There's some old saying about how love supposedly finds you when you're not really looking for it. I'm starting to think that the same can be said about system development. When I first began this adventure, I had my own dreams about the Holy Grail (who doesn't?). I also had this machismo idea that I had to develop my own personal system. Someone as brilliant and amazing as me couldn't be lowered to using some else's system! I had to be an innovator, a creator, an inventor.
After months of staring at charts and watching my money drift away, I had finally thrown in the towel. I was starting to sift through everyone else's systems. Granted, even when you adopt someone else's system you ultimately end up personalizing it and making it your own, but it's still different than developing something from scratch. If you've been reading my previous posts, you know that I have spent the majority of my time specifically attacking the fozzy method.
In the last week I have been involved in extensive backtesting of the fozzy method. Specifically, I have been trying to nail down the exact application of SLs, TPs, and position sizing that is necessary to optimize the fozzy. But a funny thing happened on the way to the forum...
This weekend, as I sifted through trade, after trade, after trade, I started noticing patterns. I was seeing these patterns on my fozzy charts, but they weren't specifically related to the fozzy method. In fact, I stripped off some of the fozzy stuff and added a few more things and embarked on a long weekend of extensive testing. With my newfound ability to test every potential trade to a high degree of accuracy, I was able to confirm this new method with a load of empirical data.
The funny thing is that I wasn't honestly looking for a new system. Last week I was profitable with my fozzy trades - to the tune of a 12% increase in account value. I was really just trying to optimize the fozzy method. But instead I ended up uncovering something that is, at least for me, even better than fozzy.
I also found that taking the time to do tremendously-accurate backtesting has a wonderful effect - confidence. After simulating thousands of past trades, I actually placed my first System X trades last night.
I'm calling this "System X" for two reasons. First, it is truly a complete system. The system I stumbled across doesn't just say, "Trade when X condition occurs." Rather, I now have a method for determining entries, SLs, TPs, and position sizing.
Second, I'm going to leave this as "System X" because I'm not yet ready to reveal this system in a public forum. I need to do more testing and I need to figure out exactly what I want to do with it long term.
After months of staring at charts and watching my money drift away, I had finally thrown in the towel. I was starting to sift through everyone else's systems. Granted, even when you adopt someone else's system you ultimately end up personalizing it and making it your own, but it's still different than developing something from scratch. If you've been reading my previous posts, you know that I have spent the majority of my time specifically attacking the fozzy method.
In the last week I have been involved in extensive backtesting of the fozzy method. Specifically, I have been trying to nail down the exact application of SLs, TPs, and position sizing that is necessary to optimize the fozzy. But a funny thing happened on the way to the forum...
This weekend, as I sifted through trade, after trade, after trade, I started noticing patterns. I was seeing these patterns on my fozzy charts, but they weren't specifically related to the fozzy method. In fact, I stripped off some of the fozzy stuff and added a few more things and embarked on a long weekend of extensive testing. With my newfound ability to test every potential trade to a high degree of accuracy, I was able to confirm this new method with a load of empirical data.
The funny thing is that I wasn't honestly looking for a new system. Last week I was profitable with my fozzy trades - to the tune of a 12% increase in account value. I was really just trying to optimize the fozzy method. But instead I ended up uncovering something that is, at least for me, even better than fozzy.
I also found that taking the time to do tremendously-accurate backtesting has a wonderful effect - confidence. After simulating thousands of past trades, I actually placed my first System X trades last night.
I'm calling this "System X" for two reasons. First, it is truly a complete system. The system I stumbled across doesn't just say, "Trade when X condition occurs." Rather, I now have a method for determining entries, SLs, TPs, and position sizing.
Second, I'm going to leave this as "System X" because I'm not yet ready to reveal this system in a public forum. I need to do more testing and I need to figure out exactly what I want to do with it long term.