V.4:4 (155-156): The optimization of a trading program by Robert C. Pelletier
Product Description
The optimization of a trading program by Robert C. Pelletier
Many people have purchased software which gives the opportunity to test various parameter combinations to achieve the maximum profit results. For example, a system which may use three moving averages to determine market entry, market exit, and, perhaps, a stop parameter, might require the investigation of a range of moving average readings for each of the three moving averages.
Investigating all the combinations of three moving averages for a system where each moving average can take on 10 possibilities would require the computer to evaluate 1,000 possibilities (10 ´ 10 ´ 10). The user would then choose the combination of moving averages which produced the maximum profit and, perhaps, the minimum drawdown. He may then conclude that he has an optimum system which will work with a certain reliability.
Many people have purchased software which gives the opportunity to test various parameter combinations to achieve the maximum profit results. For example, a system which may use three moving averages to determine market entry, market exit, and, perhaps, a stop parameter, might require the investigation of a range of moving average readings for each of the three moving averages.
Investigating all the combinations of three moving averages for a system where each moving average can take on 10 possibilities would require the computer to evaluate 1,000 possibilities (10 ´ 10 ´ 10). The user would then choose the combination of moving averages which produced the maximum profit and, perhaps, the minimum drawdown. He may then conclude that he has an optimum system which will work with a certain reliability.
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