Sector Selection / Robot comparison, part 2 (need opinion on rule addition for the test)

[Timothy Clontz]

The first or four baseline tests (excluding dividends), gave the following result:

IWM 6.51%
XLU 0.91%

The second is partially over, with IWM stopped out and XLK still active:

IWM -2.21%
XLK (still active)

Right now, if I understood Billy's stop loss estimate for today, the stop on XLK is 25.27. I had not considered the issue of one stopping and another not stopping before, so here is what I will add to my rule set:

If the Robot stops but does not go short, I'll continue in XLK.

If the Robot DOES go short, however, I'm not sure how I should calculate the exit. I'm open to suggestions. Whatever I add to the rule set will remain through the test.

Tim

[Timothy Clontz]

Currently XLU is listed as my selected sector, but I'm still in XLK. Per the parameters I've set for the test, then, I'm continuing to hold XLK.

Also, I've entered the new IWM Robot price.

I'm glad the Robot is continuing the long setting, because I have not yet worked out the parameters for a stop/reverse on the Robot when a selected sector was not also stopped out.

One possibility would be to use Billy's lowest short price as an exit for a long position, but I also remember several months ago that Billy said such price "targets" significantly underperformed stops.

The other possibility would be to simply exit at the previous day's closing price as I set up for the next shorting opportunity.

The issue WILL come up again. Whatever I set up as the rule will hold through the test.

[Billy]

One possibility would be to use Billy's lowest short price as an exit for a long position, but I also remember several months ago that Billy said such price "targets" significantly underperformed stops.

The other possibility would be to simply exit at the previous day's closing price as I set up for the next shorting opportunity.

The issue WILL come up again. Whatever I set up as the rule will hold through the test.

Tim,

If your goal is to use the IWM robot signals on the other ETFs for testing potential outperformance with your system, I would indeed hold the XLK position with a trailing stop like you do now as long as the robot remains long, even if IWM is stopped out. XLK is currently giving an edge and it must be exploited. You may continue to use the indicative stop % that I send you, but be very careful never to lower your stop from any previous day. The correct trailing stop on XLK is yesterday's close minus today's % stop or 1.81%. If XLK closes higher today, you may raise the trailing stop at today's close minus the % stop stop that I'll send tomorrow morning. You only raise the stop when the latest close minus % stop rise from the previous stop level.
Once the IWM robot issues a short signal, I would exit XLK on next day's open, because the signal can only be issued EOD after the close.
Billy

[Timothy Clontz]

I think you've answered all of my questions (especially since I've been a little fuzzy on the trailing stops). Appreciate all the help, Billy.