BackTesting Blog

The MoneyShow Network interviewed me about trading metrics — what to look for if you are starting from scratch or if you are buying a system.

At the next MoneyShow, I’ll be talking about two of my back-tested trading systems. Click for more info.

Tim Bourquin of the Traders Expo interviewed me shortly after I had (manually) backtested several option trading strategies. Watch the video above to hear how it went.

To learn more about my back-testing and strategies, join me at the MoneyShow. Click for more info.

Manual Backtesting: sometimes it really does come to this!

Rather than do all the backtesting yourself, come to the Moneyshow to see the results of my backtesting. Click for more info.

You might want to check out my latest research on sector rotation:

https://guidance.fidelity.com/viewpoints/buy-and-hold-sector-rotation.

Fidelity Investments commissioned me for the Viewpoint article and it turned out quite good in terms of decent return with limited overhead and risk.

Even better, after the article was published, I improved on the strategies to get higher performance and more consistency.

I’m continuing to research to flesh out a complete trading strategy which I plan to discuss at the MoneyShow Las Vegas:

Thursday, May 17 • 7:45 am – 8:30 am

I hope you can make it to Las Vegas and I’ll keep you posted on the new strategy as it develops.

With the market lurching up in fits and starts, you may be wondering when to take your money off the table. This article investigates exits in detail to help you decide on a good strategy for you. It covers

• Stop Losses
• Trailing Stops
• Profit Targets
• Scaling Out

https://guidance.fidelity.com/viewpoints/cashing-in-on-crashes

Have a look at my research on trend-following indicators in which I systematically analyzed 10 ways to ride the trend in US stocks. The back-testing was done with Wealth-Lab Pro(R) for Fidelity Investments. The stocks considered were the S&P500 components. The 10 indicators tested were:

• Average Directional Movement Index (ADX)
• Commodity Channel Index (CCI)
• Channel Break-Outs (NH/NL)
• Moving Averages (MA)
• Moving Average Crossover (MAXO)
• Moving Average Convergence Divergence (MACD)
• Momentum (Mo)
• Rate of Change (RoC)
• Linear Regression
• Chaiken Money Flow (CMF)

Check it out – the data may surprise you!
https://guidance.fidelity.com/viewpoints/how-to-befriend-the-trend

Tags: ADX, CCI, CMF, Fidelity, MA, MACD, MAXO, Mo, NH/NL, RoC, WealthLab

As the stock market twists and turns, you might find this video handy. In it I discuss key indicators for successfully trading market turns as well as pointing out a few common pitfalls to avoid. In short, emotional trading can get us in trouble and having a disciplined, objective approach can help us stay on top of the market and stay ready to take advantage of new opportunities as they present themselves. Click here to watch video.

To learn more about trading market turns, you’re welcome to attend my free presentation on that topic at the Traders Expo Las Vegas on Nov 18, 2011.

This video outlines some of the biggest trading mistakes, including a new one courtesy of deep pools of liquidity. Click here to watch now.

To learn more about trading objectively, you’re welcome to attend my free presentations at the Traders Expo Las Vegas on Nov 18, 2011.

This MoneyShow interview highlights several things to look for to identify an excellent buying opportunity in the stock market. I recorded it in August and I think the message still holds.  Short summary as of this writing is that some of the signs were present in Oct 2011 but the market still has high valuations.

To get a current update of the state of the market, join divergence-alerts.com or attend my free presentation at the Traders Expo Las Vegas on Nov 18, 2011.

Tags: MoneyShow, TradersExpo

I back-tested oscillators for swing trading to research an article for Fidelity. The results suggest simpler is better. Right now we’re in a market that’s lower than 6 months ago, higher than 10-days ago, and moving downwards. Backtesting confirms this is likely the top of the current trading range. Read the full article back-testing oscillators here:
https://guidance.fidelity.com/viewpoints/swing-trading-indicators