EdgeWare FastBreak Pro Version 6.5 - Manual (Page 7)

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build systems that are complementary to traditional FastBreak systems that always buy
into strength. This will become clear as each of the new options is explained. Note: The
new options will only work with Linear Slope ranking. We will give only a brief
overview here in the upgrade notes. More information can be found later in this
manual, and details on the new functions can be found in the Appendix in the
Standard FastBreak manual.
RAT (Return Advance to Trend)
Typical FastBreak trading systems usually buy maximum price strength/momentum.
Trading systems can take a different approach and successfully take advantage of buying
temporary price weakness or selling into short term price strength. RAT is an option to
take advantage of these temporary moves. The assumption is that the move is temporary
and the price will revert to the trend.
BAT (Breakout Above Trend)
Sometimes a stock will have a good positive long term price trend, but for various
reasons new buying will come into the stock and an even better trend will be established.
This is different from the BOOM option which tries to determine when a stock that has
been falling breaks out to the upside.
Changes for FastBreak Pro Version 6.4
Combine/Complementary Systems
FastBreak Pro V6.4 adds the capability to build a new trading system in conjunction with
one or two existing trading systems.
One purpose of this capability is to build
complementary systems that may reduce the MDD or volatility of an entire portfolio that
is trading multiple systems.
As an example, perhaps the investor has developed a system that trades ETFs. The
annual return of this system may be excellent but has significant drawdowns on a regular
basis. This is often the case with a system that trades based on very long term trends
without the benefit of tight stops. FastBreak Pro now allows you to import the equity
curve (FNU file) from this existing system and the optimizer will attempt to build a
complementary system that reduces the overall MDD when the two systems are traded
together. Perhaps the optimizer finds a new trading system that makes short term trades
or finds alternative funds that don’t have a high correlation with the equity curve of the
original system.
This functionality can also be used to build FastBreak trading systems that complement
non-FastBreak trading systems.
The feature is controlled with new options on the Generic Algorithm screen where you set
trading system goals.