Billy,Originally Posted by Billy
This is a terrific explanation, and I will study it with intention to implement a similar approach.
In fact, I had worked out with Paul's help a similar though less sophisticated approach in late September and early October. In essence I placed 1/3 in each of the following: 3X, 2X, and IWM, such that the exposure equaled a 125% position in IWM, long or short. Any sudden price spike in the 3X ETF would be taken as windfall profit with the hope to re-enter the next day if a signal permitted. This allowed a suprising outperformance of the robot.
However, I sought to follow the robot more precisely in November and failed to grab the ready outsized profits on the occassions that appeared only briefly but obviously in the 3X ETFs.
The question of course becomes: Do these human inventions warrant backtesting? Your formula is extremely precise, and I believe mine can be made so-- although as noted previously I cannot translate my procedures and intutions into complex mathematical or logical operations.
Lastly, in answer to the above question about Dr. K's MDM: When I saw what Pascal, Billy and team were assembling here, I knew immediately it offered a golden opportunity to develop my skills. The styles of traders are varied, the discussions are rich, and the wizards are willing to help.
I did have one problem with the robot. I didn't realize it at the time. I had been closely and successfully following Morales and Kacher. While I grew tired of attempting to hop on break outs and ride them for profit and I wanted to learn a style that would give me more precise entires and exits, I had internalized their approach. Thus, when the robot issued a buy announcement and the price had not formed a cup or base in June , I couldn't compel myself to follow it. I kicked myself as I missed substantial opportunities. Indeed, I would say my choice to switch has been very costly in the short term, but I expect it to be a very good long-term decision.
Thanks all,
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