Backtest

I ran a backtest on a technical pattern I've been interested in this last week or so. It turns out that on AAPL it pays off handsomely for a mere 8 minute hold (profit could be extended if I programmed several other pattern exits).

It can be difficult to figure out exactly what leads where, but it is especially helpful if you can quantify the traits you are looking for. At least, that way, you can run expectation tests on your data. Even if it is not perfect, it can give you an idea of what works and what does not.

I'm going to keep these results for myself, and perhaps, run it on a few other high volume stocks :) This time around I'm looking for stocks with slightly tighter spreads. I'd like an average of $0.02 or less...

On as side note, I'd recommend signing up for all the free services Rob provides at OvernightEdges.com. They're helpful, and very interesting.