Friday, February 06, 2009
More QQQQ 3 Finger Setups
Here are the results for yesterday's Qs 3 finger reverse (short only) system using the same settings (54,16,12,10) but with pyramiding turned off. This change reduces the capital requirements considerably at the sacrifice of more than 50% of the net gain. Comparing yesterday's breakdown with this one, an alternate strategy would simply be to double your initial entry position size, which would yield comparable results to a pyramid approach.
Below, on the opposite side of the coin is the 3 finger lead (3FL)system, included in the BZB Dirty Dozen and reflecting long only trades. The test results of the system for the Qs are clearly less impressive than the 3 finger reverse, probably reflecting the overall downtrend of the market during the test period and the resultant lack of upside trade opportunities during this time frame. This suspicion is confirmed by the optimized 3FL backtest, which yields settings of (30,8,10,8). The look back period has been compressed from 54 days for the short side only 3 finger reverse trades to a 30 day look back in order to capture profitable trades.