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has anyone EVER seen a successful trader/trading system?

  • #861
  • Oct 22, 2019 8:33am Oct 22, 2019 8:33am
Quoting ZenNy
{quote} ok...you post make sense and I have little knowledge in the field... but you also have to consider that no machine can compare with my creativity... my rules are based on my creativity and my creativity has more adaptability then a machine, machine needs to be coded (correct me if I am wrong) where I also can bend my rules to adapt to the actual imminent changes of the conditions, I can also rely on my gut feeling which I use often always combined by my rules.
Well, this is a logical problem. Because if you constantly change the rules of your strategy based on your "creativity" and "feelings" then the question is - Do you really have any rules? What kind of strategy is that?

If you constantly add new, untested and unproven rules into your system then you essentially create randomness. How do you know that the new rules will lead to positive outcome? This is not how profitable trading works!

The only way to find real edge in trading is through statistical analysis! Backtesting and Forward testing.

The standard process goes like this:

1. You come up with some idea! Maybe you spotted some repeating pattern or whatever.....
2. You define the pattern with maximum precision.
3. You build different rules based on the pattern properties in attempt to extract positive expectancy.
4. You test the rules with historical data to see if they work.
5. You optimize the parameters of the rules to find what works best under different conditions.
6. After all testing is complete, and if you found positive expectancy then you can try the model in real time to see if it works the same way with live data.

It's a long process!

But all of these steps from 1 to 6 can be automated! It's possible to create a robot to write it's own code and to search for patterns on it's own. It's just very difficult. There are some paid applications which can do all of this, but they are still quite primitive. StrategyQuant is one such example.
  • #862
  • Oct 22, 2019 8:35am Oct 22, 2019 8:35am
Quoting ZenNy
{quote} ok...your post make sense and I have little knowledge in the field... but you also have to consider that no machine can compare with my creativity... my rules are based on my creativity and my creativity have more adaptability then a machine, machine needs to be coded (correct me if I am wrong) where I also can bend my rules to adapt to the actual imminent changes of the conditions, I can also rely on my gut feeling which I use often always confined by my rules.
EA's can make a lot of money when they only hit 55% win rate, or even less. Everything can be automatic but in many cases, you are right to say they could never adapt to current market conditions like a manual trader. But this does not make a difference.

But can a manual trader trade 55 charts at the same time, 24 hours a day.

The Algo can perform this task easily so wins through sheer number of trades opened even thought the entry's may be lousy.
Here's one that is a lousy strategy, but makes 25% profit a month. No manual trader could do this or would even try.
It opens a buy and reversal trade at the same time and cuts the loser after x amount of pips. It shouldn't work but the theory is based on trading against breakouts. As more are fake than real, this EA makes money.

Somehow in 500 trades since 8th Setember, its made 16,000 pips and lost just 6,000 pips.
Attached Image (click to enlarge)
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Trading thin liquidity at the boundary of the charts
  • #863
  • Oct 22, 2019 8:55am Oct 22, 2019 8:55am
Quoting RickM
{quote} EA's can make a lot of money when they only hit 55% win rate, or even less. Everything can be automatic but in many cases, you are right to say they could never adapt to current market conditions like a manual trader. But this does not make a difference. But can a manual trader trade 55 charts at the same time, 24 hours a day. The Algo can perform this task easily so wins through sheer number of trades opened even thought the entry's may be lousy. Here's one that is a lousy strategy, but makes 25% profit a month. No manual trader could do...
Sorry but this strategy does not work.

Also the logic does not make any sense! Instead of opening 2 trades (a hedge) and cutting the loss after X, why don't you simply open 1 trade by waiting for the outcome after the initial signal? Basically the price level at which you cut the loss is the price level at which you have to open the trade. This is your real signal.
  • #864
  • Oct 22, 2019 9:12am Oct 22, 2019 9:12am
Quoting alphaomega
{quote} Sorry but this strategy does not work. Also the logic does not make any sense! Instead of opening 2 trades (a hedge) and cutting the loss after X, why don't you simply open 1 trade by waiting for the outcome after the initial signal? Basically the price level at which you cut the loss is the price level at which you have to open the trade. This is your real signal.
Hi Alphaomega

There is 250 lines of code in this EA and I haven't gone into enough detail for you to make that assumption.
It uses three different size trades depending on the level it opens its first trade. Side A which opens a reversal trade against any breakout increases its size two times, Side B hedges itself against a pullback using only one size trade. Win rate is only 59%, profit factor 2.55, average trade win 20.6 pips.


Bottom line is you can design many strategy's on a EA that shouldn't work but they do. Of course any EA I get to a live chart has been through 6-12 months testing and Demo chart trading.

I have said it before, 90% of Manual traders should fail, 90% of EA traders should win
Trading thin liquidity at the boundary of the charts
  • #865
  • Oct 22, 2019 9:24am Oct 22, 2019 9:24am
Are we all drivers? (do we drive a car?)
Can we all do this?

Inserted Video




And now, could that be automated?
  • #866
  • Edited 9:46am Oct 22, 2019 9:31am | Edited 9:46am
Quoting alphaomega
{quote} I understand your view. But some of your assumptions are incorrect, probably because you don't have enough knowledge in the field. First of all, Everything can be automated! The discretionary elements are based on objects and conditions that you observe and interpret. It does not matter if you do this consciously or subconsciously. Everything in trading is based on pattern recognition. The patterns are mathematical models with different complexity. The most complicated patterns include combination of technical and fundamental inputs. The...

I agree that everything can be automated... The challenge is usually in the complexity of it, like automating driving for example, which is a regular activity anyone can perform and yet they are still working on it after decades and billions of dollars.. I am not saying it takes billions and years to automate a strategy, just that some might be WAY more difficult to do than others.
  • #867
  • Oct 22, 2019 9:35am Oct 22, 2019 9:35am
Quoting papamax
{quote} I agree that everything can be automated... The challenge is usually in the complexity of it, like automating driving for example, which is a regular activity anyone can perform and yet they are still working on it after decades and billions of dollars.. I am not saying it takes billions and years to automate a strategy, just that some might be WAY more difficult to do then others.
Agree with you

Space shuttles had the entry on to the atmosfer automated, so it is not impossible, but when something that is not coded occurs then shit happens
  • #868
  • Oct 22, 2019 9:36am Oct 22, 2019 9:36am
Quoting RickM
{quote} Hi Alphaomega There is 250 lines of code in this EA and I haven't gone into enough detail for you to make that assumption. It uses three different size trades depending on the level it opens its first trade. Side A which opens a reversal trade against any breakout increases its size two times, Side B hedges itself against a pullback using only one size trade. Win rate is only 59%, profit factor 2.55, average trade win 20.6 pips. Bottom line is you can design many strategy's on a EA that shouldn't work but they do. Of course any EA I get...
interesting concept.

I get what you mean by the complex logic after opening two trades at the same time.

It makes coding simpler; by opening the two opposing side; and let the EA manage the trades.

A while back I did a similar EA; but trades in a simulated environment (stealth positions). A second EA trades the net position with the broker. Basically it checks every second what the first EA's net position is; and sync it with the broker.

this way you save yourself some spreads and commissions.
  • #869
  • Oct 22, 2019 9:39am Oct 22, 2019 9:39am
Quoting Casiopea
Are we all drivers? (do we drive a car?) Can we all do this? https://youtu.be/Nwgf3m1n6DU And now, could that be automated?
Exactly.... It is very hard to automate the sensibility aspect of anything....

There isn't anyone who can do anything exactly like somebody else, if there is i would like someone to prove it.... No runners run the same way, no fighters fight the same way, no drivers drive the same way, or with the same level of accuracy, there is always the subjective factor.... same is true for trading.... The best drivers in the world make mistakes, they don't get it right everyday or every lap... But they surely get it right more often than not, because they read the patterns of the track, the feedback of the car with consistency and better than most people.... Saying that noone can have a subjective trading system that wins more than it loses is silly for the same reason, if the "driver" can judge the subjectivity well more often than not he is a winner.
  • #870
  • Oct 22, 2019 11:28am Oct 22, 2019 11:28am
Quoting alphaomega
{quote}The only way to find real edge in trading is through statistical analysis! Backtesting and Forward testing.
alphaomega came up with the core of it it here. Although I would question the need of forward testings, because markets constantly evolve/change. So having a statistical "proof" out of your backtesting, a forward test does not improve your chances of having an attractive system any further as the system could stop working anytime - either within the timeframe of your forward test or shortly after. It could even reduce the effective time you are able to use the system in a profitable way. Hope everyone is getting what I mean.

It might sound simple, but nearly everybody is backtesting completely wrong and in consequence gets artificial results far from the real situation.

- use real (paid) tickdata including variable spreads
- make sure to have a slippage simulation applied, either random values or based on a delayed execution.
- apply conditions much(!) worse than you would face under real conditions to have a solid benchmark for your strategy on a backtest.

Thats it!

Use forward tests only for a technical check. Beyond that it is a waste of time.

And always consider a good "chance" is the best you will get. No guarantees.. but it is possible! Cheers to Hudi.
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  • #871
  • Oct 22, 2019 11:34am Oct 22, 2019 11:34am
Simulations and robots are failing us every day. They don't posses the "human factor" just yet.
Check the video below, it's based on a well known true story.


Inserted Video


At the moment, society is light years away from AI with free will or an AI capable of immitating human factor. I am certainly not denying this possibility in the future, but as it is now, I hardly believe human factor can be coded into an EA today.

We are bonded by our DNA, and until we will be able to fully understand our DNA code and it's capabilities, we won't be able to create "ourselfs" regards to trading.
AI can emulate human/trader being in a general sense but the human body and intelligence is by far very complex. No matter how quick AI will develop yet the capacity to behave like a human will always be paradoxical. And here in between lies the human factor. The ability to adapt, change, reevaluate. The reason that we can't do that right now, depends on our current understanding of the brain and maybe the state of current technological equipment.

I think there is no reason to believe that we can't figure out our own code in the future, but it won't be anytime soon.
The biggest risk is not taking a risk.
  • #872
  • Oct 22, 2019 12:51pm Oct 22, 2019 12:51pm
Quoting Rennaissance
Well what I can take from this is that successful forex traders don't exist. Atleast not in this forum. Cause since this thread was posted all people do is talk. The originator of the thread has his answer I guess.
Yes, you are right. But it's very rare that people take lesson and don't waste their dear lives. Most people tend to think that me and people like me are a bunch of losers with IQs under 30!

But, as you mentioned beautifully, FOREX IS A LOSING GAME.
If you can't measure it, you can't improve it!
  • #873
  • Oct 22, 2019 1:05pm Oct 22, 2019 1:05pm
Quoting RickM
{quote} EA's can make a lot of money when they only hit 55% win rate, or even less. Everything can be automatic but in many cases, you are right to say they could never adapt to current market conditions like a manual trader. But this does not make a difference. But can a manual trader trade 55 charts at the same time, 24 hours a day. The Algo can perform this task easily so wins through sheer number of trades opened even thought the entry's may be lousy. Here's one that is a lousy strategy, but makes 25% profit a month. No manual trader could do...
Oh man, believe me. Opening multiple positions on the same chart is mathematically a comedy show (sorry, but I had to find s way to emphasise the matter)

Multiple positions = one single NET position with an initial loss/profit. For example:

Two lots sell at 1.2535 + one lot buy at 1.2555 = one lot sell with an initial loss of 20 pips.

Doesn't matter how complicated you think your system is, it always comes down to what I just explained: one single NET position with an initial loss/profit
If you can't measure it, you can't improve it!
  • #874
  • Edited 3:57pm Oct 22, 2019 2:14pm | Edited 3:57pm
...
my IQ is big big ... and I can't do it ... so nobody can ...
successful forex traders don't exist ...
it's impossible to win ...
...
That's the way ... stats say there are less than 5 % that don't lose money, I say there are less than 2% that actually make some money ...
so yes, it's very very hard ... the best way is to throw the towel and get out before it's too late ...
...
GET OUT OF THE WATER
Don't swim with the sharks ...
  • #875
  • Oct 22, 2019 2:18pm Oct 22, 2019 2:18pm
Quoting lcast
... my IQ is big big ... and I can't do it ... so nobody can ... successful forex traders don't exist ... it's impossible to win ... ... That's the way ... stats say there are less than 5 % that don't lose money, I say there are less than 2% that actually make some money ... ... so yes, it's very very hard ... the best way is to throw the towel and get out before it's too late ... ... GET OUT OF THE WATER
Those who think it's impossible, just doesn't know how.
Only an idiot knows with certainty to where the market is going.
  • #876
  • Oct 22, 2019 2:42pm Oct 22, 2019 2:42pm
Quoting MrBullBear
{quote} Those who think it's impossible, just doesn't know how.
Obviously right
  • #877
  • Oct 22, 2019 2:58pm Oct 22, 2019 2:58pm
Quoting alphaomega
{quote} Well, this is a logical problem. Because if you constantly change the rules of your strategy based on your "creativity" and "feelings" then the question is - Do you really have any rules? What kind of strategy is that? If you constantly add new, untested and unproven rules into your system then you essentially create randomness. How do you know that the new rules will lead to positive outcome? This is not how profitable trading works! The only way to find real edge in trading is through statistical analysis! Backtesting and Forward testing....
More than rules I have guides and part of my guides is to bend them when necessary to adapt to the changes of numerous market conditions taken in consideration the rule number one which is to protect my capital.

For the little that I understand you cannot code my flair, my experience, my instincts.... artificial intelligence compare will always be too slow when I am able to function into the zone.
trading is simple but is simple is not easy.
  • #878
  • Edited 3:42pm Oct 22, 2019 3:03pm | Edited 3:42pm
Quoting MrBullBear
{quote} Those who think it's impossible, just doesn't know how.
They don't know how ... and they don't know sh.tttt
They don't really know the Risk Factors. Because they lack the knowledge and the manage experience about Risk.
There are too many factors in Risk ... I will enumerate just a few ...
Some take the first 2 in consideration ... But they lack the experience in dealing with it.
Market Risk ( Technical and Sentiment Analysis ),News Risk ( Fundamental Analysis ),Central Bank Policy Risk,Economic Risk ( Macro and Global ),Broker Risk,Black Swan Event Risk ... and so on ...

Just an example on Stupid Risk Management ... those who are playing the GBP since Brexit was anounced, really love casino games.
Don't swim with the sharks ...
  • #879
  • Oct 22, 2019 3:31pm Oct 22, 2019 3:31pm
Quoting lcast
{quote} They don't know how ... and they don't know sh.tttt They don't really know the Risk Factors. Because they lack the knowledge and the manage experience about Risk. There are too many factors in Risk ... I will enumerate just a few ... Some take the first 2 in consideration ... But they lack the experience in dealing with it. Market Risk ( Technical and Sentiment Analysis ) News Risk ( Fundamental Analysis ) Central Bank Policy Risk Economic Risk ( Macro and Global ) Broker Risk Black Swan Event Risk ... Just an example on Stupid Risk Management...
It's all risky... but you gotta know how to handle it. Guess what, you can handle it. But you gotta learn how. Everything is risky.. thats the bad news, Good news is, everything can be learned. Pips be with you!
Only an idiot knows with certainty to where the market is going.
  • #880
  • Oct 22, 2019 3:31pm Oct 22, 2019 3:31pm
Quoting RickM
{quote} EA's can make a lot of money when they only hit 55% win rate, or even less. Everything can be automatic but in many cases, you are right to say they could never adapt to current market conditions like a manual trader. But this does not make a difference. But can a manual trader trade 55 charts at the same time, 24 hours a day. The Algo can perform this task easily so wins through sheer number of trades opened even thought the entry's may be lousy. Here's one that is a lousy strategy, but makes 25% profit a month. No manual...
I do not need to trade 55 charts, I only trade 3 pairs from London open until New York open and signals are taken mostly on the one hour time frame meaning I have created a distanze between myself and the price because my personality needs that distance to function in a optimal way....

Those are guide created by myself based on my personality after many years of study .....you see is not only about systems is about oneself and no way you can code me, yes you can but the time artificial intelligence reaches me I have already moved on....

Anyway, thank you all for the good chat lately, I have been reading with interest, keep it up.
trading is simple but is simple is not easy.
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