Clemmo's Trading Odyssey

update December 2022:
It'll be six 6.5 years in June since I started my journey. It hasn't always been easy, but it's always been interesting.
What have I achieved since I started?

1. I've built about 14 30+ trading robots, 9 5 (the truth hurts! and I expect this number to decrease) of which seem to be long-term profitable. I spend most of my hours running tests these days.
2. I've also written a handful of indicators but I find them to be mostly decorative.
3. I've started working with an actually talented coder on this site to produce some new ones, hopefully the best yet. I like this creative aspect of trading and I like collaborating for a change.
4. I've written well over 200 systems now, and hopefully the latest one, which I'm calling 'Elastic', will be the best one yet in the sense of having the best risk to reward balance. And although I enjoy the intellectual exercise, I hope it will be my last one (for a while) so I can focus on building something that's a little less self-serving and more helpful to the community. hahaha. Oh boy.
5. The book club thread is nearing 40 50 pages and we've nearly covered a couple dozen 35 books. I hope to keep doing that, and to pick up the pace a little once we get past the (perpetual) requests for technical analysis books, which by their nature make claims that have to be investigated.
6. I've reduced increased my personal trading philosophy to 4 7 core beliefs - which you can find on the book club thread, and basically (so far) I think the rest of the market is noisy randomness, and for the retail trader, a little bit of unfair competition, something which the entire system depends on in order to exist. If markets were predictable or forecastable for any length of time or to any tolerable precision the whole thing would just implode.
7. Every system and trader needs to be able to handle chaos and be antifragile, a term that's a bit overused, but still brilliant (Taleb).

What are my plans for the future?

1. I'm thinking about starting a signals or 'called trade' service. Something that's backed up by more than just empty promises, where I put some of my own skin in the game instead of just sitting back and collecting a fee rain or shine. I might put that out on YouTube. I don't want to use MQL5.com for a variety of reasons. Nah. Nobody cares.
2. I might also start selling some of the robots, if I can work out a way to do it that's fair to me and to the buyer.
3. My vision for 'forexrobotsclub' is still just a vision, but maybe some day I can make it a reality

I hope that the world and my health can hold together long enough to do this for another six years. I'd be happy to do it for another sixty.

Thanks for reading my thread, and I wish you consistent profitability.
Clem

updated June 2020:

I've been studying and paper live trading for almost two years four years pretty much to the day. It's been a wild ride!

I've written nearly a hundred two hundred systems, some of which work great, others OK, others not at all. I've come to the conclusion that systems might be too limiting to deal with the almost infinite variations that the real marketplace can throw at you. Actually, maybe not. Either way though, it gets easier with thousands of hours of practice.

I think know I've made some progress. I'm mostly playing with house money these days.

I can look back at my notes and paper journal and see how much I've learned in a relatively short time.
If nothing else I've learned a lot in four years - definitely a college education equivalent - statistics, probability (Bayesian and conditional), corrected some of the deficiencies in my math education, learned a lot about finance, market microstructure, fundamental analysis, technical analysis, cyclical analysis and its relative un-importance, the importance of automation, C, MQL, expert advisor programming, risk management, scaling, back-testing and its relative unimportance, frames of reference, the compounding paradox, protrusion zones, relative extrema, the treachery of periodic indicators, and trends, trading psychology and its unimportance, contrarianism, its importance and limits, holistic analysis and its limits, zoom error, timeframe paradoxes, mean reversion, trade frequency, punctuated equilibrium, the treachery of quantitative methods, the reason neural nets don't work, fractal capital allocation, etc.

The most important thing I've learned so far is to take my own notes, create my own data sets, theories, concepts and then test, test, test everything. Details matter. Discard what isn't clearly helpful. Hold on to the rest, as that's my edge.

In order to get better at winning you need to get better at losing.

I would be curious to know what some of the more experienced traders think about this statement.

I was playing a game of StarcraftII with my children who are probably a bit young to be playing a 'T'-rated game, but they're keen on it. Of course I have years of experience playing games, especially real-time strategy games so in our first match I won easily. There were tears.

"How silly!", I thought. To cry over a game, and to cry about losing one's first game, against an experienced opponent, when there was little hope of winning. I tried to console them, but instead was greeted with hostility. I decided to give them some space and stopped playing.

Later, I put the finishing touches on a system I've been working on for the past few weeks. I back-tested it. I simulated trading it. I paper traded it and it worked so well I decided to trade it on a live account.

On the very first trade I incurred a loss. Not the biggest I've ever sustained but big enough to sting, and especially since I had high hopes for this system that has a high win rate. I brooded about this for a while, looking for something to take my frustrations out on.

Then it occurred to me I was doing the same thing my kids had done. I was 'crying' about losing. Something that is inevitable, and especially inevitable while learning. In fact, as long as I'm being philosophical. Losing is part of life. We inevitably get old, lose our youth, our friends, family, and finally our life. Surely the best 'winners' in life are the ones who can best handle losing?

I felt a bit sheepish about my childish thought pattern and I made a choice to shake off the 'sting' of losing that trade. Now I'm looking forward to continuing my live test. Maybe there's something I've overlooked. Maybe I can learn something from the loss. However it's the way I reacted to this loss that could be a game-changer.

If I treat every loss as the cost of trading, and the cost of education, instead of letting it interfere with my mood and deter me from something that could be a long-term winner, then that's the "real" win. Not a profit, but a long-term beneficial viewpoint.

A little addendum to that last thought.

There are a lot of clever people on FF. Many have a deep mathematical background and use very sophisticated techniques to analyze data and to trade. I admire them, but I also suspect many of them are not very successful and it's precisely because they haven't internalized the above lesson. They still fear losses, and are unduly affected by them, especially because they are cleverer than most.

I've noticed it's not always the most intelligent people who trade best.

Of course I admire traders who can program a bot to do their trading and leave their emotions out of the equation entirely, but even then I'm sure the journey to get to that point required a fair amount of grit and 'shaking off' feelings of loss and uncertainty. After all, if you're smart enough to code a successful expert, you're smart enough to do something else with your time; why put up with risk?

Good read cleemmo. I think intelligence plays the biggest role, as in any business.

However we have to remove the "interference" which is EGO. how? we must admit our mistakes.

doesn't happen immediately, but after so many "I'm wrong... I was wrong"
"wrong wrong wrong"



the bastard will be forced to go away.

When I started out, in my early days on FF I had a few fanciful notions and you can read them in my posting history. For example, thinking that if I can combine the right indicators I can develop a purely mechanical system that will be mostly foolproof. What I believe now is that you need to know what is within the realm of possibility/accuracy and what isn't. A lot of traders, smart and dumb, get in trouble because they think they know more than it's possible to know.

My favorite trading quotes (off the top of my head) are not by traders but by scientists.

- Richard Feynman
- Albert Einstein
- Richard Feynman

Yup, Feynman gets 2/3. He was that smart. He's also right about yourself being the easiest to fool. Why? Because, like everyone, you have an undue respect for your own ideas (choice-supportive bias, inherent overconfidence, Dunning-Kruger) and choices.

Smart people think that the smarter they are, the more likely their ideas will be successful, but actually it just means that their ideas are harder to prove wrong. The smarter you are, the more complex, sophisticated and opaque your ideas can be, which is not necessarily any guarantee of success. In fact it can be a hindrance and make it harder to 'fail faster' because it takes longer to move past a false conclusion. Some of the best traders use 'dumb' approaches. "This works, so I'll keep doing it and this doesn't so I'll stop."

I used to focus on backtesting and system optimization. Now I'm more interested in risk management. Along that line I'm working on something I'm calling a 'variance table'. Basically it's a guide as to the statistical price amount (%) and time that a given trade in a given instrument can turn against you.

Think about treading water. If I throw you into the middle of the ocean and tell you to tread water for 15 minutes it's not an issue, probably, as long as you know how to swim, and are reasonably fit. By the end of the fifteen minutes your muscles are maybe sore and you might be cold, but then I throw you a ladder and it's fine, at least as far as survival. It probably didn't do our friendship any good.

Now imagine I do the same thing but I don't tell you how long you've got before I pull you back in. After a couple of minutes you'll probably start to panic. You'll think about how long you're physically capable of treading water. What happens when you stop (you'll drown). Whether there are sharks in the water. How you can try to find land. No strategy besides treading water and floating as much as possible is going to do you any good. Attempts at other strategies are a waste of energy and will lead you to drowning faster. You'll exhaust yourself mentally, and physically, much faster than if you have a boundary pre-set for you.

That's what the variance table is meant to do. It tells you how long and how bad you're going to suffer during a trade given a set of parameters. If you suffer less than the table says you might, you'll stay in the trade and profit. If you end up suffering more than is 'normal' then it's a sign to get out.

I've blown a couple of accounts; probably lost more than $10,000 USD learning how to trade but I see it as tuition for an education.

Now I have 3 trade explorers that are showing a consistent profit and I'll soon be able to add a fourth.

The next step is to take those demo trade explorers and turn them into real accounts. In the meantime I haven't stopped learning. I still read about one book on finance every few days. I make up new systems and new demos to test those systems, but I'm slowing down in terms of new systems created. I prefer to focus on what works and get better at trading it.

This was a tough week for my discretionary systems as they are both down significantly from last month. On the one hand I was probably too busy working on other things (like the variance table) and didn't put enough effort into them. On the other hand I allowed a big floating loss to accumulate in my 'swing for the fences' account. Without a better set of guiding principles, those discretionary accounts may be doomed over the long run. They are both still up for the year though.

The automated system is doing a bang up job of recovering the account that I put it on. I had to intervene at one point and manually bail it out during the Euro/Italy crisis. It was trying to add more bad trades to its backlog but had run out of margin. So it's smart, but not THAT smart, which is a good way to think of any robot, no matter how sophisticated. Put it in charge of making and closing trades, but leave the thinking to the front office. During the recovery I only made a few heavyweight trades against the Euro, and when they showed a profit I used them to remove some of the worst underwater trades. When account equity was back to 150% I let it resume on its own. It managed to clear up the rest of its backlog (thanks to the Euro snapback) and end the week with a profit which is not bad for a grid-rider, I think. I know that I'm trading too many instruments on not enough capital for this bot but I want to know its limits. Full props to Magix for coding this beauty. I don't know if he wants more participants in his thread so I'll leave it unlinked for now.

The fractals strategy continues to outperform and is on track to double the account in 100 days (100% in 100 days) although I'm not sure if I can clear the floating backlog before the end of next week, if US dollar strength keeps up it might be possible. I also have a couple ideas about how to optimize this strategy but I'll proceed slowly, open up separate demos for each tweak, to keep the data sets independent.

I got a kind note from a reader and I thought I'd share my response since it helped me clarify what I think I'm doing at the moment.

My first advice would be to get advice from someone with more experience!

However I recognize your struggle and so the second piece of advice is that the system is almost secondary to consistency.

I've seen good traders win with bad systems and bad traders lose with good systems. The difference is good traders always do the same thing. They are, maybe by nature, boring but reliable.

This is different from systems creators who are by nature, creative and interesting. Look at how popular threads about new systems are (for a few weeks anyway) and how little people care about old threads with systems that just work. Even my terrible system (polyjuice) thread gets more views than my bio post which is actually (maybe) useful.

So, the first hurdle is to find or make a system (better to make or modify an existing one because what you make yourself is better known to you) that probably works.

Second hurdle is to learn to trust that system (I'm in that phase).

Third phase is to trade the system without alteration and without fear for as long as it's profitable. I would guess the last step is to learn how to know when that system no longer works or is worth replacing.

Veteran traders who have been at this for a while often trade multiple systems simultaneously for different market types but even on demo I can see that's going to be difficult for me.

Note that I'm mostly trading demo right now and my live accounts haven't done well in the past because I was very inconsistent. So, I can't tell you how to become consistent (apart from trading bots and I haven't found one that can be trusted) except it's probably about practice.

KISS is a good example of an OK system that some people trade very consistently and it works for them. In practice it has many horrible problems (big drawdowns, uncertainties when a trend has ended) but as long as you just trade it the same way, without fear, it should work since trends are definitely real and if you ride them that's a hard edge. KISS can be traded very consistently because it is so simple. The more complex a system is the harder it is to be consistent, unless it's automated.

One thing I'm working on is a 'secret' project I'm calling a variance table that divides the market up into cycles and then generates stats about the variation in each of those cycles. This might (if it works) give a trader a very clear idea of how far the market could move against them over a given period of time. I believe that if I were prepared with that knowledge (knowing the likely worst case scenario) then I'd stay in good trades longer and exit bad trades faster. I'd be able to place my stops optimally as I'd only get stopped out when the market makes a statistically unlikely maneuver.

I hope that was helpful. Clem.

Goal achieved. I don't think I'll be able to keep it above %100 next week but 1%/day average is good enough for me at this stage.

Hah - as soon I let my guard down for one minute all hell is guaranteed to break loose. Euro meltdown before G7 and the account takes the biggest hits of its young life. Lesson? Not sure there is one. The bigger you trade, the bigger your drawdowns will be, I guess. Also the market hates a winner.

Experimenting with a larger lot size for my usual trades and it has (expectedly) resulted in some volatility in my equity curve. Not sure if I should just go back to what it was, as I was making better progress then, or if the market is just in a turnaround phase.

This has also highlighted a problem with my system - inadequate loss prevention. Since I make most of my trades once or twice a day and then check up on things when I wake up and I don't use a trade manager, it's possible to lose my shirt in a single trade, as I nearly did when USD/TRY went nuts.

I have an idea for adding a max loss rule but that would change the system and demands a new demo test.

I had to close out another TE experiment today. It was going strong but crashed and burned when Gold wouldn't stop falling. So far the only successful systems I've found have been the ones that I've created on my own. Is it because I'm a genius and everyone else is dumb? No!

A personal system is simply easier to trade. It will be better understood than someone else's system, EA or trading philosophy. Everyone must approach trading in their own way, which is why even if your trading coach, guru, or mentor isn't a fraud it's likely they will not be able to teach you how to trade. What a pity and how I wish I could get back all the hours I've wasted following other people's advice.

A Mystery

I've been neglecting my demos and focusing on my real accounts. So far things are going according to plan which is satisfying. It's also a bit rote and dull. I wanted to try an experiment, so I decided to see how my performance compared to 'experts' like the analysts over at FXStreet.

I've always been skeptical of the traditional fundamental and technical analysis offered for free on websites like FXStreet and MyFXBook. They mostly seem like a generic content feed of low value analysis peppered with ads to brokers, not all of them with stellar reputations.

FXStreet has an interesting feature though, where a stable of analysts make their predictions at the start of the year and forecast where the price of certain securities will be in 3 months, 6 months and one year. The complete list is here. https://www.fxstreet.com/rates-charts/forecast

If you click the details of any particular forecast you'll often get a more detailed report that gives a table of analysts along with their forecasts.
Here's an example.
https://www.fxstreet.com/analysis/eu...r-201701131459

The poll predictions were all made in 2017. Since that year is over it's now possible to see exactly how precise the forecasts were. I made a spreadsheet of the analysis and highlighted the most accurate predictions. You can find that spreadsheet here. https://docs.google.com/spreadsheets...it?usp=sharing

As you can see most of the predictions are hopeless. As Yogi Berra (maybe) said, 'prediction is hard. Especially about the future.' Going against the crowd is not a bad strategy overall, not just with retail traders, apparently. These are people (presumably) paid to write for FXStreet. The fact that barely 10% of them have a method for determining when a trend is due to end is just...sad? Mindblowing?

There are however some standouts that I've highlighted in green. Immediately you'll start to see the same names come up. Special mention is deserved for Valeria Bednarik and Yohay Elam who are often present among the best forecasts. I guess that's why their articles are often prominently featured on the FXStreet site.

It's also interesting to note just how bad the predictions for USDJPY were compared to the other securities. If there's a reason for that I'd be curious to know but I have no theories at the moment.

One name that continually shows up for every poll isn't a person but a signals service - Growth Aces. Their performance for forecasting the future prices of securities in 2017 was so good that I was motivated to try to find out more about this outfit.

Sadly, they don't seem to be publishing on FXStreet anymore, but I did find a website that still operates. I won't post the link but you can easily guess the URL based on the name. At least I assume they are the same people, but when I signed up and checked on the performance of their past predictions (which they don't make easily available but anyone with a smattering of HTML knowledge will easily be able to find it because it's all served up client-side) they were abysmal. In fact, they are not a bad reverse indicator. Even stranger is that they post their win/losses in pips and USD, and even though they don't keep a running tally or account balance, it's not hard to add up the failures using their own accounting; I didn't even have to backtest their trades.

In 2018 alone, a $10,000 investment following GA's signals would lose approximately $3,612, or more than 1/3 of the account value. Win rate well below 50% and average loss exceeding average gain. I checked the signals going back to 2016, and the market reports going back to 2018 before I gave up the cause as lost. I didn't make a spreadsheet of my tally, but if anyone needs confirmation or doubts my arithmetic, let me know and I can make one. Suffice to say unless you do plan to reinforce your own forecasts with a reverse indicator, it's not worth pursuing. Definitely save your money.

So my question is - what happened!?

How could someone or some group who made such excellent predictions in 2017 deliver daily signals that were so inferior? Is it the same group? Is it something worse than incompetence, maybe an attempt to deliberately trade against the followers of this service?? If it isn't a scam how could you do this day in, day out, without feeling like you were scamming people or at the very least, like you were bad, really bad, at your job? Is it automated? How long do people subscribe (i.e. fall for) this junk before cancelling? So many questions.

In the end, the lesson is (as always) caveat emptor and do your own research; trade your own system. You can't trust anyone in this game, except yourself, and even then, don't trust too much.

I've been too busy inventing systems and destroying logical fallacies to post much but I keep finding great quotes that are applicable to trading, ironically outside of the world(s) of Finance.


More than ever I believe traders lose not just because of what they don't know but because of what they do "know" that serves mostly as a brace against the slings and shocks of uncertainty/probability. A constant cannot substitute for X when X is a random value and be correct more than once in a blue moon.

To become a better trader don't hunt for new systems; learn statistics and probabilisitic methodologies like econometrics. Or if you can't help but hunt for new systems find 'dumb' systems that don't try to shirk the random nature of markets, but rather embrace it and win despite randomness.

I just got this message from my favorite broker.


Skrill, Neteller, UPay, etc. all charge about 5-6% in fees, both for deposits and withdrawals. That's %12 round-trip, a fair annual return!!
So unless you're trading a micro-account that shit's off the table. NO WAY.

Trading is hard enough without having to play brokerage roulette. Who's left who will take Canadians? Global Prime? Blueberry Markets??? The ranks of reliable brokers seems to be thinning.

what the hell ? That's an amazing performance ! good job.

From GM Ben Finegold - some advice about chess that probably sums up why a lot of retail traders lose. They are looking for an algorithm that will let them win against a deceptively complex and adaptive system that can defeat them multiple ways.

A new thing I'm trying.
EU W1
P-J Intercepts test