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For Long Term Investors
Hindsight is 20 20 BUT This 20 Month Exponential Moving Average would have had you In from 2002 until 2012
from $300 to $1600 ( with a short out and in at $800 in 2008)
400% Plus in 10 years beats CDs eh ?
It would have had you Out from 2012 to 2016 …saving $400 of down side.
And now you are In at $1200.
Still holding during the present backtest.
Dreaming of another 400% by 2026 ?
What happens if you add a requirement that to buy requires a higher low?
And to sell requires a lower high?
You would have held in 2012-2013 until 1300 instead of being Out at 1600
also in real time a Higher High and Lower Low are not transparent…only in hindsight
Simple is better in this case
255 was above 253, so your first buy signal was validated.
2008 sell was validated by presence of lower high around 975, ahead of the signal.
Not sure about the 2008 rebuy. Looks like there is a higher low, but its not tagged by a price.
1798 was a lower high, validating the later sell signal at 1600.
No higher low as yet, off the 1045 “bottom”.
100% all in hindsight , these tiny highs and lows hardly show up on this monthly chart and those numbers would not be spotted in real time.
This is strictly for long term traders…Monthly close only…this type investor would not watch the charts this closely
All you need do is…Look for 2 minutes at month end and it tells you what to do
Why complicate a good thing…was this trade not good enough so far…it is stunningly simple and that is the point
When ever I try to tweek a solid strategy to eek more money out of it the opposite nearly always happens.
Trend-following systems (such as this) work when a market trends, as this one has done. Aptly retro-fitted trend-following systems work particularly well retrospectively, of course.
Trend-following systems typically don’t do well in choppy markets (even if fees and slippage aren’t taken into account). (Here “choppy” is a relative term, meaning choppy over a month-to-month time-scale.)
We have had a trending market for many years now, trending at least in the monthly timescale. I personally have done ok using the assumption of a trending market in longer timescales, and I continue to bet accordingly. However I cannot justify my assumption that a trending market will persist (though I bet based on it).
I believe that there are TA methods that purportedly estimate the probability of whether one is in a trending market vs a choppy market. Are there any that are any good? Are there any that can confirm that we are probably still in a trending market?