Back testing is one of the vital functions in developing an effective trading system. This process provided us an opportunity to evaluate and fine tune the Waverley Research algorithm, to build confidence in our strategy and determine if our approach has the potential to be profitable in exceptional, as well as normal, market conditions.
We conducted extensive back testing by taking historical data and reconstructing trades from the past using the rules of our algorithm. The goal was to verify that our strategy is dynamic enough to be successful in all markets. While these tests were conducted in the present, the buy and sell decisions are based solely on data that was contemporary for the time period and a historically accurate stock universe.
The results of our back testing process are presented in the charts below. As these charts reveal, the Waverley Research algorithm and strategy is a reliable and robust trading system, can generate extraordinary total returns and can outperform the Dow Jones Industrial Average over the long term.
After registering as a member of WaverleyResearch.com, subscribers are entitled to the daily Waverley Research Selections, as well as, all the Waverley Research Selections since inception. This allows our subscribers to evaluate and test for themselves, our approach, utilizing a wide variety of circumstances and trading situations to determine if our strategy as outlined is likely to be successful.
* Simulated trading.