In these experiments a minimum band is found by looking over the past
five trading days. When the stock falls to or below this minimum
point and then turns around, a buy order is generated. As the results
show, the model lost money doing paper trading. There are several
problems. In some cases the stock never hit the low point, so there
was no trading. In other cases the stock did hit the low point, but
the limit order was hit and the stock was sold at a loss. This could
be a result of setting the limit too close to the buy point.
Most of these experiments were done with the "MACD Enhanced" smoothing
function. This funtion has significant lag and this may also be a
reason that the model did not work well.