are entering or exiting their trades accordingly. Finding a good ranking method is no walk in the park but if you can do it, I think rotational trading is one of the most powerful and most underrated trading methods there is. Amibroker has a built-in rotational trading set-up, excluding the user-defined ranking method of course.
As asiaprop indicated, the key to a good rotational trading system is a good method of ranking the securities in your trading basket, so that you are trading only the top 3 or top 5 or whatever number suits you. The ranks are continually changing ("rotating"), so securities are continually joining or leaving the top ranks and you are entering or exiting their trades accordingly. Finding a good ranking method is no walk in the park but if you can do it, I think rotational trading is one of the most powerful and most underrated trading methods there is. Amibroker has a built-in rotational trading set-up, excluding the user-defined ranking method of course. [/QUOTE] Jack Hershey taught this, and Sydertrader executed it, many years ago.
U are being a funny man, I hope. All one must do is write code that allows one the see the fractal nature of markets. Then develop a risk reward profile they are comfortable with.
Jack Hershey taught this, and Sydertrader executed it, many years ago. [/QUOTE]News to me. Did they disclose the ranking method? [/QUOTE] Yes they did, a set of metrics for picking a stock universe. http://www.elitetrader.com/vb/showthread.php?s=&threadid=38777
Oh no, that would make all these PhDs and Princeton grads and nuclear physicists not needed in trading firms.
I often wonder what all that hard-science talent has to do with finance myself. Anyway earlier you said that if trend following worked, then simple moving averages would work. The reason why SMAs don't always work is lag. Lag means late signals, which means late getting in and late getting out, which means missing a large part of the trend and giving back a lot of the gains upon trend reversal. Trend following works, you just need better tools than SMAs and other stuff from the 19th century.
Correct, C A N S L I M is it's inpiration, but there is more precision for entries and exits. I watched Spyder, in real time, double his account.
Most trader do not know how to use MA's. Averages were never meant to be traded. Price interaction with those averages is what a professional looks at. Moving average on the price charts along with a properly calibrated MACD can pick tops and bottoms, actually. Here is where risk comes in. If you system has ID'd a bottom, how much will you bet?