Fiddling around this morning and so I decided to run some updated tests on my favorite filters and show you the results - or - what a difference a month can make. Actually I'm glad that we got this dip to work with because it helps assess the various filters in bad times as well as good.
You can see that I've retested against two separate 80 day periods - one overlapping the other. I began with the basic filter – the basic filter is the filter that contains all of the common elements of every filter I develop such as price range, volume minimums, and any EMA or other overlays I might want to see on my charts. It is as vanilla as they get and even this filter produces a profit in good times when the selection is based on the highest volume of the output day. But if your win percentage can’t beat the basic filter then you probably don’t have a very good filter.
I followed that with the ATR and RSI filter. Note that the Win percentage stayed close, as did the Reward/Risk ratio and the ROI.
The BOB filter also maintained a consistent win percentage but, as expected, it outputs a much better ROI when times are favorable – but 87% is nothing to sneeze at when times are not so good.
Break Out is the best of the bunch. Interesting item about this filter is that it isn’t as prolific as the others – only about 1 selection every other day but that maintained through both periods. In period 1 there were 44 selections and in period 2 there were 42. Of course, breakouts are the very best method regardless of time period.
You don’t need any special skills to be able to find breakouts or even any special software – you just need to be observant. In my next post I’ll show you how to visualize breakouts without a lot of special equipment, software, or even knowledge.