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Monday, July 5, 2010

Trendfinder Update

This is just a quick update on the Trend Finder, starting with a brief description from the original post-

After spending the last few months putting together a set charts and indicators with the ultimate goal of setting up a mechanical trading system for my personal use, I have now reached the next point of testing in real time, after some limited back-testing has shown some promising results.I am using a total of nine different indicators to provide buy and sell signals in a Voter system, and am now in the process of determining and tweaking the correct weight to give each signal, as some are more important then others.This new system will replace the older system I have been using on the daily posts to show the direction of the current trend where I was using a system of higher highs, and lower lows based on the important ones according to Elliott Wave Principle. This new system also has an element of Elliott Wave built into it, and will provide a range of levels from 100% bearish, to 100% bullish, in 25% increments, catching a much larger chunk of the trend, with less lag time between trends.As time goes on, I will provide monthly updates on the progress of this system, along with the results in a spreadsheet format. As the signals change, I will be updating them at the top, right-hand side of the blog, complete with the date of the change, and will also mention any signal changes in the daily post as they happen.Please do not ask what I am using for signals, some of the charts you have seen before, but most have been kept under lock and key, and PLEASE understand, This is for Educational Purposes Only!!!!
The one question I have been ask the most since starting this two weeks ago was, What size of trend am I trying to catch?
I hope this chart answers that question because this is not for day trading, but for catching the majority of the larger trend. Since the bottom back in early '09, there have now been twelve distinct trends, and it is those that I am trying to catch.
This is how the Trendfinder has played out since I started posting it on the blog, although this is showing the trend change as happening at the end of the day, most signals were given during market hours, but to keep it consistent, I have chosen to display it as EOD pricing for now. I have been noting the signal changes as soon as the happen during market hours in the daily blog, but will continue to record them in the spreadsheet and in the upper-right hand corner of the blog, under "Trend Finder" as EOD timing, and pricing just to make life easier for me, as this evolves I will start recording the changes as soon as the happen, and record the exact time and price.
This is one of the indicators I am using, a simple 14/28 average, on a one hour chart. It does a good job on tracking the trend, but does have a slight bit of lag, and see-sawing action during the trend causing to many signals changes during the trend, and that defeats the purpose of minimizing the number of trades made per month. I have adopted a weighted system to take this into account and is the reason why I am using a total of nine different indicators, all with varying weights for the over-all system. At the end of each month I will review, and adjust the weights to maximize the Trend Finder.

1 comment:

  1. Hey Mike...looks like you are on to something!