Backtesting Technical Analysis
Wednesday, January 30, 2008
OK, so I've found an easy to use program to back test the Rule #1 TA rules. It is called Seer. A fully functional 30 day eval can be downloaded here. Here is my XML file which contains the rules and a database of somewhat rule1 stocks to run it on. I have found with this database that a buy and hold strategy will yield returns of ~20% with this portfolio while using the TA tools will yield ~14%. The software runs through your symbols alphabetically and does not look for selling at a specific target price or starting your buy run at a particular MOS price. It's purely TA. So, is it worth the 6% annualized return to protect your investments? That depends on how well you know your businesses. It also depends on the risk that you want to maintain as an individual investor. If anyone can utilize the work presented here and find any more meaningful data, please post your findings here. I have been skeptical of following the mob, especially in this market where there are many bargains. However, this may just be my ignorance speaking.
But remember, through it all, I'm looking out for you:
The Little Guy
Posted byLookingOutForTheLittleGuy at 2:45 AM