Reducing whipsaws

How do you know when a trend has started? Ended? This forum is for discussions about trend indicators and signals.
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Nussgipfel
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Reducing whipsaws

Post by Nussgipfel » Thu Mar 30, 2006 10:10 pm

I am using a long only US equity breakout system that I am testing during the 2000 to 2002 bear market. One of the challenges is not to buy too many countertrends with the result of getting stopped out too many times. Sofar I have been playing around with the ROC of LT MA and MACD and wonder what other methods you recommend I explore.

I am asuming that if the system will keep me reasonably well out of trouble during the worst of times it should be doing relatively fine in good times. Any thoughts on this would be appreciated as well.

James A
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Re: Reducing whipsaws

Post by James A » Fri Mar 31, 2006 9:47 pm

Nussgipfel wrote:I am using a long only US equity breakout system that I am testing during the 2000 to 2002 bear market. ... I am asuming that if the system will keep me reasonably well out of trouble during the worst of times it should be doing relatively fine in good times. Any thoughts on this would be appreciated as well.
The same thought occurred to me!

I have collected S&P500 data from yahoo back to 1969, and I'm currently deleting the good years and back-adjusting the remaining data to account for the discontinuities.

I figure that if my system outperforms the "market" when it is falling over many years/trades, that it will perform very nicely during the real market. *fingers crossed*

I'm still working on the system mechanics so I haven't tested it yet, but I'll have a tough set of test data when it's ready. :)

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