| JUN 1992
Reversing For Dollars by John Sweeney
Reversing For Dollars by John Sweeney Harebra ined ideas bein g a plentiful ite m in my daydreams, the idea tha t I mentione d in April's Settlement tha t I implement a n automa tic reversin g tra de at my maximum a dverse excursion ( MAE) stop point had less than a 2% chance of survival after analysis. I tested it anyway. (To spare your digging out old issues, this idea is ex plained in Figure 1.) BUT FIRST, A SYNOPSYS Anyone who dropped in on this Settlement without having read the last five must be wondering what in the world I'm talking about. Briefly, I defined a basic, underlying trading rule in the November 1991 Settlement with no more than a casual observation from a chart. That turned out to be profitable. Next, I showed how to measure the system's behavior to put in stops at the right place (December). Then I tested the system (January) successfully on five years of data. Emboldened, I next tried to define an add-on trade—a separately capitalized trading opportunity triggered by the underlying trade, only to fail (February). I had better luck in March and April finding a viable add-on strategy. In April, the whole reversing discussion began, culminating here.
by John Sweeney
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