Systems exposed

[affoxBABisona]

.of 12 systems tested from 1975-84 only 4 generated significant profits. Of these four, 2 were channel breakout systems and one was a dual moving average crossover system. A later study published in 1990 compared 23 technical trading systems on data from 1976 -86. Once again channel breakout systems and moving average systems came out on top. It was concluded that a channel breakout system was the best starting point for all technical trading system development

The final conclusion of all this research was that the most successful of all systems tested was Donchian's 4 week rule which is simplicity itself:

1. Cover short positions and buy long whenever the price exceeds the highs of the four preceding full calendar weeks.

2. Liquidate long positions and sell short whenever the price falls below the lows of the four preceding full calendar weeks.

Wonder if anything's changed http://static2.trade2win.com/boards/images/smilies/icon_lol.gif

[NeverEnough]

I pointed out the exact same passage on the "Your One Line Trading Tip" thread, post number 130.

That was the one passage which underlines the fact that no-one can consistently predict the market, hence trend-following, MAs etc are so logical to use.

It is also brain-numbingly simple to use.

However, the drawdowns test your resolve !!

[ahonepewafafo]

I am often suprised at the number of people on T2W who make statements of fact based on their own experience/perception

Maybe your post should read:-
"no-one i am aware of can consistently predict the market"

[akigurulo]

I stand corrected.

[AlbertBit]

An interesting post

When talking of lows and highs are they intraday or end of day ?

Have you used the system ?

trendie

Have you used the system, if so on what have you used it, did it work for you and what drawdown did you get ?

Regards