V.18:2 (44-53):Forcing Optimization by Vincenzo Sciarretta

V.18:2 (44-53):Forcing Optimization by Vincenzo Sciarretta
Item# \V18\C02\013FOR.PDF
$3.95
Availability: In Stock

Product Description

Forcing Optimization

by Vincenzo Sciarretta

Sooner or later, most system-oriented traders backtest a mechanical system and get a positive result - and then have it perform poorly in real-life situations. What gives?

Sooner or later, most system-oriented traders experience this dismaying conundrum: They formulate a mechanical system, backtest it over a convenient period, and get a very positive result. They watch the equity line and see it rise in an almost straight line with small but acceptable drawdowns. With a methodology called forcing optimization.

As an example of contrary results, I used a mechanical system from Martin Pringís excellent Technical Analysis Explained. The system presented by Pring was devised for the dollar/sterling on a weekly basis, but thatís not the way Iíll be using it here. This mechanical system combines a moving average and two rates of change,a short one and a long one. Here are the system rules in general terms: Things look downright rosy.But then they start trading the market and, despite the positive backtesting,proceed to lose money with the system!Why this occurs with dismal and predictable regularity is too expansive a subject to get into here;I will deal with it at another time. But we can discuss how to limit this sad but all-too-common occurrence,




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order