This is great for getting a large
sample size of trades in a very small space of time.
Remember, it's your results over a large
sample size of trades that matters.
A major problem with this theory is that
the sample size of trading days is small (5), compared with the January barometer (typically about 20 — which is also not a large sample size), to be a reliable predictor of the rest of the year.
Not exact matches
If you remain disciplined and stick to your
trading plan over a large enough
trade sample size, you should come out on top in the end,
of course that is assuming you are using an effective
trading method like my price action strategies.
The primary limitation being that many ETFs have a
trading history
of less than five years so the
sampling size is small.
If it can be shown that the RCS algorithm works better for a smaller range
of tree ring ages, could one consider the
trade off
of expanded CIs by looking at smaller
sample sizes by extracting older (younger) tree rings.