All Systems lead to Failure?

:clover:I am constantly bombarded by offers for the next new automated system and have even bought a few (only to get a full refund within 30 days).

Am I right to assume that (just like a Premership Manager) it always ends in failure?

As a new trader is there any basic advice about the best way to get started?

Should I focus on learning everything I can about one market over a number of months/years and become an expert in one area only?

A trading system is made up of a trading strategy and the trader. A successful strategy can still produce poor results if the trader fails to perform properly whether through lack of training or psychological limitations.

You need to reflect carefully on where the problem lies. There are many good strategies available, and you can train yourself or get trained to manage them properly.

A really good robust system takes years and lots of investment to develop. No one is going to go through that process only to sell for a few hundred or few thousand pounds.

So most of the stuff out there is garbage.

I don't agree with that.

Firstly, what is YOUR definition of a "good" and "robust" system? If you were shown two trading systems (A and B), which metric or metrics would you use to determine which system was "better"?

You might prefer A, but someone else might prefer B.

You might think B is "garbage", but someone else might think A is "garbage".

What does "garbage" mean anyway? In my experience the starting assumption for most people is the cliched "if it was good, they wouldn't sell it".. but the reality is that people don't actually have a method for distinguishing between systems anyway, so they don't even bother looking.

Actually I had this conversation with someone recently. I showed him two systems, one had a win rate of 40%, one had a win rate of 45%, he opined that the second system was "more robust" because it had a higher winning rate. I then asked him if a system with a 99% win rate was the "most robust" to which he quickly replied "no of course not" (as it implies some kind of Holy Grail system).

So, please tell me your definition of "robust".

I have always worked on the premise that there is no such thing as a trading system. In my opinion,the term system implies a formulated procedure. While this might work for some people, I only incurred failure.

I only began tasting success when I stopped looking at the market systematically.

I subscribe to the view that a large percentage of the "systems" for sale are not going to make you rich. They may certainly show positive performance over select time periods or certain market conditions but if there really is some magic formula that delivers consistently good performance then you're unlikely to find it given away for a few pounds a month.

Having said that, it's not necessarily a bad thing to do what you have a try a few out. It's a great way to learn about the market and why some strategies can work in certain situations and others never will. If you learn from these and then develop your own system then you'll always be looking to improve and refine it and hopefully lead yourself to greater profits. If you buy something off the shelf you are more likely to throw it away when it has a run of losses.

first of all if these people have these winning systems why do they bother selling them for money if there systems can make them so much money?

if you have a system that has good risk managment and uses a simple combination of 2 or 3 indicators and trade it consistently it will work however you must not have this written in stone you will need to make some alterations to the system not change statagy just adapt it to the current market flow. also its best to trade a wide variety of markets that are not related to eachother so there is a good chance your system will be making profits in some of those markets if the risk reward ratio is good the profits should easily absorb the losses in other markets for example 1 year you may find your system made loads of money on the UK100 in 2009 but made no money in 2010. however it made you loads of money on Silver and Gold in 2010 and the risk rewards where high enought to out do the losses on the UK100 that year. so it your system fails in one market for a year but could work well in another market so its best to diversify your intrests in to other markets. So if you keep your hands on one pie then it goes then your finished if you keep your hands on plenty of pies and a few of those go you still have more pies to rely on all good

davidh1819 said:

first of all if these people have these winning systems why do they bother selling them for money if there systems can make them so much money?

if you have a system that has good risk managment and uses a simple combination of 2 or 3 indicators and trade it consistently it will work however you must not have this written in stone you will need to make some alterations to the system not change statagy just adapt it to the current market flow. also its best to trade a wide variety of markets that are not related to eachother so there is a good chance your system will be making profits in some of those markets if the risk reward ratio is good the profits should easily absorb the losses in other markets for example 1 year you may find your system made loads of money on the UK100 in 2009 but made no money in 2010. however it made you loads of money on Silver and Gold in 2010 and the risk rewards where high enought to out do the losses on the UK100 that year. so it your system fails in one market for a year but could work well in another market so its best to diversify your intrests in to other markets. So if you keep your hands on one pie then it goes then your finished if you keep your hands on plenty of pies and a few of those go you still have more pies to rely on all good

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Were you drunk when you wrote this? Aside from the many spelling and grammatical errors, the lack of punctuation makes it almost incomprehensible.

meanreversion said:

Were you drunk when you wrote this? Aside from the many spelling and grammatical errors, the lack of punctuation makes it almost incomprehensible.

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Maybe he was eating pie whilst typing?

amit1986 said:

Maybe he was eating pie whilst typing?

Click to expand...

meanreversion said:

Were you drunk when you wrote this? Aside from the many spelling and grammatical errors, the lack of punctuation makes it almost incomprehensible.

Click to expand...

If you have a system that has good risk management and uses a simple combination of 2or 3 indicators and trade it consistently it will work. However you must not have this written in stone you will need to make some alterations to the system not change strategy just adapt it to the current market flow. Also its best to trade a wide variety of markets that are not related to each-other so there is a good chance your system will be making profits in some of those markets if the risk reward ratio is good the profits should easily absorb the losses in other markets for example 1 year you may find your system made loads of money on the UK100 in 2009 but made no money in 2010. however it made you loads of money on Silver and Gold in 2010 and the risk rewards where high enough to out do the losses on the UK100 that year. so it your system fails in one market for a year but could work well in another market so its best to diversify your interests in to other markets. So if you keep your hands on one pie then it goes then your finished if you keep your hands on plenty of pies and a few of those go you still have more pies to rely on all good.

There you go MR just put my writing through Microsoft Word and corrected it Happy Now?

You may want look through it all with a magnifying glass just in case

amit1986 said:

Maybe he was eating pie whilst typing?

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I wish i was lol

There are still a few errors, its for it's, that kind of thing. Also, the paragraph is too long and lacks punctuation.

I'm not trying to be a smart ****, I genuinely struggled to follow what you were saying and I am sure you do have some valid points .. !

meanreversion said:

There are still a few errors, its for it's, that kind of thing. Also, the paragraph is too long and lacks punctuation.

I'm not trying to be a smart ****, I genuinely struggled to follow what you were saying and I am sure you do have some valid points .. !

Click to expand...

If you have a system that has good risk management and uses a simple combination of 2 or 3 indicators and trade it consistently it will work. However you must not have this written in stone you will need to make some alterations to the system. Not change strategy just adapt it to the current market flow. Also its best to trade a wide variety of markets that are not related to each-other so there is a good chance your system will be making profits in some of those markets, if the risk reward ratio is good the profits should easily absorb the losses in other markets. For example 1 year you may find your system made loads of money on the UK100 in 2009 but made no money in 2010. however it made you loads of money on Silver and Gold in 2010 and the risk rewards where high enough to out do the losses on the UK100 that year. So if your system fails in one market for a year but could work well in another market so it's best to diversify your interests in to other markets. So if you keep your hands on one pie then it goes then your finished if you keep your hands on plenty of pies and a few of those go you still have more pies to rely on all good.


How about now? :smart:

Just love the idea that there's a bunch of whoppers out there who design *systems* for another bunch of whoppers who then try them out for a hundred quid, don't make riches, then 'send them back' asking for a refund...the clever-stupid balance of financial Darwinism circled.

No-one can trade another person's system, it's psychologically impossible.

meanreversion said:

No-one can trade another person's system, it's psychologically impossible.

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very true

Black Swan said:

Just love the idea that there's a bunch of whoppers out there who design *systems* for another bunch of whoppers who then try them out for a hundred quid, don't make riches, then 'send them back' asking for a refund...the clever-stupid balance of financial Darwinism circled.

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There's usually a slight imbalance, resulting in the first set of people retaining part of the sales revenue The stupidity of the second group should not be underestimated !

All Systems lead to Failure?
A system's just a vehicle to get you to your objective. Like a car. So this is no more true than saying all cars lead to crashes. It all depends on setting out in the right vehicle, learning to maintain and drive it correctly and then keeping on the road.