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I have been playing with Automatic Analysis and I'm puzzled. My
system is basically buying/selling and shorting/covering on a 3 day
moving average.
My formula is simple:
Sell = Cross( MA(Close,3),Close);
Buy = Cross( Close,MA(Close,3));
Cover = Cross( Close,MA(Close,3));
Short = Cross( MA(Close,3),Close);
My settings are:
365 day test
Initial amount = $2000
Long and Short
I use Scottrade.com so $7 per trade
Long = Buy and Sell @ Open
Short and Cover @ Open
Maximum Stop Loss 5%
Trailing Stop Loss 5%
Every stock I've tested has made money and usually in the 500% to
5000% range for Return on Account. With the MA only being 3 days,
the number of trades is high(usually 60-80) but commissions do not
account for much over the year span considering the outcome.
$7*70=$490 to buy/short and $490 to sell/cover = $980 for the year.
The percent trades profitable is usually better than 85%.
What am I missing here. I have to be doing something wrong because
this is too easy.
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