RIP Mechanical Trading Systems?

meanreversion said:
Hotch did NOT say he had found the Holy Grail, because he knows it does not exist. Your response is a pure straw man argument, namely incorrectly exaggerating something said by the other person in order to disparage it. It's quite a common tactic in children.

Anyway.. let's look at what you said again. You do not believe EAs work in the long run. Why not? Have you researched them? Would you care to explain how systematic trend funds have made good coin for the last four years? What WOULD an ideal return be for you?
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I have said 'why not' - because of market dynamics - you need to read what has been written, before picking arguments.

I
 
x4x said:
I have said 'why not' - because of market dynamics - you need to read what has been written, before picking arguments.

I
Click to expand...

You don't trade, do you? You can't answer the simple question "what annual return would you like to see".

In addition, you claim that "EAs don't work in the long run" without specifying any parameters. You have done zero research to back up this claim, and you ignore the many successful systematic hedge funds out there (and a couple of posters on this thread who do make money using EAs).

Try reading a few trading books before making yourself look daft in this way.
 
meanreversion said:
right, you're the only person who has put a figure on drawdown.

or the drawdown they anticipate/could tolerate.

So, i wonder, maybe a good portion of traders simply have no idea what they are targeting, or what they expect on the downside? A bit like flying blind, isn't it?
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15-20%
 
The amount of guff on t2w has gone exponential this year, or maybe it was always like that.

It's staggering that someone feels the need to make the statement that "EAs don't work", and then is unable to offer a single scrap of evidence to back it up AND is unable to articulate a desirable annual return on account.
 
Hi,

I am new to this forum but not new to trading. My dad has been trading for years now and has develpoed some good automatic systems. I read some of the posts on here and am just a little confused about some peoples returns.

Some of you on here make some good comments and souind very experienced and good traders. When i read comments about you guys only making a return of about 30- 40% per year its different to what i have been shown.

For example, if you have a ten $10,000 account and you trade 1 lot of say GBPUSD, on average a week you manage to be up by 200 pips, I assume that would give a return of $2000 a week. That would take you well over the 100% per year.

Is this not how you guys look at it ? Are you aiming for more ? Or are you just not getting the pips ?

Sorry to sound like a total noob. But I only know what i have been shown so far .
 
Moneymagic said:
Hi,

I am new to this forum but not new to trading. My dad has been trading for years now and has develpoed some good automatic systems. I read some of the posts on here and am just a little confused about some peoples returns.

Some of you on here make some good comments and souind very experienced and good traders. When i read comments about you guys only making a return of about 30- 40% per year its different to what i have been shown.

For example, if you have a ten $10,000 account and you trade 1 lot of say GBPUSD, on average a week you manage to be up by 200 pips, I assume that would give a return of $2000 a week. That would take you well over the 100% per year.

Is this not how you guys look at it ? Are you aiming for more ? Or are you just not getting the pips ?

Sorry to sound like a total noob. But I only know what i have been shown so far .
Click to expand...

Everyone has different methods and preferences. But imagine for example that you have a $100,000 account, and you make 30% a year. You trade infrequently, and experience low drawdowns because you are highly selective (of course, you could make more if you were less so and willing to endure greater variance). As it is, trading is very low stress and really quite pleasant, and doesn't have much of an impact on your life.

Compound that up over 10 years. If that's not good enough for you I would recommend you try organised crime or drug smuggling.
 
Someone also wrote on here that if you had developed a perfect system, it would then be discovered and stop working. I dont get this? How can it be discovered ?

I was talking with my father discussing automated systems. I never really understood why physicists and rocket scientists were employed to program for the big banks. He explained that markets are multi-dimensional and most people cannot think this way and that programming a good strategy is not so much about computer power but more about being able to think multi-dimension , this helps in creating the structure for this.

At this stage I have no idea what he means by this.

I can see the benefit of trading with a large sum and the 30% being far easier with it than with $10,000. The bigger account can handle more of a draw down. I know this is not the way to think but i have been in a trade sometimes and the market goes too far down for me to stay in and lose my money, i get out and then it goes back up. If I had a bit more money then that pressure would be off.
 
Moneymagic, care to define what you mean by "perfect" system? Does this mean 100% win rate, or something else?

Incidentally, it seems to me I could mention return as a function of drawdown until I am blue in the face, but no-one pays the slightest bit of attention.

System A returns 80% a year with 40% drawdown.

System B returns 40% a year with 10% drawdown.

System A must be better because the percentage return is higher, right?
 
It's a bit like this

I earn $100,000 a year working 50 hours a week.

I earn $50,000 a year working 10 hours a week.

I'd much rather be working 50 hours a week and earning $100,000, right?
 
Moneymagic said:
I can see the benefit of trading with a large sum and the 30% being far easier with it than with $10,000. The bigger account can handle more of a draw down. I know this is not the way to think but i have been in a trade sometimes and the market goes too far down for me to stay in and lose my money, i get out and then it goes back up. If I had a bit more money then that pressure would be off.
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The problem you mentioned about being forced to close your trades before they work may be connected to your risk management and trade planning - not the account size. You can avoid it by planning your trades - before entry one should know the place for the stop and the target and adjust the stake accordingly.

Nowadays it is possible to trade with small stakes, so the account size shouldn't be a problem. Put it simply - if a trader is not very successful with a small account, they would only lose more money if they opened a big account.
 
bedsit said:
Nowadays it is possible to trade with small stakes, so the account size shouldn't be a problem. Put it simply - if a trader is not very successful with a small account, they would only lose more money if they opened a big account.
Click to expand...

There is some kind of bias amongst traders that makes them believe trading with a larger pot and aiming for the same % return is somehow easier.
 
meanreversion said:
Moneymagic, care to define what you mean by "perfect" system? Does this mean 100% win rate, or something else?

Incidentally, it seems to me I could mention return as a function of drawdown until I am blue in the face, but no-one pays the slightest bit of attention.

System A returns 80% a year with 40% drawdown.

System B returns 40% a year with 10% drawdown.

System A must be better because the percentage return is higher, right?
Click to expand...

I don't actually know, it was something I picked up in an earlier post, someone mentioned that all systems fail and this is one of the reasons, that the system would eventually be discovered and then stop working.

My questions is how would it be discovered? If it can be discovered then why can they not discover what already exists in the market, which is the market itself? I am assuming this if someone discovered a system that actually tracked the entire market.

But to me a perfect system would be one that has 90% plus success rate, the losers are small but fall within the rules, losses only because of volatilty or lack of. Should be producing atleast 50 pips daily.

That would be great. :)
 
Well, there is another poster on t2w called Howard Cohodas who has a system with a 90%+ win rate and a daily return in excess of 50 pips. His losers have been fairly small as well, so far. He sells low probability option structures and aims to collect the premium.
 
Black Swan said:
One concept is fun money, the other feels like real money?
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Mebbe. I read somewhere that it's not so much the case that we have biases, it's that the biases have us.

You can't control them and the impact they have on your emotions, any more than you can control your heartbeat.
 
meanreversion said:
Well, there is another poster on t2w called Howard Cohodas who has a system with a 90%+ win rate and a daily return in excess of 50 pips. His losers have been fairly small as well, so far. He sells low probability option structures and aims to collect the premium.
Click to expand...

wow...that is very encouraging. It can be done.

Well done Howard(y)
 
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