All trading systems fail

[bedsit]

Why does it make it difficult for Ta? TA is a graphical representation of price, if boj is buying $ this will be seen in the chart as a downward trend for the yen.

TA does not drive price, it just makes it easier to see where its been to allow us to come to a decision as to where it might go, followed by where we should jump on board and where we should put our stops.

Sometimes in developing a rule set for entering trades based on ta we get confused and think that that the market should conform with our rule set/TA.

We forget to look at our set ups in context to what is going on in the market, in effect we lose sight of the bigger TA picture.

For example if I trade off support resistance with sound TA and a good rule set I'd still be daft to be buying the yen at previous support levels.

Ramble over

I do use TA all the time for my trading decisions and keep record of the trades. Not long ago wouldn't be difficult to make 10% a week. All that changed for the last 5-6 weeks where I've managed to break even or make a small profit each week. I haven't changed my system, so would think there must be something to do with the current market condition (choppy intra day moves).

PS As a day trader I hardly pay attention to anything higher than 4h charts, so the bigger TA picture (daily, weekly etc.) doesn't help me that much.

 

[Black Swan]

Why does it make it difficult for Ta? TA is a graphical representation of price, if boj is buying $ this will be seen in the chart as a downward trend for the yen.

TA does not drive price, it just makes it easier to see where its been to allow us to come to a decision as to where it might go, followed by where we should jump on board and where we should put our stops.

Sometimes in developing a rule set for entering trades based on ta we get confused and think that that the market should conform with our rule set/TA.

We forget to look at our set ups in context to what is going on in the market, in effect we lose sight of the bigger TA picture.

For example if I trade off support resistance with sound TA and a good rule set I'd still be daft to be buying the yen at previous support levels.

Ramble over

Tthese legendary trading maths geniuses must have been wasting their time with their propietary inventions, despite the fact that there are indicators that flag up price action just as well as bars, candles and intuition/interpretation ...

P.S. how are you Vaco, everything alright?

 

[meanreversion]

The point about adding additional systems for purposes of diversification is one I would agree with.. but 44... yes well at that point you're probably paying 10% of your equity in commission each month.

ODT, you really have it sussed. I urge you to quickly contact the new owner of Liverpool FC, JWHenry, who originally made his vast fortune trading a system, and let him know that all systems fail in the end.

By the way, if by "most purchased systems fail" means that the majority of punters who purchase systems online end up losing money, that is almost certainly true.. NOT because the system is "crap" (every dog has its day, even a "crap" system will sometimes make money), but because when the system hits drawdown, which it will inevitably do, the user has no confidence in the system to stick with it. They'll modify parameters and skip signals - THIS is what leads to the ultimate loss of money.

 

[wackypete2]

tomorton,

You brought up diverification of systems is ok and I'm saying it's not. Now you're saying diversification means something else so therefore I'm wrong? Make up your mind.

ODT' makes an interesting and logical point with regards his 44 systems. This is diversification of systems, rather than the traditional diversification of assets and asset classes but it makes just as much sense as a means of diluting risk.

You know that's a false argument. Diversification involves reducing your investment in any single instrument such that, even if one suffers a 100% loss, your remaining holdings will keep you financially viable.

---------------------------------

Can't see the point of this debate.

Agreed.


Peter

 

[wackypete2]

One more point....If you are buying systems and you want to diversify that's one thing because they are all prepackaged. But if you spend $1 million to create you own systems and then have to diversify them, that makes no sense. Just code 1 system that takes all 44 of them into account.

Peter

 

[oildaytrader]

You know that's a false argument. Diversification involves reducing your investment in any single instrument such that, even if one suffers a 100% loss, your remaining holdings will keep you financially viable. Of course, if ODT is using 44 different systems that all act in the same manner, such that all 44 could crash at the same moment, that would not be true diversification, but I can't believe that he makes such an elementary error.

Trading strategies include opening range breakout systems, trending strategies using custom indicators , trend continuation , trend failure, momentum , reversal ,breakouts and contrarian etc.

The method of selection to close strategies is different on each strategy. The several exit methods include an exit manager, close on time, target profit, trailing stop, move to breakeven, unique stop loss ,profit manager etc

The method of selection for entry is based on triggers from approximately 10 custom indicators, price behavior , volatility etc

There are 44 different trading systems and all 44 systems could be opening positions at the same time, each system is left to run automatically without human intervention.

 

[oildaytrader]

My 44 systems combined have a sharp ratio of 2.66 , based on 9.5 years of backtesting.It can improve to over 3 in direct market and better execution.

To give you some insight, a ratio of 1 or better is considered good, 2 and better is very good, and 3 and better is considered excellent.

http://www.investopedia.com/articles/07/sharpe_ratio.asp

 

[oildaytrader]

The point about adding additional systems for purposes of diversification is one I would agree with.. but 44... yes well at that point you're probably paying 10% of your equity in commission each month.

Your point is not valid.I would normally trade 2 lots at a time on a single system,instead I use 44 systems which will take on 20 trades average @0.1 lots = 2 lots in total.There is no difference between trading 2 lots or an average of 20 positions of 0.1 lot, the commission is the same.

If I was to offer these 44 systems through a broker , and you did not have to pay any additional spreads for using it , would you turn it down?It has a sharp ratio 0f 2.66 and backtests show profitability for 9.5 years.

In comparison other system sellers /renters do not give any meaningful historical information.

http://www.collective2.com/cgi-perl/intro.mpl?mediaid=c2kyw&gclid=CObv6Z2r2aQCFSL92AodFXFZKw

http://www.zulutrade.com/?ref=135568&Lang=en&gclid=CMuh8rGr2aQCFYxH4wodLVwYLA

http://www.tradency.com/en/homepage.aspx

 

[meanreversion]

I would probably click on one of those links if I actually believed you trade.

 

[jsc]

Trading strategies include opening range breakout systems, trending strategies using custom indicators , trend continuation , trend failure, momentum , reversal ,breakouts and contrarian etc.

The method of selection to close strategies is different on each strategy. The several exit methods include an exit manager, close on time, target profit, trailing stop, move to breakeven, unique stop loss ,profit manager etc

The method of selection for entry is based on triggers from approximately 10 custom indicators, price behavior , volatility etc

There are 44 different trading systems and all 44 systems could be opening positions at the same time, each system is left to run automatically without human intervention.

What absolute nonsense. Why on earth would every indicator be on a different system? You also seem to have ommitted some of the most obvious such as range, beta, volume break-out and money flow. You are simply plucking terms out of the air - trailing stop, move to breakeven - thats the same thing isn't it? Unique stop loss - does it have its own special badge and a beret? Do you mean a guaranteed stop? Trend continuation, trend failure - seems to me there's a common theme in those two 'comparisons'. Are those on different systems too? Close on time - what time? Your time? Market close? Shall we pick a time, say 15.20?

The trouble with people who talk nonsense and try to get themselves taken seriously is that they inevitably run into somebody who actually is the type of person that they profess to be...The idea you have written 44 different black box strategies is the most ludicrous thing I have ever heard, let alone the idea that you run them all simultanously. Firstly, one black box system could cost in excess of £50 mill...let alone the programming involved. In addition, if you only employ ten custom indicators, why do you need 44 systems to run them on?

I agree with a previous poster. Replying is a futile exercise.

 

[oildaytrader]

What absolute nonsense. Why on earth would every indicator be on a different system? You also seem to have ommitted some of the most obvious such as range, beta, volume break-out and money flow. You are simply plucking terms out of the air - trailing stop, move to breakeven - thats the same thing isn't it? Unique stop loss - does it have its own special badge and a beret? Do you mean a guaranteed stop? Trend continuation, trend failure - seems to me there's a common theme in those two 'comparisons'. Are those on different systems too? Close on time - what time? Your time? Market close? Shall we pick a time, say 15.20?

The trouble with people who talk nonsense and try to get themselves taken seriously is that they inevitably run into somebody who actually is the type of person that they profess to be...The idea you have written 44 different black box strategies is the most ludicrous thing I have ever heard, let alone the idea that you run them all simultanously. Firstly, one black box system could cost in excess of £50 mill...let alone the programming involved. In addition, if you only employ ten custom indicators, why do you need 44 systems to run them on?

I agree with a previous poster. Replying is a futile exercise.

Empty cans make dour sound.

 

[SanMiguel]

Market conditions cant change that much though, can they?
If someone traded an instrument intraday over a period of, say, 12 months, wouldn't they have traded in all kinds of environments? flat days, choppy days, trend days, news days etc.
How much can a market change?
If someone in the above situation was profitable, id find it hard to believe that 'market conditions' would change enough in the future to ruin their methodology. Price just goes up and down.

Quite an understatement!
Just look at how things have changed since 2007-8, look at how correlated the stock market is to the movements of the $ whereas it wasn't always.

 

[meanreversion]

I started a thread once, Design a BAD trading system. If everyone is so convinced that most of the systems available for sale on the web are "bad" (whatever that means), then let's design a "bad" system. Once we know it's rubbish and consistently unprofitable, it's surely child's play to then start doing the opposite and thence design a "good" system, which is consistently profitable.

As always, the devil is in the details. Define "consistent". If my system loses 3% a month for 10 months then does +50% in each of the last two months, is that a "good" or "bad" system? It's certainly profitable, but is it "consistent"?

How about a system that makes 5% a month for 23 months then loses 70% in the 24th month? Is that any good? No-one here really defines their metric for determining a "good" or "bad" system.. frankly it's just a load of words bandied around with very few people knowing what they're talking about..

 

[Naz]

will support and resistance stop working?

Yes, it will become blurred.

 

[bedsit]

I use 44 systems simultaneously , if some systems are failing the rest of the systems make money, they make money .

It is difficult to operate 44 systems if you are a manual trader.

The insightful part is multiple systems complementing each other don't always fail .

ODT,
I would stick to demo trading if I were you. Obviously you read about trading, but it seems you're a bit confused so wouldn't be good for you to start trading with real money.
Best wishes.

 

[oildaytrader]

ODT,
I would stick to demo trading if I were you. Obviously you read about trading, but it seems you're a bit confused so wouldn't be good for you to start trading with real money.
Best wishes.

In a game where 95% of traders fail ,and 95 % of system scammers make money , it is good advice for you since you are the one who appears confused.

 

[bedsit]

In a game where 95% of traders fail ,and 95 % of system scammers make money , it is good advice for you since you are the one who appears confused.

I may have doubts sometimes, but no confusion. As I do day trading for living I'll stick to it and see how it goes.

You can do demo trading or start with really small stakes (only if you forget about 44 systems). No offence intended, but what you posted is cloud-cuckoo-land.

 

[oildaytrader]

I may have doubts sometimes, but no confusion. As I do day trading for living I'll stick to it and see how it goes.

You can do demo trading or start with really small stakes (only if you forget about 44 systems). No offence intended, but what you posted is cloud-cuckoo-land.

http://www.trade2win.com/boards/general-trading-chat/105956-95-myth.html

The statistics and facts are 95% of single system traders and discretionary traders , are actually living in cloud cuckoo land.

My 44 systems are already trading live accounts with a small stake.

 

[bedsit]

http://www.trade2win.com/boards/general-trading-chat/105956-95-myth.html

The statistics and facts are 95% of single system traders and discretionary traders , are actually living in cloud cuckoo land.

My 44 systems are already trading live accounts with a small stake.

Just trying to help. If you think that's the right way for you - good luck.

 

[forker]

http://www.trade2win.com/boards/general-trading-chat/105956-95-myth.html

The statistics and facts are 95% of single system traders and discretionary traders , are actually living in cloud cuckoo land.

My 44 systems are already trading live accounts with a small stake.

44 systems?????

i find that kind of odd, on one hand there is the 95% of systems that fail and on the other you have 44 running