The worst type of tests for any trading strategy is to be confronted with a different data set. What was used to “train” the script to perform on a particular group of stocks may not work as well on another group. Usually, this is where a script breaks down, its performance being greatly reduced due to the curve fitting and over-optimization done on the first tested group of stocks.

In this perspective, I ran the same modified Livermore Master Key script as in the previous test (Model 0.05 Level 1).

The outcome:

Livermore Challenge 2nd Act

As can easily be seen, the performance level has been maintained with the same general characteristics as in the previous test. You even end up with a higher return.

The Alpha Power methodology plays mathematical functions; not necessarily market indicators. The formulas are in my papers. You preset your trading behavior based on these mathematical functions and then wait for the market to hit all the triggers generating the trades. If the market does not move in a way to trigger the buy, sell or stop loss orders, you simply wait for it to come to your terms of engagement.

The method has for primary objective to accumulate shares for the long term. It will buy shares while in an uptrend ready to hold indefinitely if needed or until one of the other two possible events occur: a short term profit is generated in which case the shares are sold or a stop loss is hit.

The method is a trend following system; it buys on the way up while accumulating shares for the long run. It does need some form of trend definition. It appears, after some modifications, that the Livermore Master Key script may have, in this sense, a usable trend definition after all.

AAU  2/5/2011 :: Livermore Challenge 2nd Act AKAM  2/5/2011 :: Livermore Challenge 2nd Act ARUN  2/5/2011 :: Livermore Challenge 2nd Act ASYS  2/5/2011 :: Livermore Challenge 2nd Act

ATML  2/5/2011 :: Livermore Challenge 2nd Act BIDU  2/5/2011 :: Livermore Challenge 2nd Act CAM  2/5/2011 :: Livermore Challenge 2nd Act CAT  2/5/2011 :: Livermore Challenge 2nd Act

COOL  2/5/2011 :: Livermore Challenge 2nd Act ETN  2/5/2011 :: Livermore Challenge 2nd Act FFIV  2/5/2011 :: Livermore Challenge 2nd Act FIRE  2/5/2011 :: Livermore Challenge 2nd Act

GMCR  2/5/2011 :: Livermore Challenge 2nd Act HK  2/5/2011 :: Livermore Challenge 2nd Act HNL.TO  2/5/2011 :: Livermore Challenge 2nd Act IDCC  2/5/2011 :: Livermore Challenge 2nd Act

IGTE  2/5/2011 :: Livermore Challenge 2nd Act LTXC  2/5/2011 :: Livermore Challenge 2nd Act LULU  2/5/2011 :: Livermore Challenge 2nd Act MELI  2/5/2011 :: Livermore Challenge 2nd Act

MENT  2/5/2011 :: Livermore Challenge 2nd Act MFL.TO  2/5/2011 :: Livermore Challenge 2nd Act MGH  2/5/2011 :: Livermore Challenge 2nd Act MSN  2/5/2011 :: Livermore Challenge 2nd Act

NDSN  2/5/2011 :: Livermore Challenge 2nd Act PFCB  2/5/2011 :: Livermore Challenge 2nd Act PNRA  2/5/2011 :: Livermore Challenge 2nd Act PTI  2/5/2011 :: Livermore Challenge 2nd Act

QCOR  2/5/2011 :: Livermore Challenge 2nd Act QLTY  2/5/2011 :: Livermore Challenge 2nd Act REDF  2/5/2011 :: Livermore Challenge 2nd Act RVBD  2/5/2011 :: Livermore Challenge 2nd Act

SCSS  2/5/2011 :: Livermore Challenge 2nd Act SF  2/5/2011 :: Livermore Challenge 2nd Act SFLY  2/5/2011 :: Livermore Challenge 2nd Act SHS  2/5/2011 :: Livermore Challenge 2nd Act

SPRD  2/5/2011 :: Livermore Challenge 2nd Act SVVS  2/5/2011 :: Livermore Challenge 2nd Act TLEO  2/5/2011 :: Livermore Challenge 2nd Act TPX  2/5/2011 :: Livermore Challenge 2nd Act

UA  2/5/2011 :: Livermore Challenge 2nd Act UTEK  2/5/2011 :: Livermore Challenge 2nd Act VSEA  2/5/2011 :: Livermore Challenge 2nd Act


Created on ... June 3, 2011 © Guy R. Fleury. All rights reserved.

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