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How do you define a profitable trading system?

  • #21
  • Jul 12, 2018 1:34pm Jul 12, 2018 1:34pm
It's also about being right at least as often as one needs to be, to keep one's account from going down. And I mean being right.

If R:R = 1:1, one must be right 6 out of 10 times (typical day trade R:R)
If R:R = 1:3, one must be right 1 out of 3 times (typical swing trade R:R)
If R:R = 6:1, one must be right 7 out of 8 times (typical scalping R:R)

---

Being right as often as one need to be + Trader Skills + Trader instinct

I think it's the skills and instinct that makes the difference in performance between traders who are using the exact same trading system.

Most traders do not have the instinct part. You need this instinct to sniff out 'unexpected' crazy price movement that will elude most amateur traders, before the move happens.

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Doing the right thing. As in following one's plan or rules? But then it will still come down to whether the system can generate profitability in the long run.
'For the market to work, it needs people who think that they can beat it.'
  • #22
  • Jul 12, 2018 1:56pm Jul 12, 2018 1:56pm
There are tons of trading systems available around, free or paid. Why is it that there are still so many losing traders?

You can follow a trading system faithfully and still lose money in the long run. Hasn't that occur to anyone?

You can test all you want, try as many trading systems as you want. it's still the same. Losing trades, losing accounts.

---

It is imperative a system/methodology can stand the test of time and various market conditions. MOST trading systems will fail on this criteria alone.

---

Mechanical trading alone won't cut it, (the discipline to follow rules alone I mean). You need that trader instinct / guts / intuition to being able to try the make the best possible trading decision in real time trading. That part simply could not be expressed in the form of any mechanical rules/system.
'For the market to work, it needs people who think that they can beat it.'
  • #23
  • Jul 13, 2018 12:12am Jul 13, 2018 12:12am
Quoting AlastorFate
There are tons of trading systems available around, free or paid. Why is it that there are still so many losing traders? You can follow a trading system faithfully and still lose money in the long run. Hasn't that occur to anyone? You can test all you want, try as many trading systems as you want. it's still the same. Losing trades, losing accounts. --- It is imperative a system/methodology can stand the test of time and various market conditions. MOST trading systems will fail on this criteria alone. --- Mechanical trading alone won't cut it, (the...

So what chart characteristics or fundamental events inform your gut instinct?
  • #24
  • Jul 13, 2018 1:48am Jul 13, 2018 1:48am
Quoting MLeslie
once you predict direction correct EVERYDAY. then you are a trader. dont have to predict every move but the direction of the timeframe you trade you should never get wrong. no excuse. info is out there.
That is literally the dumbest thing I have ever seen written here.
  • #25
  • Jul 13, 2018 3:03am Jul 13, 2018 3:03am
Quoting tomorton
{quote} So what chart characteristics or fundamental events inform your gut instinct?
Most retail traders lose money; most trading systems based on conventional T.A., fail in the long run.

Based on this concept, one can find trading opportunities.
'For the market to work, it needs people who think that they can beat it.'
  • #26
  • Jul 13, 2018 3:56am Jul 13, 2018 3:56am
Quoting Catch-22
{quote} That is literally the dumbest thing I have ever seen written here.
i expect most retailers like you would think that.
  • #27
  • Jul 13, 2018 4:20am Jul 13, 2018 4:20am
Quoting AlastorFate
{quote} Most retail traders lose money; most trading systems based on conventional T.A., fail in the long run. Based on this concept, one can find trading opportunities.

This is true but glib and a poor analysis of what traders believe and what they do.

Losing traders don't fail because they use TA, they fail through using the wrong TA, or abusing it or using it for the wrong trading styles. So, most losing traders -
trade very short-term, in and out within less than an hour: they think its low risk and easy to "scalp" like this
look to trade reversals: they see price rising and they go short
believe indicators: so, when RSI or MACD or CCI say buy, they buy

But what's telling is how winning traders make money. And mostly, they make money through TA.
  • #28
  • Jul 13, 2018 4:21am Jul 13, 2018 4:21am
Quoting AlastorFate
There are tons of trading systems available around, free or paid. Why is it that there are still so many losing traders? You can follow a trading system faithfully and still lose money in the long run. Hasn't that occur to anyone? You can test all you want, try as many trading systems as you want. it's still the same. Losing trades, losing accounts. --- It is imperative a system/methodology can stand the test of time and various market conditions. MOST trading systems will fail on this criteria alone. --- Mechanical trading alone won't cut it, (the...

So what chart characteristics or fundamental events inform your gut instinct?
  • #29
  • Jul 13, 2018 5:26am Jul 13, 2018 5:26am
Quoting MLeslie
{quote} i expect most retailers like you would think that.
If you can slip me the lottery results in your trip 24 hours into the future I would be really grateful.

If you can post directions for 10-20 pairs every day next week I will bow down and call you King Guru of the Universe.

I will wash your feet and humbly ask you for my single no risk trade daily while I compound my account into the trillions of dollars in one year.
  • #30
  • Jul 13, 2018 5:38am Jul 13, 2018 5:38am
Good system;

- good trade open
- tight SL
- good RRR
- good trading management (sl moving, scale out system)

Same results with other broker(s).

All details of the system is finished, no question.
  • #31
  • Jul 13, 2018 6:35am Jul 13, 2018 6:35am
Pullbacks more of them in the trend then trying to catch the cross of a pair.
  • #32
  • Jul 13, 2018 9:55am Jul 13, 2018 9:55am
Quoting Catch-22
{quote} If you can slip me the lottery results in your trip 24 hours into the future I would be really grateful. If you can post directions for 10-20 pairs every day next week I will bow down and call you King Guru of the Universe. I will wash your feet and humbly ask you for my single no risk trade daily while I compound my account into the trillions of dollars in one year.
i could do it for one
theres a lot to it. ill PM you the direftion of eu everyday next week. ok?
  • #33
  • Jul 13, 2018 1:12pm Jul 13, 2018 1:12pm
Quoting tomorton
{quote} This is true but glib and a poor analysis of what traders believe and what they do. Losing traders don't fail because they use TA, they fail through using the wrong TA, or abusing it or using it for the wrong trading styles. So, most losing traders - trade very short-term, in and out within less than an hour: they think its low risk and easy to "scalp" like this look to trade reversals: they see price rising and they go short believe indicators: so, when RSI or MACD or CCI say buy, they buy But what's telling is how winning traders make...
I mentioned 'conventional' T.A.

Technical analysis is simply analysing charts, finding patterns,
and the worst fallacy of all time... is assuming one can predict the future by studying historical chart patterns.

The focus on the market using technical analysis is wrong, and the reason why traders can continue to lose for many years even after studying technical analysis in depth.

You can't make money by analysing the market which is blatantly rigged to make T.A. based system fail in the long run. Technical analysis destroyed itself and whoever believes in it.
'For the market to work, it needs people who think that they can beat it.'
  • #34
  • Jul 13, 2018 2:32pm Jul 13, 2018 2:32pm
Quoting AlastorFate
{quote} I mentioned 'conventional' T.A. Technical analysis is simply analysing charts, finding patterns, and the worst fallacy of all time... is assuming one can predict the future by studying historical chart patterns.
By assuming TA tries to "predict" the future and the fixiation on beeing right, you made your point very clear.

And its fine, TA is certainly not the only way to trade, there are many different ways to be successful.
  • #35
  • Jul 13, 2018 4:33pm Jul 13, 2018 4:33pm
Quoting yalgaar
I have always wanted to be able to define what a "profitable system" is. I have spent good amount of time to think about it since there are infinite ways to make money in Forex and of course lose money as well. I came up with the following list of criteria to be present in a system for me to believe it is a profitable system and what would interest me to invest real money. 1) The system should be back testable. 2) The system should produce similar results when backtested with multiple broker data. 3) The system should be tested on at least last...
Ever heard of the scientific method approach? That what I was aiming for when I created EURJPY breakout system. Many people here at forexfactory can show proof of how profitable it is after they do their own backtest in their own brokers, there isn’t another system like it. Still waiting for someone to develop a better system.
Grind until you no longer have to introduce yourself. 4:30am club
  • #36
  • Jul 15, 2018 12:29pm Jul 15, 2018 12:29pm
Quoting cat
{quote} A very erroneous post if I may say so, and for the benefit of those new or relatively inexperienced, I would like to challenge it. This is of course my opinion. I have traded now for ten years, and I have never known market behaviour change in any fundamental way beyond the normal day to day swing and rhythm of the market. The system I created for my own trading worked in the past once it became part of who I am as a trader, it continues to work, and I do not expect it to suddenly stop working as long as I continue trading. One of the reasons...
I do agree that it is completely nonsense saying that what works now may not work in future. 5 years ago, trader hedges Precious Metals like GOLD, SILVER in between Chinese Market and COMEX and it is still working until today. Of course the result weren't as good as 5 years ago because smart people are all around the globe.
  • #37
  • Jul 15, 2018 1:35pm Jul 15, 2018 1:35pm
'might' and 'may'.

How bad is your English?
'For the market to work, it needs people who think that they can beat it.'
  • #38
  • Jul 15, 2018 2:04pm Jul 15, 2018 2:04pm
Quoting AlastorFate
'might' and 'may'. How bad is your English?
You are on a English Learning forum or trading forum? I'm curious why there are some people who love to shows off their English perfection in a trading forum instead of sharing what they know about trading.
  • #39
  • Jul 15, 2018 2:28pm Jul 15, 2018 2:28pm
Are you too lazy to check the definition of 'may' and 'might'?

If you misrepresent someone's post by ignoring grammar, you are the one who should own it and apologize.

You said that statement of mine is oomplete nonsense. Doesn't that make you look silly?

It is okay to be bad at stuffs. But laziness and unwillingness to own up one's mistakes is unacceptable.
'For the market to work, it needs people who think that they can beat it.'
  • #40
  • Jul 15, 2018 2:32pm Jul 15, 2018 2:32pm
Quoting AlastorFate
Are you too lazy to check the definition of 'may' and 'might'? If you misrepresent someone's post by ignoring grammar, you are the one who should own it and apologize. You said that statement of mine is oomplete nonsense. Doesn't that make you look silly? It is okay to be bad at stuffs. But laziness and unwillingness to own up one's mistakes is unacceptable.
Should I thank you then for correcting my mistakes? Or maybe I should consider to purchase Grammarly before posting here.
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