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Is opposite of losing strategy a winning strategy?

  • Post #1
  • Quote
  • First Post: Feb 24, 2017 8:10am Feb 24, 2017 8:10am
So I have been trading for a long time since it is my passion. I have lost good amount of money several years back which was a very good learning lesson about risk and money management.

Since a reasonably long time I have tried so many things in the Forex market, I can't even count. Since last few days I have this question that really makes me wonder and wanted to ask it here. So here it goes...

If I have a strategy that is consistently losing each single day by 150-300 pips. If I test this for 30 days...it loses that kind of pips each and every single day. My question is what if I reverse this strategy? I mean I will buy instead of sell and sell instead of buy. I will also do a TP instead of SL and will do SL instead of TP. In theory I believe it should make profits of 150-300 pips. But something inside me tells me I will still lose! :-) But not sure why and how? Time permitting I am going to experiment this myself and share my results here but I still wanted thoughts from members here and get some more food for thoughts.
your intuition is correct. this thing simply does not work this way. reversing a losing strategy, usually ends up in having an extra losing strategy. reverse it, and you will now have two losing strategies...

if you want to make it in forex, examine the many reasons why your strategy fails? why exactly? examine the loses. losses are everything. in losses lays your personal forex holy grail. there's the rabbit hole - in losses....
IQ 69 (was 75). World's No.1 Stupid Hobby Trader!
Quoting yalgaar
But not sure why and how?
This topic has been discussed many times before.
FWIW I attempted to provide some possible reasons here and here.
If you're losing 150-300 pips per day, it's probably more than just the transaction costs? Perhaps you need to consider statistical fluctuation.
Quoting hanover
{quote} This topic has been discussed many times before. FWIW I attempted to provide some possible reasons here and here. If you're losing 150-300 pips per day, it's probably more than just the transaction costs? Perhaps you need to consider statistical fluctuation.
All very interesting reads!! Thank you very much to point me to these posts.

Regards
Quoting MoneyZilla
your intuition is correct. this thing simply does not work this way. reversing a losing strategy, usually ends up in having an extra losing strategy. reverse it, and you will now have two losing strategies... if you want to make it in forex, examine the many reasons why your strategy fails? why exactly? examine the loses. losses are everything. in losses lays your personal forex holy grail. there's the rabbit hole - in losses....
Money Zilla,

As you already know I respect you a lot. I stopped the discussion on Ghost Bikers thread because you said so....

I have been reading your posts. You don't fool me at all.... Behind that wilful sarcasm, I know there is a man of tremendous wisdom.....

" examine the loses. losses are everything. in losses lays your personal forex holy grail. there's the rabbit hole - in losses.... "

Please drop some wisdom on your above lines...May be share an experience on the practical application....

Thanks
  • Post #6
  • Quote
  • Edited at 12:49am Feb 25, 2017 12:25am | Edited at 12:49am
Quoting aaven
{quote} Please drop some wisdom on your above lines...May be share an experience on the practical application....
I am very lucky to be in a communication with a super good sniper kind of trader. He pretends to be a retail trader. I have the feeling he is a pro. I know from him that he is the only one guy who can trade his (magic) levels.

For example, Mr. 90s I call him, is sharing at FF his own levels. He is one of the best real retail traders I know about. These successful retail guys are little over than a few, actually. Noone here really benefits from Mr. 90s levels, because of the same reason... They simply cant handle it (the way he does).

On the top of that, I have shared everything with my cousin. If he was not my cousin I would have abandoned all ways of communication with that person. It is impossible to endure his character for that long. He always tries to break walls with his head. Not the best approach imo. He is a slow thinker. Low quality, too. But I like him. He's my cousin. He does not get it, at all, what I am explaining to him. I was angry. Very angry. Now this thing amuses me big time. I even afford myself giving him all EAs. He just does not have an idea what to do with them.

On the other side, out of one of my EAs, he builded up not a bad hybrid system. But he always tries to fight the markets. For that I put him into the stupid traders group. He is making over 50% per month recently. Feb17 he made 65%. Trading 10k demo accounts. I will give him real money next week. I will manage his profits, so when the D-day comes (that is inevitable when you fight the rate), it won't matter. We still be profitable.

I do preffer my 10% with the market, versus his 50-60% against it. Plus when you are with the market, one can make 50-100% a day with low to no dd at all. My cousin is nowhere near that. So, I only work over that kind of scenarious and will make it. I am close, yet not there yet, but I am sure I will. Soon.

My best entries? D1 breakouts. This is my personal holy grail. I just run my EAs exactly on the D1 BO lines. At a touch and I am all in! These are the levels where you can brake all rules for money fucking stupid management.

All you have to do now, Aaven, is to figure out the flips that do follow after that. And you will have a winning system, that does not fight the rate... It will be profitable. But how profitable? This will depends on the quality of your thiking...

One last thing. Thinking is EXACTLY like money. Quantity is Money's best Quality...
IQ 69 (was 75). World's No.1 Stupid Hobby Trader!
Quoting MoneyZilla
{quote} I am very lucky to be in a communication with a super good sniper kind of trader. He pretends to be a retail trader. I have the feeling he is a pro. I know from him that he is the only one guy who can trade his (magic) levels. For example, Mr. 90s I call him, is sharing at FF his own levels. He is one of the best real retail traders I know about. These successful retail guys are little over than a few, actually. Noone here really benefits from Mr. 90s levels, because of the same reason......
Thanks a lot Money Zilla for the sharing your insights. I also read a psot of your's where you slogged for years staying in an abandoned apartment and the pain you endured. Bravo Man....
Reverse a losing strategy, it sounds good theoretically but in practice you will bug your mind so badly. Lets say you reverse and start losing what would you do then, reverse again? This is like a mind trap. I would suggest you just find the strategy that is winning and improve it and stick to it.
This is just all about contradiction why because it's all bias on the way of the approach - so we do have to think about the not like this , we must have to be discipline in our thinking else we can't have the success
Well, reversing a loosing strategy and not knowing the real reasons why it is not working in the first place, most probably will lead to even more disastrous results and as somebody mentioned above, it will bug your mind.
Is opposite of losing strategy a winning strategy? Usually no.

BUT, It could be a winning strategy ONLY IF the negative mathematical expectation per trade is AT LEAST 2 TIMES LARGER than the cost of trading.
(cost = spread + commissions + slippage + swaps)
Over 99% of all losing systems have expectation = 0 (before cost). So reversing the rules makes no sense.
------------------------------------------------------------------------------------
By the way, many years ago this is how I found some of the most profitable setups in my strategy.
When I first started trading, I was consistent loser like most traders.
However I constantly analyze my trades in order to find out why my results are so bad, and I noticed that on some technical patterns I tend to lose a lot more compared to other patterns.
Turned out that over 80% of my losses came from 2 particular setups. Combined they produced average negative expectation per trade - 5 pips.
So by simply reversing these trades I started to earn +3 pips per trade on the same patterns.
Up to this day, these patterns are the most consistent thing I have ever found.
Although today they do not appear as often as they did in the past, the expectation per trade is still around +3 pips.
Quoting alphaomega
Is opposite of losing strategy a winning strategy? Usually no. BUT, It could be a winning strategy ONLY IF the negative mathematical expectation per trade is AT LEAST 2 TIMES LARGER than the cost of trading. (cost = spread + commissions + slippage + swaps) Over 99% of all losing systems have expectation = 0 (before cost). So reversing the rules makes no sense. ------------------------------------------------------------------------------------ By the way, many years ago this is how I found some of the most profitable setups in my strategy. When...

Interesting alphaomega... mind sharing what the patterns are, or how frequent do they occur? How long have they lasted (# of years)?
Quoting Javforex
{quote} Interesting alphaomega... mind sharing what the patterns are, or how frequent do they occur? How long have they lasted (# of years)?
The patterns are mathematical (time-price-volatility) relationships very hard to explain to outside people who are not familiar with my trading methods..
The patterns are not visible on standard charts, so you need special software to detect them in real time.
The patterns occur almost daily. In some days there are more than 20 good setups in the major fx pairs.
However, the opportunity to execute the trade usually last for only a few seconds up to 1-2 min. max. I have to be absolutely glued to the monitors during the trading session hoping that something good will pop up.

Normally I trade for 4-5 hours almost every day.
2 hours in the morning local time (London open/Asian close) and 2-3 hours in the afternoon where Europe and US time zones overlap.
---
How long the patterns have lasted (# of years)?
Many years. (more than 10, many even 20). As I said, they are very consistent. (but not easy to trade).
I have been trying to automate my strategy for years, but so far, no success. Too many variables and unknowns.....
So for now manual discretionary trading is still best for me.
I think it can fail but only because of the spread. if the reason the original fails is because of the spread then it could suffer same results in reverse. What happens in backtest?
I once fell into the habit of cutting my winners short for fear of losing what gains I had at that precise moment but being completely fine with letting my losers run away. it seemed at the time that no matter what I did, I lost. What complete idiocy.
strategy is that which should be maximized, because with a good strategy would be good also in the running trading well, with it always to try to run the trading by learning as in ademo account or demo contest in the stage of improving trading skills with the hope to be obtained
If I have a strategy:

SL 10pips
Target 20 pips

After backtesting, 30% win ratio( 3x20 -7x10 = -10 per 10 trades)

If I do the reverse(long become short), and SL 20pips, target 10pips

Will it be profitable?
Quoting alphacat
If I have a strategy: SL 10pips Target 20 pips After backtesting, 30% win ratio( 3x20 -7x10 = -10 per 10 trades) If I do the reverse(long become short), and SL 20pips, target 10pips Will it be profitable?
yes you will, till it fails. and trust me it will. currency trading is not sequencing. with it being the barest of asset classes, anything and everything will rock the boat. you'll spend your entire life figuring out the sequence and still die poor. in layman's term, currency trading is more on probability there and then, odds are everchanging unlike a horse race/casino where there are fixed times when odds change
to be a winner in forex business it should be able to learn in the science and also the ability to trade, and better able to understand the risks inherent in forex to be in minimize well, In the forex business that depends on having knowledge is not her each trader to be able to successfully obtain a consistent profit to be obtained
I have an EA that losses everyday if EURUSD cost 4.5 pips per transaction (strategy tester was used on weekends). It makes me think that if I'm a broker, I will certainly profit from it. I wonder if a coder can tinker a strategy and make the transaction cost be on the trader's favor instead of the broker.
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