StockFetcher Forums · General Discussion · ADDICTED to BACKTESTING - SHORTS RULE ! ....help me !<< >>Post Follow-up
xplorer
257 posts
msg #35891
Ignore xplorer
5/4/2005 12:28:23 PM

I love my short screens ... but I didn't realize the treasure trove I was sitting on, until the "backtesting" was turned on. Ammusingly, some of the better Short Screens were developed when developing a LONG ... scary but true.

What type of ROI are you all getting ?
One of my shorts is pushing the 90% ROI.... and that is limiting my hold time to 30 day max ! (lets talk compounding ... EUREKA !) To be fair ... I have not played with the dates ... and the period I am working with is 12/31/04 through 05/03/05 (which has been a "Sutters Creek" for shorting). "There's gold in them hills"...

...but ...I need to develop a rock solid EXIT strategy for these shorts ... anyone have a proven method ? I have played with Stochastics hitting the lows ... and RSI hitting the lows ... and MACD hitting the lows ... but for some reason my ROI gets shattered ... usually down to a measly 50-60%....ugh.(lol)

Got any good EXIT strategies ?

...any ideas will be greatly appreciated !






corsino
259 posts
msg #35892
Ignore corsino
5/4/2005 1:15:08 PM

xplorer
Is that 90 % ROI for the year?


corsino
259 posts
msg #35893
Ignore corsino
5/4/2005 1:29:10 PM

xplorer
It would seem to me that the best shorts would be overbought conditions, not oversold.In trying to find filters on the long side, I found several that had negative ROI's well over 100%, but of course I discarded them.



corsino
259 posts
msg #35894
Ignore corsino
5/4/2005 1:57:48 PM

Xplorer
Sorry, I misunderstood you and "hitting the lows" part. However,it seems that the best results of a filter are for a few days holding periods . My "long" filters generally don't do well after about a week or so.That may apply to "short" filters too. I also didn't have much luck finding profitable filters involving stochastics, MACD, %R, etc...although theoretically and on charts, those indicators look good.
Good Luck.


xplorer
257 posts
msg #35895
Ignore xplorer
5/4/2005 2:19:05 PM

corsino ...

I thought the backtesting ROI was for the period being tested ... but you are correct , it is a yearly return.... 90 % is still an awesome yearly return.

I agree with you ... the traditional thinking is to short the over bought ... but the numbers are screaming.... 90% return is something I can live with. So why not invert the neagative ROI to making the path to the bank a well traveled one. Sometimes yah just have accept the profits...

Thanks !



xplorer
257 posts
msg #35896
Ignore xplorer
5/4/2005 2:30:51 PM

...and yes the "hitting the lows" is my EXIT position (SHORT)... and ENTRY for my longs.


corsino
259 posts
msg #35899
Ignore corsino
5/4/2005 7:10:38 PM

xplorer
I hope you do well shorting stocks, I just hope they're not the stocks I buy on the long side ! But I've read that there's good money to be made shorting stocks, since they seem to drop faster than they go up. But it's against my nature to go short.
As far as a "rock solid" exit strategy, I don't know if there is one for everybody. There might be one theoretically, but it wouldn't take into account the different psychology of each person. I would say that the time to sell, whether you're short or long, is when you start getting nervous about a stock.


xplorer
257 posts
msg #35901
Ignore xplorer
5/4/2005 8:33:08 PM

... "when you start getting nervous about a stock"
...thats why I believe in a "mechanical" exit strategy. Emotions can really wrek havoc on a trade.

I know what you mean by "against my nature to go short" ... kind of like you never go against the guy throwing the dice. But then again all I am doing is providing the shares to someones who is looking to buy them. Everyone that is buying and selling ...or selling and buying is fueling the market, and we all love the volatility...

Thanks for your views ... and good luck ... prosper ...and fare well !




hdemena
8 posts
msg #35907
Ignore hdemena
5/5/2005 8:46:11 AM

Be careful when interpreting ROI. Check the formula in the Backtesting forum. It is not actual return. If you take a silly example to prove the point: if you make one trade in one year and it returns 1% in 1 day you will have a 247% ROI, but really you made 1%. If you held it all year, the formula gives 1% ROI.


StockFetcher Forums · General Discussion · ADDICTED to BACKTESTING - SHORTS RULE ! ....help me !<< >>Post Follow-up

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