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one can take a methodology and curve-fit it to his or her liking by using an overabundance of variables to address a number of market conditions. These conditions will change in the future; they often do. I have found over the years that if a system has more than five variables, it falls apart soon after its release. Just peruse the Futures Truth rankings and see for yourself. Dual Thrust uses four variables, and I consider that the limit. As an extension to this argument, ask the developer to provide a three-dimensional profit curve for a wide range selection of his variables. This is a good way to visually see if you have a good robust model or just some isolated area of profit surrounded by an abyss of losses. In the February/March 1998 issue of Futures Truth, Dual Thrust was put to the real test. They applied it to 60-plus domestic and foreign markets. On top of that, they chose only one parameter set for all of the markets and found it to be a very robust system by performing in almost all of the markets. |
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The bottom-line real test would be for the purchaser of the software to ask the developer for any real-time results of anybody using the model. That should flush out about 90 percent of the noise factor. Unfortunately, with the advent of TradeStation, there has been a proliferation of software developers; the number has risen exponentially over the years. TradeStation has several bugs in it which have not been resolved to date. There is some Monday morning quarterbacking going on in that some unscrupulous developers have been taking advantage of this weakness. Supposedly, this is being taken care of in version 5.0. Therefore, the platform for developing the software model is very important to consider. |
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Another facet to the software model would be the amount of markets that it can trade. There are too many systems out there that only trade one market. A more robust system will trade several markets, although that could be considered by some to be a form of overoptimization. |
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Neal: Where can people reach you? |
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Mike: They can reach me at (800) 315-3893. My e-mail address is wetradeall@aol.com. My Web site is www.tradefutures.com. |
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