Replies to post #9159 on MDA - Market Direction Analysis (MDA)

[augieboo]

<<<Do you have a scalp system now??>>>

Hi Warp,

Yep. I got tired of watching you have all the scalping fun. {G} It's a bit more simple (simplistic?) than yours. It has only three components and I have no idea how to make the thing spit out a percentage buy-in, but it looks promising nonetheless. (I'm still using the trend-follower as well, and am trying to work out a way to combine them.)

Here's a chart...



By the close of market today I was thinking you'd probably have jumped in. Your system is just a tad more aggressive than mine -- or maybe it's just better? {g}


re: The Gurus

You missed one:

michiganstockpicker...
http://www.investorshub.com/boards/profile.asp?User=27267

Thread...
Michiganstockpicker group
http://www.investorshub.com/boards/board.asp?board_id=2019

Jerry actually seems like a decent fellow -- although he can be a bit overbearing at times -- rather like a used car salesman.

Jenna I don't know well at all. She asked me once if she could borrow some of the charts I post on market indices, (says she only charts individual stocks), and promised she'd always give attribution, so I said what the heck.

I have no idea who this Michigan Snot Picker ... er "Stock Picker" is. {g}


re: Timing services & the like

Remember that Excel-based thingie you told me about? Well I can't run the thing 'cuz I'm still back in the dark ages with Excel '97 and it requires 2000+. What is your impression of it?

[Namiar]

For purposes of closure, I closed the NDX long scalp position that I entered Friday:

<<<My model had a buy today, at least the first laddered entry. I am in at 84% long (out of 200%) via the Profunds Ultra OTC fund (was 100% cash).>>>

As this board is meant to be instructive, I will provide rationale on the buy and sell.

I use a statistical optimization model. When a OB/OS indicator gets to be so low, then I begin to ladders in long positions.

The OB/OS trigger is set so as to optimize returns over the 8 years of the backtest. I could set trigger point lower, but this would give me alot less "action", athough the Win-Loss percentage would be greater. I could also set a shallower trigger point that would give me alot more action. During Bull markets, it makes sense to set a shallow trigger as the selloffs are most frequently very modest (like the most recent one).

So I mess around with the OB/OS trigger so as to provide the best backtested returns. In the hopes that the future will give similar results. And actually, I do not use the trigger points that give the best returns in the backtest.

My personal pain threshold is such that I would prefer not to take big hits, even if in the long term it pays off to take those hits. So I picked a set of buy triggers that provides nice backtested returns, but also keeps the backtested model from fluctuating too wildly.