RichardL Veteran   Posts: 134 Joined: 9/18/2004  User Profile | Thanks Tony To be honest, you have to separate out the two key functions of OT, one being prospection and the other managing a placed trade. On prospection, unless you run a mechanical system with no optimisation (be careful in the way that OT deals with multiple strategies using All Signals Voting also), you will use optimisation carefully knowing that the systems are trying to tune to the most recent data. As events change, bars update, inevitably those systems will reflect the changed circumstances in different (possibly) signals between observations. You have to take a balanced view at the time the bar is complete whether to place a trade on the results of that prospection run. The system isn't telling you its a great trade (ie certainty right up to exit), its saying its a great entry signal (ie possibility) Once you've decided to place the trade, OT can then be used, via the trade plan, to manage the trade & reduce risk, emotion etc in the way you've set it up. Thats also why the portfolio helpfully offers to switch off optimisation for trades in trade. Sorry to labour the point, but these two functions I mention at the beginning are quite separate in OT functionality and use (for me at least) My own strategy was based on reviewing Jeff Drake's excellent booklets on reviewing charts. I designed a chart template (posted in this thread) to address these and the strategy to pick up only those stocks which fitted the charts I wanted to see (so I didn't have to scroll through the whole list). Glad the hit rate remains high but to be honest you have to read Jeff's books & understand what to look for in the charts to see its full benefit. Not every signal is going to be a good one. all the best Richard | |
