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If you look at the performance of a strategy over time it will usually show peaks and troughs in the equity curve, just like a chart of a share price or any other security. Take the chart below showing the equity curve for a simple moving average cross strategy, in which a buy order is given when the 50 moving average crosses above the 200 and a sell when it crosses back below the 200 on a 15min chart of eurodollar.
Currently the equity curve lies in negative territory and seems to indicate that the strategy is unprofitable, however, an analysis of the same chart using classical technical analysis tools yields a possibly different interpretation of how it might perform in the future. The picture below shows the same chart with some technical annotations added on:
In the figure above we can see the equity curve with a trend-channel drawn on and price patterns circled. In fact it appears that the equity curve adheres to similar laws that govern the price movements of other financial assets, for example, moving in trends and showing? patterning. This indicates it could be possible to analyse strategy equity curves in the same way as normal share charts and currency pair charts are interpreted.
To continue with our analysis therefore, on the chart above there is evidence we have reached an important low given the recent touch with the lower trend-line and the outline of a possible inverted H&S which is currently developing its right shoulder.
The current possible inverted H&S has a neckline at roughly -$8765.00. If this is broken it could usher in a new phase of improved performance for the strategy with a possible initial target lying just below zero at about trade number 850. Based on this analysis now could be a good time to begin trading this strategy, with a possible likely run up of over $8000.00 on the horizon.
The possibility that equity curves can be analysed using the same techniques as market technicians use to analyse financial markets is an interesting idea and one I believe worth perusing, although it requires specialist charting software, or the use of an excel add-on for the purposes of analysing the raw data using chart indicators.
It would be particularly interesting to use a clear-cut method for switching a strategy on and off, such as a point and figure chart format with its particularly crystal clear signals. Indeed it should be possible to adapt an equity curve to a point and figure format simply using graph paper by hand.
In this way it would be possible to optimise the strategy not simply from a mechanical indicator-led perspective as is currently emphasized but also by the analysis of a simple strategy?s equity curve using an objective on-off switch to optimise profitability. This gives trading system designers a two-pronged attack to enhancing the profitability of their trading systems, as well as another level of information on which to base trading strategy decision-making.
Source: http://blog.forex4you.com/using-equity-curve-analysis-to-improve-forex-strategy-performance/
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ScienceDaily (Dec. 5, 2012) ? A new galaxy class has been identified using observations from ESO's Very Large Telescope (VLT), the Gemini South telescope, and the Canada-France-Hawaii Telescope (CFHT). Nicknamed "green bean galaxies" because of their unusual appearance, these galaxies glow in the intense light emitted from the surroundings of monster black holes and are amongst the rarest objects in the Universe.
Many galaxies have a giant black hole at their centre that causes the gas around it to glow. However, in the case of green bean galaxies, the entire galaxy is glowing, not just the centre. These new observations reveal the largest and brightest glowing regions ever found, thought to be powered by central black holes that were formerly very active but are now switching off.
Astronomer Mischa Schirmer of the Gemini Observatory had looked at many images of the distant Universe, searching for clusters of galaxies, but when he came across one object in an image from the Canada-France-Hawaii Telescope he was stunned -- it looked like a galaxy, but it was bright green. It was unlike any galaxy he had ever seen before, something totally unexpected. He quickly applied to use ESO's Very Large Telescope to find out what was creating the unusual green glow [1].
"ESO granted me special observing time at very short notice and just a few days after I submitted my proposal, this bizarre object was observed using the VLT," says Schirmer. "Ten minutes after the data were taken in Chile, I had them on my computer in Germany. I soon refocused my research activities entirely as it became apparent that I had come across something really new."
The new object has been labelled J224024.1?092748 or J2240. It lies in the constellation of Aquarius (The Water Bearer) and its light has taken about 3.7 billion years to reach Earth.
After the discovery, Schirmer's team searched through a list of nearly a billion other galaxies [2] and found 16 more with similar properties, which were confirmed by observations made at the Gemini South telescope. These galaxies are so rare that there is on average only one in a cube about 1.3 billion light-years across. This new class of galaxies has been nicknamed green bean galaxies because of their colour and because they are superficially similar to, but larger than, green pea galaxies [3].
In many galaxies the material around the supermassive black hole at the centre gives off intense radiation and ionises the surrounding gas so that it glows strongly. These glowing regions in typical active galaxies are usually small, up to 10% of the diameter of the galaxy. However, the team's observations showed that in the case of J2240, and other green beans spotted since, it is truly huge, spanning the entire object. J2240 displays one of the biggest and brightest such regions ever found. Ionised oxygen glows bright green, which explains the strange colour that originally caught Schirmer's attention.
"These glowing regions are fantastic probes to try to understand the physics of galaxies -- it's like sticking a medical thermometer into a galaxy far, far away," says Schirmer. "Usually, these regions are neither very large nor very bright, and can only be seen well in nearby galaxies. However, in these newly discovered galaxies they are so huge and bright that they can be observed in great detail, despite their large distances."
The team's further analysis of the data soon revealed another puzzle. J2240 appeared to have a much less active black hole at its centre than expected from the size and brightness of the glowing region. The team thinks that the glowing regions must be an echo from when the central black hole was much more active in the past, and that they will gradually dim as the remnants of radiation pass through them and out into space [4].
These galaxies signal the presence of a fading galactic centre, marking a very fleeting phase in a galaxy's life. In the early Universe galaxies were much more active, growing massive black holes at their centres that swallowed up surrounding stars and gas and shining brilliantly, easily producing up to 100 times more light than all the stars in the galaxy together. Light echoes like that seen in J2240 allow astronomers to study the shutdown processes of these active objects to understand more about how, when, and why they halt -- and why we now see so few of them in younger galaxies. This is what the team aims to do next, by following up on this research with further X-ray and spectroscopic observations.
"Discovering something genuinely new is an astronomer's dream come true, a once-in-a-lifetime event," concludes Schirmer. "It's very inspiring!"
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Source: http://feeds.sciencedaily.com/~r/sciencedaily/space_time/astronomy/~3/ZDBEW00bj6I/121205083840.htm
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BURBANK, Calif. (AP) ? Los Angeles police say they've recovered a stolen 1957 Chevrolet Bel Air Convertible that belongs to talk-show host Phil McGraw.
Detective Jess Corral said Tuesday that investigators recovered McGraw's classic car, along with 13 others, after law enforcement began targeting auto theft rings.
McGraw is known as television's "Dr. Phil. His car was stolen from the RODZ shop in Burbank in August, and was found with minor damage.
The car is worth at least $80,000.
Source: http://news.yahoo.com/dr-phil-stolen-classic-chevy-recovered-022905049.html
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