What should I do with my model?

Discussion in 'Strategy Building' started by galilean, Apr 24, 2008.

  1. galilean


    I have spent a lot of time in the past few years on studying the stock market. I recently developed a model which seems to be quite promising. My model is for trading stocks (long only, no short, but it might the next step). Back testing has been done based on daily close price starting from year 2000, and the average annualized return is about 40% to 50%, see attached graph for reference.

    What should I do with this model? Can I try to sell it to a trading company? Are they interested in this kind of model at all? Anybody interested in this model?
  2. jsmith


    Trade it yourself and make lots of money.
  3. imagine I was buying / leasing your model or just plain thinking of getting your signals and reverse engineering it, cause I CAN

    but all that aside

    first question I would ask you is

    why is your model dead from 2000 to 2003

    can you show me the chart from 1998 to 2000

    it looks good but a little weird at the same time
  4. galilean


    The problem is that I don't have enough capital to start with. From my study, I need at least $200K to get it started. I also don't have time for that.
  5. It's not that great.

    Go back to the drawing board. :eek:
  6. hmm..... 200 k to start is not un-doable,

    but considering I started with 10 k, I am forced to wonder

    by telling me that you need 200 k

    you basically told me that your model plays huge number of stocks per day, which means you require level of automation

    not that any of that is "un-doable" but you might want to try and simplify

    for example I can tell, that your model tries to predict, not react,

    that's fine, but there are many ways to skin the cat
  7. galilean


    My model is based on two modified MACD signals which trigger both buy and sell signals. So, depending on the market condition, it may behave weird. This is my hobby project. It is not an easy job to get the clean historical data. It took me long time to verify the data back to 2000 - this is the first step before my backtesting. So, I don't have data earlier than 2000. However, it is my believe that the market from 2000 to date has gone ups and downs many times, if the model can survive so long, it should be okay.
  8. galilean


    Acutally, it only does 5 to 10 trades a day. Ideally, those trades should be done a few minutes before market close because my model is based on the daily close prices. You only hold up to 7 stocks. I created a software for it. It can download the latest quote, do some analysis and displays which stocks triggered buy or sell signals. It could even link to your trading account to place the orders if you want. By the way, in my backtesting, I only consider stocks greater than $5.00 and average volume > 500K.
  9. I do 100% in 2-3 months despite that being impossible by the great minds of ET

    so I am not interested but

    I commend you for this project, you remind me of my past,

    I did what you did, but later moved to futures and trading SINGLE chart

    perhaps something you should look into

    and you won't need 200 k grasshopper :)
  10. galilean


    Thanks for the tip. The reason for me to develop this model is that I want to overcome my emotion and reduce all the stress. I did some paper trading and compared with this model. After 3 months, my model won, despite all the time and stress I put in. I'm sure some people can do better than this, but I can't. I know it's my greediness which made me lose.
    #10     Apr 25, 2008