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Firstly, many thanks to Steve Karnish for the Cedar Creek webinar. As
always, Steve is very generous with his time and trading systems knowledge.
I regularly trade the indices and FX on a short/very short timeframe and so
I was particularly interested in viewing this particular webinar.
I am sure that everybody was as impressed as I was with the 2008 equity
curve of the CMO setup on the DJI as demonstrated by Steve. However, I
would suggest extreme caution to anybody tempted to actually trade this
strategy. 2008 saw a plunging stock market accompanied by very high
volatility. In such a market, practically any entry strategy, if
accompanied by sound money management principles, will be profitable.
If the CMO strategy had been traded as described between 2002 and the
beginning of 2008, in a rising market with generally low volatility, it
would have barely broken even before commissions and slippage. subtract
several hundred commissions and this strategy would have levelled most
trading accounts.
Considering the number of inexperienced traders on this board who may be
tempted to accept as read the conclusions drawn from demos such as this, I
feel that it is essential to add any necessary caveats to the published
system test results. In this case, the caveat must be that this strategy
will only return these kind of results in a highly volatile market, the
existence of which will only become apparent in retrospect.
I would suggest that search for the Holy Grail is still very much alive.
Regards,
Kevin
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