Tag Archives: down

Nervous on down stock markets? Best global stock picks for Oct 25, 2011

Nervous on down stock markets? Best global stock picks for Oct 25, 2011

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Down stock market? Profitable stock picks for Oct 17, 2010 from LSE London Stock Exchange, NYSE, NASDAQ, Toronto Stock Exchange TSE

Down stock market? Profitable stock picks for Oct 17, 2010 from LSE London Stock Exchange, NYSE, NASDAQ, Toronto Stock Exchange TSE

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What’s the best strategy to use when you have a signal provider generating a up or down signal every hour?

What’s the best strategy to use when you have a signal provider generating a up or down signal every hour?

I have an indicator that provides a signal every hour which indicates if the near future (next few hours) price would move higher or lower than the current price. I am achieving a 75%-80% accuracy on this, however I don’t have strategy to place around this. Are there any basic or more complex strategies out there that can be used with this type of indicator. To put this into context, I am current running training and testing on hourly fx data from meta trader which has HLOCV data for each bar/hour. Any help would be greatly appreciated.

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Currently if you traded on every signal, the return is very low – breaking even. If I do this with the training data, which for this system is the perfect possible signal output, the return is progressively positive over time. I guess this would suggest possibly two things: 1) there are rogue/negative/false trade reversal signals in the middle of a certain direction. 2) the model has some lag in the switching signal.

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are the price movements you’re trying to predict skewed towards one side (i.e. much more likely to go up vs down)?

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No there is no bias of either direction

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1. Try to calculate the expected return over your data set.
2. Try to calculate the expected return of doing the opposite of your signal. i.e. following your rules for taking profit sell when it says buy and buy when it says sell.
3. Compare. With 75-80% accuracy you have to see a big difference in return.

Additionally you could try to compare the equity curves produced by step 1 and step 2.

Your 75-80% number sounds suspiciously close to 75% rule for the random walk.

 

 

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Is it possible to create automated trading strategies for all market conditions? Market trend goes up, down or sideways

Is it possible to create automated trading strategies for all market conditions? Market trend goes up, down or sideways. Do system recognise the trend, before implementing its trades?

Google “trading regime change”

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You could look at the problem differently. Rather than try to forecast whether we are going into a trending period or a range trading one, you can distinguish between instruments that mean revert vs. those that don’t. Then you combine the two and you are relieved of the problem of predicting what kind of market you are heading into.
You can also trend screen a reversion model.

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I think this is possible, yes.
If you have some diversification for your portfolio and if you run several good strategies tuned with different phases in the market.
I’m actually doing that with 2 strategies, trading 11 different FX pairs. And I am working on another set of strategies that will trade on the futures market, bringing even more diversity to my portfolio.

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So, you are asking if we can predict the future. I say NO.

But, building a strategy that has a better chance of winning (more success and less failures). Then I say YES.

Part of Market game depends on chance so, I think it is always about increasing the probability of success than having a perfect solution.

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This is possible when trading fair values on long/short strategies

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If you mean a system of strategies (plural) then yes. A single strategy no.

 

 

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