Replies to post #1840 on Rule-Based Trading Systems

[capt_jmj]

Yes, a rather distinctive "tweezer bottom" today. Up 135 NQ pts from the lows, and a 4.5% gain from the open...

[capt_jmj]

We know we are going to miss our share, but that is the price of admission price for being there for the winners. We've seen (as you probably have also) days with almost the same internals as yesterday when the market went UP. In fact, that is the central tenet of Merlin's approach, i.e. take the signal that produced the better result over the backtest period.

[capt_jmj]

There's also the theory that says when the market is acting totally irrationally, just flip a coin and you will be right half the time. The difficulty, of course, is in knowing when the market is being irrational versus just responding to normal trading pressures. We try not to pat ourselves on the back too much when we get lucky, nor beat ourselves up too much when the market throws us a curve. The bottom line is that whatever your strategy, you don't need much of an edge to beat the market.

[capt_jmj]

You got lucky this time, but with a daily RSI 4 < 30, a new Short is not a good bet...