isn’t necessarily a good idea. Instead, it could be a better idea to trade the weakest
stock in a group of stocks as long as the general trend is in the direction of the
anticipated trade. The reason behind this logic is that the weakest stock is more
prone to an explosive move in the direction of the anticipated trade, to catch up
with the others.
We ended Part 3 by discussing an additional research method to gain further
confidence in the system. This method took all the trades produced by a system
and scrambled them around, before it put together several random trading
sequences, with new trading sequences made up of the historical trades. Using this
method, we examined a system for its consistency and likelihood for producing
profitable trading sequences in the future, given that the profits and losses remain
within the statistical confines identified by the historical testing, but with the actu-
al order between the trades unknown.CHAPTER 23 Evaluating Stops and Exits 285