Monday, January 18, 2010

Free Simple Moving Average Crossover Testing

I've been putting together some spreadsheets that test simple and exponential moving average crossover trend following systems over the past several weeks. I already had several tools that I put together over the past year and decided it was time to make them available.

The free file (which you can download here) allows you to test simple moving average crossover systems for 15 preselected stocks and ETFs on data from 1993 to 1/15/2010.



The paid version (which is still being improved and should be available within the next week) allows you to:

-Choose up to 15 stocks or ETFs you would like to test as part of your portfolio
-Test a combination of simple and exponential moving average crossovers
-Test leverage effects
-Test the use of an Extreme Market Filter which reduces position sizes in historically stressful market conditions
-Perform parameter optimization

For beginning trend followers, this is an essential research tool. I had a lot of problems with trading as a beginner because I didn't know how to size positions, when to enter positions, when to exit positions, used too much leverage, etc. This tool shows you how trading a simple system could improve trading performance.

A few years ago, I spent several thousand dollars on a trading system development tool that I use for the futures markets only to find out that some of the simplest systems are the most effective and robust methods out there. While I do like it a lot and I still use it to develop trading systems, I've found that just using excel is a pretty effective way of testing and is much cheaper if you have some programming know how. So hopefully these tools can help some of the beginning trend following traders trading small accounts to improve their results. Pricing should be between $100-150 max.

I'll be looking for a few testers to try out the paid version in the coming days so if you want to try it out for free, contact me at sigmaseek@gmail.com.

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