...got a hold on this "CONSENSUS THING" .The two tipsters think because all the other shares (i think five) have a better ratings than DDT ,it will UNDER PERFORM its market peers! ....For myself i don't for one moment think GIJ,improving as it is will out perform DDT....On another point i wish they would give the dates when they reveiwed the shares LAST ,as then we can decide if there any new developments....Anyways for all that use these tipsters they have DDT as a firm SELL!
yep, you could actually do quite well by going completely the opposite of what they say. From a trading perspective, consensus forcast is a pretty useless measure of sentiment, IMO. I have psyched myself out of trades in the past because of it, and have made a conscious decision not to use them again
barry, interestingly enough, 4% seems to be the magic number. I have just completed a wide backtest of a simple system (stochastic crossover) with a 4% stoploss and a 5% profit target (extra percent to cover transaction costs). Across a basket of TOPI shares since 2001, the majority of shares posted a win ratio of between 50%-55%. Now if I changed the stoploss to say 3% with a 4% win, the impact is staggering - less than 40% win ratio. The same applied to a 5% / 6% ratio. I then tried the reverse of the system on shorting possibilities, and my success rate was less than 30%. What I conclude is this 1) If your stop is too wide, your corresponding profit targets become less likely. 2)the market has an inherent bullish bias, meaning you are far more likely to make money going long than short
I have had similar results on back tests. In fact, I have found that, depending on your exit signal, better results are obtained without a stop loss, because it allows your trades to exit gracefully on the proper exit that you had chosen instead of being cut short because of volatility. The losses on individual trades are greater, sure, but so are the profits and there are significantly fewer stop outs. I wonder how many traders thoroughly back test the adjustments to their strategies. As you observed, seemingly insignificant changes can have staggering results, even turning 50%+ profits into losses.
Interesting veiws,thanks.Truth of the matter is that on TOPI shares i usually use ALERTS and not Stop-losses.Trouble is this year has been so dreadful that at times i used stop-losses on some shares.I usually find as you have be saying that one can rationalise and then decide the best course of action by not having stops..
The point behind my study was to test the statistical likelyhood of my entry signal being in the money (1*risk) vs out (-risk). From the 1*risk position, I now have a safe way of making my profit, which requires way too sophisticated levels of programming in Amibroker for the likes of me.