Backtesting Exercise Nugget
Posted by Dynamike
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Backtesting Exercise Nugget February 22, 2014 02:52PM |
Hello all,
Third year GW student, long time RTT forum lurker
Just thought I'd do my part in helping others as y'all have helped me. Here's a cool "nugget" (if you want to call it that) I discovered that has helped me. I've traded LESS, but I've traded BETTER! For this backtesting exercise, I use only the 89 minute chart. (This is the smallest chart I personally use as my "decision chart" for trading. I use QCharts.)
1. I place three 89 minute charts on my page
2. I make the first chart the DOW, the second the NASDAQ and the third any one of my stocks that MOVE.
3. I take all three charts back in time to the exact same date. (Any date will do, but preferably a date after my stock has already started moving well.)
4. I go forward on each chart five candles at a time, which brings me to the first candle if the next day. (Shift key + right arrow key)
SO WHAT'S THE NUGGET?
5. I look at the first candle of each day on the DOW and NASDAQ charts. I ONLY do the trade on the STOCK if the first DOW candle closed 100+ points or more and the NASDAQ candle closed in the same direction. If so, I trade the STOCK in that same direction until the trade is over (The exit is subjective, but I personally stay in the trade until the next day if the DOW and NASDAQ are still going in my direction. If the DOW and NASDAQ are continuing in my direction at the close of the next day's first 89 minute candle and they aren't too far high or low on the StochRSI scale, I may stay in longer. If not, I'm probably out).
CAUTION: If the stock does something weird, it was probably that stock's Earnings date. (GW's number 1 rule: Always be aware of the stock's Earnings date.)
THAT'S IT. NO EXCEPTIONS. EVER.
p.s. GW's process is EASY. It's PATIENCE in waiting for my setup that's been the hard part for me.
Hope this helps. Please feel free to add any other "nuggets" y'all may have.
Thanks & God Bless!
Of course, the obligatory disclaimer:
I am not a professional. This information is for educational purposes only and should not be considered specific investment advice.
Third year GW student, long time RTT forum lurker
Just thought I'd do my part in helping others as y'all have helped me. Here's a cool "nugget" (if you want to call it that) I discovered that has helped me. I've traded LESS, but I've traded BETTER! For this backtesting exercise, I use only the 89 minute chart. (This is the smallest chart I personally use as my "decision chart" for trading. I use QCharts.)
1. I place three 89 minute charts on my page
2. I make the first chart the DOW, the second the NASDAQ and the third any one of my stocks that MOVE.
3. I take all three charts back in time to the exact same date. (Any date will do, but preferably a date after my stock has already started moving well.)
4. I go forward on each chart five candles at a time, which brings me to the first candle if the next day. (Shift key + right arrow key)
SO WHAT'S THE NUGGET?
5. I look at the first candle of each day on the DOW and NASDAQ charts. I ONLY do the trade on the STOCK if the first DOW candle closed 100+ points or more and the NASDAQ candle closed in the same direction. If so, I trade the STOCK in that same direction until the trade is over (The exit is subjective, but I personally stay in the trade until the next day if the DOW and NASDAQ are still going in my direction. If the DOW and NASDAQ are continuing in my direction at the close of the next day's first 89 minute candle and they aren't too far high or low on the StochRSI scale, I may stay in longer. If not, I'm probably out).
CAUTION: If the stock does something weird, it was probably that stock's Earnings date. (GW's number 1 rule: Always be aware of the stock's Earnings date.)
THAT'S IT. NO EXCEPTIONS. EVER.
p.s. GW's process is EASY. It's PATIENCE in waiting for my setup that's been the hard part for me.
Hope this helps. Please feel free to add any other "nuggets" y'all may have.
Thanks & God Bless!
Of course, the obligatory disclaimer:
I am not a professional. This information is for educational purposes only and should not be considered specific investment advice.
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