DI Factor
After some initial investigation into the DI factor, there's only one thing I can really say conclusively. A large DI factor is indicative of a large move on the day of crossover. This isn't necessarily a good signal (look at USD/NOK from yesterday July 16 cross on HUGE upward move)
Going to do some additional investigation into some other variables such as is there an optimal level of DI values for the cross for a strong signal (ie is it better if they are both in the high teens when they cross, or near 10, or less than 10), as well as maybe factor in the "DI Factor" on that as well.
Anyway, as of now my capital is up 4% (since last Friday) *BUT* my two current DMS positions are showing drawdowns of 5% (putting me at a net of -1%). I realize that DMS is going to have some times where you SAR and take a loss, but I'm going to try to find a few good DMS trades (thinking 3-4) and follow them for at least a few weeks. From all the historical charts, the DMS is a solid winner. Of course, having recently driven cross country from Arizona to North Carolina and trying to take pictures from the car, I do remember some of the best images where seen in my rearview mirror.
Seems to fit right along with Buffett's quote to the effect of "In the business world, the rearview mirror is always clearer than the windshield."
I can say though I'm seeing the power of leverage and also seeing the "forest from the trees". I would personally say that *if* you're going to trade these systems, I'd recommend committing a decent timeframe to them (ie 6 months or so) as I see it taking a couple of weeks to get your feet under you with them (I don't feel I'm fully there yet) and then you need time to let them do their thing. For example, I was up 4% this week, and now I'm down (on paper) 1%. So to me, trading a single week while learning the systems (you may *know* the systems but once you get on the live market you'll learn some more) and seeing that I'm down 1% is by no means conclusive. To date I've had one bad SIS trade (with some errant entries as we're seeing with Dale's recent news), and now I've got two DMS trades that are going against me at the moment, although I haven't seen the reverse cross (and EPR) so there's a chance they could turn for me as well. I will try to post my DMS trades (charts showing entry/exit) at the end of the month as well as my results for the month.
Just a quick note as well - even though Dale has pointed it out (at least to me), I am a bit of a "smart arse" sometimes (to use Dale's term :-) so please realize that its all in good fun (ie "Enron system") with the goal to try to reduce stress and contribute to helping refine the systems so we all can make profits.
|