posted
Along with a buddy at work, I wrote a program that pulls historical data from yahoo for 15 years for about 8500 NYSE, NASDAQ, and AMEX stocks (will get to OTCBB some day probably, but have to find a more reliable source than yahoo).
We then have a bunch of indicators and oscillators (MACD, RSI, CMF, Williams%, etc) and I can test approximately how different theories would have performed over the last 15 years or so. (I won't guarantee the accuracy of the data, but I would think it's at least reasonably clean).
My hunch is that 99% of the technical "signals" that people use perform no better than the market, but people have an inherent bias to remember when things do well and not when they do poorly. Also, the market in general has an upward trend, and so people may find something that appears to work, when it reality, the market itself is up about the same amount.
Another co-worker of mine heard me talking about the program to my buddy and volunteered "I always buy stocks the day after they hit a new 52-week low, and they almost always bounce from there. I sell if they make or lose 10%."
So after about 2 hours of run time I was able to say "Sorry, but your method produced an average of a 1% LOSS per trade, and considering the market's return over the last 15 years, that's a very poor return."
Anyway, the point of this thread is, if some of you are willing, to throw out some TA indicators that you think work well, or just ones that you may have always wondered about.
If there's even a remote amount of interest in this I will have to pick and choose which ones to try, so don't be offended if I don't pick yours. Just remember that I have a family and a full time job and there are only so many hours in the day.
If you'd prefer to remain anonymous (to other posters), you can PM me your request and if I run it I will post the results in this thread.
It's an Excel program, so it can be pretty flexible (like buy when the RSI is above 50 for 4 straight days and then drops below 30, and on the same day the MACDs cross), but try not to get too carried away, and try to limit requests to something that you have a genuine reason to think could work, not just random sequences like the one I just mentioned parenthetically.
Also, and this is a must, you have to give me a sell rule. Something like a trailing stoploss is doable, or hold it x-days before selling. Buy rules can be pretty complex, but sell rules need to be simpler, because of column limits in Excel, and needing matrices vs arrays to line up future sell prices with each buy point.
Who knows, maybe if we work together we can find the holy grail of TA signals. And even if not, we can probably learn some interesting things.
posted
Excellent work what about reporting companies who fail to make the numbers by 5 or 10 percent of what the market expected but still made a profit for that year or quarter. A lot of times the stock gives up 15 percent but later on recovers Eg look at Schering Plough numbers just released I feel that the 11 per cent drop in Share price yesterday will recover in a short time
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