StockFetcher Forums · General Discussion · The 5% Club<< 1 2 >>Post Follow-up
265 posts
msg #85365
Ignore trendscanner
12/31/2009 8:29:59 PM

This may sound strange but I've created filters that hugely underperform the market (lose big money) regardless of whether I backtest them as short or long filters. So you can't simply assume that a filter that loses money when backtested on the long side will necessarily make money on the short side or vice versa.

That said, almost any filter can make money on some stocks some of the time - momentum filters make money on stocks where momentum keeps going but lose money on stocks that reverse; vice versa for reversal filters. It's impossible to tell just from looking at filter results which stocks are going to behave as you expect them to with 100% accuracy.

I think the biggest differentiator for the 5% who survive as traders is their money management discipline, rather than the filters they use. A trader can make be successful even if more than 50% of their trades are losers as long as they implement a strict stop loss policy.

Best wishes to all for a healthy and prosperous 2010.

818 posts
msg #85372
Ignore miketranz
1/1/2010 11:40:29 AM

I'm a firm believer in money management.Filters,charts,back testing are only tools that print past history,with hopes of predicting the future.No one knows what direction the markets are headed.However,the best trade set ups I've found,are fading popular beliefs,even going against everything you ever learned about trading.One example is how non-sustainable price moves,always set up moves in the opposite direction.Greed always turns into fear & the opposite is true.If you want to become a successful trader,rewire your beliefs,trade what works for you,through your own experiences in the market........

9 posts
msg #85544
Ignore sboren
1/4/2010 10:59:38 PM

I've seen massive returns on short backtests. Beware! Make sure you are filtering stocks that can be short sold. My backtest numbers were nice but not in reality due to the inability to short the stocks in the filter.

StockFetcher Forums · General Discussion · The 5% Club<< 1 2 >>Post Follow-up

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