Annotated Models
This site is best viewed in a browser that conforms to web standards.
NeuroStrategy has a hard time with NYSE:BSX. We are showing you this strategy model in order to give you further clues for selecting strategy models that work in practice. Boston Scientific illustrates the importance of considering in detail both the period of training and the period of production when making an evaluation.
The performance in production is good. The system achieves an almost linear development of the investment at a considerable return. Nevertheless, we would not use such a model productively under any circumstances. This decision is best explained in terms of the course of the equity curve during training. It is craggy and in three places exhibits phases of loss lasting up to six months. This occurs - mind you - during the period where the system was allowed to learn. NeuroStrategy was evidently not able to extract sufficient information from the time series in order to manage a uniform development of equity. During the training period, of course, there are also extended phases of outstanding strategic action. And in 2000, which was no longer available as a basis for training, the model also performed well. As investors, however, we must assume that sooner or later the stock will again enter a phase in which technically assisted trading is no longer viable - as in 1995 and 1998, for example.
Looking merely at the chart for the period of production, we have no reason to be skeptical. Only a look at the training performance and the historical performance in combination reveals that the stock undergoes phases of unpredictable changes, which can constitute a danger.
An analysis of the signal charts underscores the danger. Full positions are preferred. The system obviously failed to find clues in the data, on the basis of which it could have developed a more clever risk management.
With or without transaction fees: following this analysis, BSX should not be managed with the help ofNeuroStrategy. The stock is less suited for technically assisted trading than NYSE:AMAT or NYSE:AAPL, for example.