Strong and Weak signals

[Pascal]

Pascal, I don't follow the sectors table much, but since the recent market action in the last couple of months was characterized by a strong sector rotation, could we buy with confidence those sectors, that started showing relative strength on MF?

Thanks a lot.

My backtests have shown that when you buy a sector that just issues a buy signal and if you do so against the market, you will end up on average with a neutral position (the market direction is strong, but your sector's opposite direction is helping you). The best is to buy a sector when yo have a sector buy signal. And the best sectors to buy are those with the worst price RS... until shorts have finished to cover. Then, you need to move to the sectors with strong thrust or best ratings


Pascal

[slgerritz]

My backtests have shown that when you buy a sector that just issues a buy signal and if you do so against the market, you will end up on average with a neutral position (the market direction is strong, but your sector's opposite direction is helping you). The best is to buy a sector when yo have a sector buy signal. And the best sectors to buy are those with the worst price RS... until shorts have finished to cover. Then, you need to move to the sectors with strong thrust or best ratings


Pascal

Where on the website do we find the sector's relative strength and what constitutes a buy signal or a sell signal for that matter? I know I should already know this. Also, concerning using strong robot signals to buy and using a signal change to sell, if I want to protect a good or satisfactory profit from the original strong buy signal should I then sell when the next buy signal change to a weak buy?
Steve

[Pascal]

Where on the website do we find the sector's relative strength and what constitutes a buy signal or a sell signal for that matter? I know I should already know this. Also, concerning using strong robot signals to buy and using a signal change to sell, if I want to protect a good or satisfactory profit from the original strong buy signal should I then sell when the next buy signal change to a weak buy?
Steve

You first vist the filters section and click on the first link that leads to the repository file (more explantions are on the FAQ). Then, when the repository file is open, you click on the sectors sheet.





Pascal

[slgerritz]

You first vist the filters section and click on the first link that leads to the repository file (more explantions are on the FAQ). Then, when the repository file is open, you click on the sectors sheet.


Attachment 8673Attachment 8674


Pascal

I found the sectors spreadsheet. There is no column labeled RS. Is term relative strength or RS synonymous with "Strength Aver Tot EV" ?
Steve

[Rembert]

Thanks for that profit vs trailing stop overview Billy. Interesting results.

Is this true for the IWM bot as well as the GDX bot ? I'm asking because if I remember correctly the GDX bot was described as being more of a reversion to mean system then a trend system.

[Billy]

Thanks for that profit vs trailing stop overview Billy. Interesting results.

Is this true for the IWM bot as well as the GDX bot ? I'm asking because if I remember correctly the GDX bot was described as being more of a reversion to mean system then a trend system.

Good morning, Rembert.

These results were for the IWM robot only. If Pascal has also backtested for the GDX robot, I'm sure he will post the results here (he's out of office for a short while). Billy

[Pascal]

Good morning, Rembert.

These results were for the IWM robot only. If Pascal has also backtested for the GDX robot, I'm sure he will post the results here (he's out of office for a short while). Billy

I just returned. The GDX robot only uses the LT signals. So there was no point of testing the same trailing stop strategy.


Pascal

[Pascal]

I found the sectors spreadsheet. There is no column labeled RS. Is term relative strength or RS synonymous with "Strength Aver Tot EV" ?
Steve

The "worst stocks" sheet carries a list of sectors ranked by price RS (Col F & G).


Pascal

[Billy]

Also, concerning using strong robot signals to buy and using a signal change to sell, if I want to protect a good or satisfactory profit from the original strong buy signal should I then sell when the next buy signal change to a weak buy?
Steve

Steve,

This is part of a discretionary decision that the robot will not make with its current algorithms (second column).
Pascal has backtested such strategies and you can see that there is not much performance difference, but you increase the number of trades (and costs, commission, stress) by about 20%.
Based on these results, we decided it was not worthwhile to complicate further the robot signals.
Again, the robot signals and statistics can be used as a discretionary guide for experienced full-time traders, but for most people, they are the optimal compromise, especially for novice or part-time traders and for people with a full-time job who only trade EOD signals.
Billy