Hi Sam,
In the original thread there were some additional flowcharts detailing all the original rules. I think those were by niftychance. Those flowcharts helped me to understand this method a lot more easily than by going thru all the text descriptions.
I would suggest that anyone who needs to get a good understanding of this method should consider doing this simple excercise:
a. Read thru all the rules as posted by Saint on the original thread and also the rules as posted here. (On the original thread, you have the original rules, rules with modified gap rules and the final rule set which are essentially again the original rules)
b. Re-read the rules and try to re-write the rules in your own language. I would recommend those who are comfortable with languages other than english to write the rules in the language with which they are most comfortable.
b-i. Alternatively create flowcharts of the rules as you understand them. You can make the flowcharts using simple boxes on a piece of paper.
c. Now go thru the rules as given here and compare them with what you have summarised them as. See if you missed anything.
At this stage, you should be knowing the method by heart. If you are still not able to understand this method, then stop here and read the teach a man to fish thread from first post to last post. If you are still not clear, read thru all the posts on the original 60 min flow thread again.
If you are still not able to understand the method, then give up and find some other method to trade.
At this stage, you should know the rules very well. Now you should go and do a thorough backtest of the rules using past data. Unless you are experienced with trading and backtesting using charts, I would recommend using any trading platform/charting software that allows you to replay historical data. AmiBroker does a decent enough job of this.
During the backtesting, apply the filters as given on this thread and see how the method works for you. You should next consider doing another round of back testing with the aim of finding the most appropriate filters for the securities that you are looking at trading. The filters should prevent whipsaws, but not so many that you end up compromising the profit potential of the system.
Now you should compare your backtested results with those of Saint and others posted on the original 60 min thread and see if you are doing things differently. Try and fill any gaps in your understanding of the method and that of others.
At this stage, you should be more or less ready to trade the system. You can go ahead and trade the system independently, but I would suggest that before you begin trading, do paper trading for 2-3 weeks. Compare your paper trades with that of others posted on the weekly discussion thread and clarify any doubts you have.
If all this sounds like a lot of hard work, then you should consider some other method to trade.
-- no1lives4ever
