All Systems lead to Failure?

[Hotch]

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

I disagree with this (I know there are a lot of you arguing this point).

If it's purely mechanical, then plenty of people can stick to rules and trade it, I don't buy this crap that people aren't capable of following basic rules. Hell, head over to FF, plenty of robots have been programmed to follow systems and plenty of them are profitable.

If the "system" is just a bunch of vague statements like "buy dips in an uptrend", then of course others can't trade your "system", because it's not a system, it's just some BS you've come up with to pretend you have a plan which makes you feel more secure than admitting that you're just winging it really.

 

[meanreversion]

I disagree with this (I know there are a lot of you arguing this point).

If it's purely mechanical, then plenty of people can stick to rules and trade it, I don't buy this crap that people aren't capable of following basic rules. Hell, head over to FF, plenty of robots have been programmed to follow systems and plenty of them are profitable.

If the "system" is just a bunch of vague statements like "buy dips in an uptrend", then of course others can't trade your "system", because it's not a system, it's just some BS you've come up with to pretend you have a plan which makes you feel more secure than admitting that you're just winging it really.

Sorry, I'm going to disagree (and I'm referring to purely mechanical systems). People who design their own purely mechanical systems find them hard enough to follow. I reckon if you gave a "profitable" system to 100 traders which then went into drawdown straight away, 95 of them would almost immediately change certain aspects. If the drawdown continued, the other 5 would not be far behind.

But what do I know.. here it is from someone else, who is far wealthier than I

"I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline." - Richard Dennis

 

[Black Swan]

Sorry, I'm going to disagree (and I'm referring to purely mechanical systems). People who design their own purely mechanical systems find them hard enough to follow. I reckon if you gave a "profitable" system to 100 traders which then went into drawdown straight away, 95 of them would almost immediately change certain aspects. If the drawdown continued, the other 5 would not be far behind.

But what do I know.. here it is from someone else, who is far wealthier than I

"I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline." - Richard Dennis

Right on bro., iirc he cited the WSJ as the paper..

 

[oiltanker]

so why did most of the turtles fail?

 

[Hotch]

Sorry, I'm going to disagree (and I'm referring to purely mechanical systems). People who design their own purely mechanical systems find them hard enough to follow. I reckon if you gave a "profitable" system to 100 traders which then went into drawdown straight away, 95 of them would almost immediately change certain aspects. If the drawdown continued, the other 5 would not be far behind.

But what do I know.. here it is from someone else, who is far wealthier than I

"I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline." - Richard Dennis

I'm aware of the quote. Consistency and discipline has nothing to do with following another's system. Either you are disciplined and can follow any system, or you're not and can't follow any.

 

[Rossini]

I think you both have a point. Either one currently has discipline, and can follow a system. Or one lacks the discipline and therefore is unlikely to follow the system.

However, you have to give yourself the best chance possible. Building your own system around your preferences, ideas, and understanding is one way of making sure that you have sufficient discipline (understanding and suitability) to trade and follow it.

 

[meanreversion]

Nice pic of Rooney's favourite hotel. There's a boy who probably couldn't follow a trading system.

 

[meanreversion]

so why did most of the turtles fail?

Is this true? And if so, is it because THEY didn't follow the rules?

 

[Black Swan]

Nice pic of Rooney's favourite hotel. There's a boy who probably couldn't follow a trading system.

LOL, I'll bet you he fookin could, and because he's got a winner's mentality he'd 5hit on just about all of us matey..

 

[meanreversion]

It was a reference to lack of discipline, not mental agility. Sheesh! So touchy ..

 

[HowardCohodas]

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.

All living leads to death.

Another of Howard's random cliches.

 

[meanreversion]

All living leads to death.

Huh??

 

[meanreversion]

Howard, are you on strike on your trading journal?

 

[HowardCohodas]

Howard, are you on strike on your trading journal?

I was in a committee meeting from 9:30 AM to 2:30 PM today. Endless discussion, numbed brain. I answered some of your posts, among others, and then . I'm now reengaging, as fighter pilots call it.

 

[meanreversion]

Well I'll throw you a big juicy bone. If you want me to leave your journal and never return (i.e. stop asking questions), simply refuse to answer the most recent question which I posted on the journal and I'll promise to leave.

 

[Black Swan]

It was a reference to lack of discipline, not mental agility. Sheesh! So touchy ..

Really? Oh..OK..

 

[meanreversion]

He's fat, he scores, he sleeps with lots of whores could be changed to

He's fat, he drools, he follows all the rules ?

 

[Rossini]

MR; you're defiantly on something I'm not...

 

[HowardCohodas]

Well I'll throw you a big juicy bone. If you want me to leave your journal and never return (i.e. stop asking questions), simply refuse to answer the most recent question which I posted on the journal and I'll promise to leave.

Apparently you missed my post right before yours in this thread. I'll give you a by for the moment.

Besides, not having you in the thread would make it so much less interesting. I would not like that.

 

[amit1986]

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

Not 100% sure if I agree with this. I understand why you would say this, but I think the condition you are imposing is too strong. Perhaps a weaker condition, such as, if the system fits your psychological style, then it is possible to trade it even if it is someone else's system.

An example: When I started out trading U.S. stocks, I thought the only way I could ever succeed was by trading a purely mechanical system. So I experimented with eSignal's Advanced GET system. This system plotted a regression line on a trend, surrounded by two 5% confidence intervals. The concept was simple: if a candle closed outside of a confidence interval, it would initiate a trade. I took two trades with the system and both were profitable. After that, I never touched it again. Not because I was scared but because having studied statistics and finance extensively in university, I knew there was no way this system could work. The very assumptions of the regression model never held in financial markets. So, whilst I was able to follow the rules to a tee, my mind was simply telling me that I was getting lucky. So, psychologically, I could not handle the system. I then looked for other mechanical systems, but I just could not believe any of them could give me an edge over the long-run.

At that point, I decided that non-mechanical trading systems suit my personality. Then I started using another person's system of tape reading and after some practice, I started getting a hang of things. I felt comfortable with this way of trading, even though it was much tougher than simply following a set of chart rules.

So, in both situations, the trading systems are not mine, but I've found one that I am able to accept psychologically.

That's why I don't think you can outright dismiss the potential of trading someone else's system, but you've got to find one that suits your personality.