Genetic System Search for Technical Analysis™
Archive for October 2009
It’s important to construct a set of investment rules that generate signals in which you are confident. Imagine that you’re using a system in live trading and the last five trades have been losers. Your trading capital is depleted and your confidence shaken. Are you going to make the next trade without question?
Consider the case of a huge drawdown during an open trade. Your profit has turned into… Continue reading
If you use the MetaStock Enhanced System Tester (EST) in the development of your trading system, it is important to verify the results. Some configurations, for instance, may result in simulated trades that you would never execute. The EST may both buy and sell a stock at the same time. That results in two additional brokerage fees with no possibility of profit.
The pitfalls in the use of the… Continue reading
Often a set of investment rules will generate conflicting signals. For instance, it might call for an Enter Long trade on the same bar as an Enter Short trade. What is to be done in those cases? The governing directives are often called the Order of Execution.
The Genetic System Search for Technical Analysis program, Equis MetaStock and others use the following rules to resolve any signal conflicts… Continue reading