posted 10-30-2005 02:08 PM           

AOI is basically useless and is only good for B/C software sales. Basically AOI optimizes out the historical false buy/sell signals (by factoring in future performance values) and therefore “basically tracks” the stock price. Anyone can look at the past to find out when to enter or exit positions. I can just look at the PPS plot to understand any yearly trends that some argue AOI provides. Don’t use AOI to pick a favorite analysis since it does not represent historical buy/sell signals because they have been averaged out. AOI should warn the user not to use it’s buy and sell signals because they can routinely disappear on a day to day basis although the AOI BT shows a misleading lower active buy/signal rate.

I solely recommend using only Normal back testing (non AOI). Normal back testing does not change historical buy/sell signals. Although when using opening or closing values one will get intra-day buy/sell triggers based on intra-day price peaks/valleys that may disappear at closing. I personally do not like this because many stocks have temporal repeatable intra-day spikes/valleys that I do not want to trade on. If I select opening or closing I JUST want that. Some will argue that with my desired method I could lose out on a real intra-day news event. Using opening prices only, I am still having difficulty understanding why intra-day buy/signals would change since the opening price for this last day is not changing; Does not make sense to me? It would help if Admin or Dave could explain this.

posted 10-30-2005 03:02 PM         

Johnny: "Although when using opening or closing values one will get intra-day buy/sell triggers based on intra-day price peaks/valleys that may disappear at closing. I personally do not like this because many stocks have temporal repeatable intra-day spikes/valleys that I do not want to trade on. If I select opening or closing I JUST want that. Some will argue that with my desired method I could lose out on a real intra-day news event. Using opening prices only, I am still having difficulty understanding why intra-day buy/signals would change since the opening price for this last day is not changing"
##B/C uses the last price during the day as the tentative closing price for the day, and posts to the chart & all the indicators in delayed real time. It will also show tentative buy/sell signals as determined, based on the present indicator parameters & last price. This is useful information, but the program is designed to be used with the EOD prices. This info shouldn't be so confusing that you can't use this EOD software as it is designed. I am glad to have the real time aspect of it, but I base my transactions on the EOD price or the anticipation that a signal will be maintained until the EOD, allowing me to buy or sell at a better entry price.

I do not agree with your assessment of AIO, and would hope that others will not be influenced by it. You seem unwilling to update your back testing program with newer data. Old back datings may not change their past buy & sell signals, but that is not desirable since the future is NEVER the same as the back dating program....How often do use a back dating run-forever?? I prefer to keep mine up to date....

But, I do wish you a happy Halloween, & much success with your investment endeavors.

frankenstein

posted 10-30-2005 06:19 PM           

I specifically stated opening price and not closing price because I did realize during intra-day trading the current price is used as the closing price. It appears the current price is also used as tomorrow’s opening price which I do not like, but understand your argument of being current. Carefully reading the BT opening price statement it states “ opening price the following day of the signal.” Could I get a buy signal “today” using opening prices with a stock that opened 10% down but is now is up 15 % from the open. How does “opening price the following day of the signal” work with the Open signals generated on the plots? I thought BT signals are “read” from the plots and just listed out in a tabular form.

As for AIO, I would warn users to AVOID IT. Nice for DREAMING but no value in trading. If you like to be told that you should have bought two days ago then have fun with AIO. If you like to be told that you do not own a stock that it told you to buy three days ago then have fun with AIO. IT HAS NO PRACTICAL USE!! Do not use AOL to trigger your buy and sell activity or YOU MAY BE FRUSTRATED. Its BUY/SELL signals do not accurately represent history and should only be used to indicate the trend. Trends are fine although I am here to trade and AIO can not be used for trading guidance. Just use the normal BT without optimization. I run AOL every day and thus do not understand your statement about out of date data. I will say I deal with several active stocks and therefore I may be more aware of the “three day late signals” and “the removal of past signals” that AIO causes - more than the average trader. By faithfully using AIO daily I found out quickly that AIO was not useful to me and overstates its actual historical performance.

posted 10-31-2005 07:34 AM         

but understand your argument of being current. Carefully reading the BT opening price statement it states “ opening price the following day of the signal.” Could I get a buy signal “today” using opening prices with a stock that opened 10% down but is now is up 15 % from the open. How does “opening price the following day of the signal” work with the Open signals generated on the plots? I thought BT signals are “read” from the plots and just listed out in a tabular form.

##EOD Buy signals are not based on "opening prices." “opening price the following day of the signal.” simply means that the AIO test assumes that you will place all orders for execution at the next day's open after a buy/signal is given.

As for AIO, I would warn users to AVOID IT. Nice for DREAMING but no value in trading. If you like to be told that you should have bought two days ago then have fun with AIO. If you like to be told that you do not own a stock that it told you to buy three days ago then have fun with AIO. IT HAS NO PRACTICAL USE!! Do not use AOL to trigger your buy and sell activity or YOU MAY BE FRUSTRATED. Its BUY/SELL signals do not accurately represent history and should only be used to indicate the trend. Trends are fine although I am here to trade and AIO can not be used for trading guidance. Just use the normal BT without optimization. I run AOL every day and thus do not understand your statement about out of date data. I will say I deal with several active stocks and therefore I may be more aware of the “three day late signals” and “the removal of past signals” that AIO causes - more than the average trader. By faithfully using AIO daily I found out quickly that AIO was not useful to me and overstates its actual historical performance.
##Fine, but my 2 years experience with AIO is good. It is unique to this software, and properly used is of great help. Remember, only 3 of the 16 B/C indicators are used in the conventional manner. Have you read David's excellent tutorial on B/C??##

Frank please tell me why a disappearing three day old buy signal is acceptable to you after the stock has dropped 15% in the last 3 days. No history of this buy signal although you now have a 15% loss but AIO says it never happened. Not acceptable with me because do you sell or stay in? I want a record of all buy/sell transactions which you do get with normal back testing (no changing history).
##The way I use B/C, I do not have this problem. You would have to specify how you are set up, state the equity involved, etc., so that I could duplicate what you are alluding to. The few transitory signals that I get with highly liquid, non-Penney stocks(QQQQ, XLE, IWM, etc.)are not that extreme, and present essentially no problems for me. The other tools should always be used for confirmation.##

frank