AK-10

[survivor]

The AK-10 System:
Full form: Anti-Krok 10 day break-out{aka 'How not to get eaten'}

Qualitative Proposition:
1. A basis = 7.0 pts 'looks high'

Rules:
1. Long only.
2. Enter at the 1st close above highest high 10 days back.

Definition:
1st close:
The 1st close is the most recent up day qualifying with respect to rule above after a Down day.
In other words, if in the same up sequence, you get consecutive higher closes only the 1st is counted.
The counting begins again as soon as you get a down day.
Note:Up sequence is a series of days with close today >close t-1.

Definition:
Value: = change in basis OR the basis

Purpose of study: Trade selection {or when to say no, thank you}

1. If the value is > 7.0  Pts:DO NOT ENTER.
2. Enter on all other days.

Results:

{for last 50 breakouts From Mar 2002}
{net result +ve is in the next 1-5 days or so > 10 pts or so}
{net result -ve is in the next 1-5 days or so > 10 pts or so}

a. Value > 7.0 pts : Net result  +ve  = 6
b. Value  > 7.0 pts : Net result -ve  = 13
c. Value <  7.0 pts : Net result +ve  =  30
d. Value <  7.0 pts : Net result -ve  =  4
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e. Net +ve = 36
f. Net -ve = 20
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If one uses a statistical test, something called the Fisher Exact test, the probability of the above occuring by chance is = 0.0000, ie, to 4 decimals.

Now that's an amazing result. What the test is saying, is that the above results are almost impossible, a highly non-ramdom result.

Comments:
1. Definition of net result is not exact, more work required....
2. Trade selection with value < 7.0 = Win:Loss = 30:4.... Seems extremely high
3. The Kroks can't be so transparent....or are they really stupid?
4. Shorting on the other may not be such a good idea. 13 Jan 2003... the short would have got killed by ValueCap-remember that rally.
5. It is not a bad idea to exit long when value > 7.0 or so.
6. So at least we have an exit rule which can be used for any system!!- {side benefit}
7. Will somebody check this ...