Does a strategy that works for the rest of your life really exist? | Forex Factory

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Does a strategy that works for the rest of your life really exist?

  • #1
  • First Post: Edited 3:52am Feb 20, 2007 2:28am | Edited 3:52am
I know, to be a full time trader is a dream for many of us. Do you think, after hard work, with dicipline, money management, that you can find a strategy that produce pips very year for the rest of your life? Or maybe the strategy works in two years, or five years, the market changes and the strategy begins to loss year after year. The worst is that you quit your job and invest all you have in Forex.

My question is, if a strategy that works last five years in backteating, last year and this year in live trade, can you make a conclusion that the strategy will work for ever? Or that may even work next year? Dare you quit the job for a strategy that may or may not work next year? Trading Forex for a living, will it only be a dream for ever?
  • #2
  • Feb 20, 2007 2:41am Feb 20, 2007 2:41am
No, no certanty...there is no such strategy, who knows what will happen in future, im speculating, we would SOON all have such brokers that we could only set which strategy the program should use in trading, and it will do the job for us....no emotions, its still a dream in 2007 but in 2012 it wont be...
its just money
  • #3
  • Feb 20, 2007 2:44am Feb 20, 2007 2:44am
Quoting hgus490
I know, to be a full time trader is a dream for many of us. Do you think, after hard work, with dicipline, money management, that you can find a strategy that produce pips very year for the rest of your life? Or maybe the strategy works in two years, or five years, the market changes and the strategy begins to loss year after year. The worst is that you quit your job and invest all you have in Forex.

My question is, if a strategy that works last five years in backteating, last year and this year in live trade, can you make a conclustion that the strategy will work for ever? Or that may even work next year? Dare you quit the job for a strategy that may or may not work next year? Trading Forex for a living, will it only be a dream for ever?
Why does the system work? If you have a solid answer to that question, you can determine if your system will last forever or not. Some things about the market change and other don't. Build a system that captures an unchangable market behavior then you should have no trouble quitting your day job for it.
  • #4
  • Feb 20, 2007 2:47am Feb 20, 2007 2:47am
i wonder if such life time strategy existing or not.for full time traders,how many strategy are you trading?how many of you created your own strategy and working with it for many years?
  • #5
  • Feb 20, 2007 2:48am Feb 20, 2007 2:48am
About using automated trading...
Well that's a pity, because I like it the old-school-way, analyzing charts, watching price moves, reading news and reports, you know, it's all about the actual person involved in decision making. That's what it means to be a full time trader, and I don't ever want some expert advisor to collect my pips while I sleep, or eat, or do another job or whatever
  • #6
  • Feb 20, 2007 2:58am Feb 20, 2007 2:58am
true, but u will still have to check charts, and choose what strategy to use, so it will not be 100% automated,..it should be only 70%....i would LOVE to only press button
Scalping, choose leverage, SL, what, how long and click start
or
Trending, --II--
Breakout,--II--
its just money
  • #7
  • Feb 20, 2007 3:02am Feb 20, 2007 3:02am
You mean, there really exist some maket behevior that will never change, at least, it will never change under a very long time, like ten or twenty years?

Quoting Darkstar
Why does the system work? If you have a solid answer to that question, you can determine if your system will last forever or not. Some things about the market change and other don't. Build a system that captures an unchangable market behavior then you should have no trouble quitting your day job for it.
  • #8
  • Feb 20, 2007 3:06am Feb 20, 2007 3:06am
Quoting de123
true, but u will still have to check charts, and choose what strategy to use, so it will not be 100% automated,..it should be only 70%....i would LOVE to only press button
Scalping, choose leverage, SL, what, how long and click start
or
Trending, --II--
Breakout,--II--
Sounds like PIP-TOPIA
But even if it would be possible I would trade the old way.
  • #9
  • Feb 20, 2007 3:22am Feb 20, 2007 3:22am
Quoting hgus490
You mean, there really exist some maket behevior that will never change, at least, it will never change under a very long time, like ten or twenty years?
More like 50 or 100 years or more and there are many things that stay the same. One example is interexchange arbitrage. Gold is traded in like 20 different markets and someone needs to keep all those prices equivelent. Changes have had to be made in the process over time, but since its a fundamental market problem it never really goes away.

Why does an intermarket arbitrage system work? Because each exchange is a seperate hub of price discovery and without the arbitrage process price consistency couldn't be maintained.
  • #10
  • Feb 20, 2007 10:33am Feb 20, 2007 10:33am
Yes, I believe it does exist.

Not the kind of 'curve fitting' strategies /w thousands of indicators & optimization tho.
  • #11
  • Feb 20, 2007 10:45am Feb 20, 2007 10:45am
Oh, and there is more, strategies that don't "predict" the future, but "trading" the current instead.
  • #12
  • Feb 20, 2007 12:23pm Feb 20, 2007 12:23pm
Quoting hgus490
You mean, there really exist some maket behevior that will never change, at least, it will never change under a very long time, like ten or twenty years?
Yes, it's called trend following.
  • #13
  • Feb 20, 2007 12:51pm Feb 20, 2007 12:51pm
Yes, such methods exists. A reversion-to-mean method like the Knife comes to mind. The only way price would never return to the mean would be if the market entered a perpetual trend, and that's not going to happen.

But, if I may, you're not asking the right question. The question is not whether a "method" will work for many decades. The question is whether you can become a trader that can last for decades. Think about it. If you have the skills needed to select and use a system that is working now, from the hundreds of good ones that are available, why wouldn't you be able to do that again if market conditions change and render your current method invalid?

Long term trading success is not about any method or system. It is, and always will be about the trader.

Assume there exists a stable, easy to use method that will last forever. Give it to 100 traders. 95% will still fail.

Again, it's not the system; it's the trader.

Dial
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  • #14
  • Feb 20, 2007 1:33pm Feb 20, 2007 1:33pm
Quoting diallist
Yes, such methods exists. A reversion-to-mean method like the Knife comes to mind. The only way price would never return to the mean would be if the market entered a perpetual trend, and that's not going to happen.

But, if I may, you're not asking the right question. The question is not whether a "method" will work for many decades. The question is whether you can become a trader that can last for decades. Think about it. If you have the skills needed to select and use a system that is working now, from the hundreds of good ones that are available, why wouldn't you be able to do that again if market conditions change and render your current method invalid?

Long term trading success is not about any method or system. It is, and always will be about the trader.

Assume there exists a stable, easy to use method that will last forever. Give it to 100 traders. 95% will still fail.

Again, it's not the system; it's the trader.

Dial

I sense WISDOM
  • #15
  • Feb 20, 2007 4:35pm Feb 20, 2007 4:35pm
I am still a beginner of forex trading. It may take a few more years for me to understand that it is the trader, not method that really matter.

As my understanding, the condition to be a successful trader is to find a stable profitable method. Yes, I agree, even I have a method that works for ever, it will not enough to be a successful trader. I need more like discipline, Money Manegement, patience....

After I backtested a few method that work very well this year but very badly next year, I begin to wonder if it is possible for me, or anyone else, to be a long term sucessful forex trader, because,

1 The conditions of the forex market change, and will keep on changing.
2 The method works this year may not work next year.
3 Even the expert, like forex fund manager lose, The Barclay Currency traders index went down both on 2005 and 2006.

The solution maybe find a method that work with the market conditions that never change, or keep on changing the method after the change of the market, or keep on choosing new methods afte the change of market?




Quoting diallist
Yes, such methods exists. A reversion-to-mean method like the Knife comes to mind. The only way price would never return to the mean would be if the market entered a perpetual trend, and that's not going to happen.

But, if I may, you're not asking the right question. The question is not whether a "method" will work for many decades. The question is whether you can become a trader that can last for decades. Think about it. If you have the skills needed to select and use a system that is working now, from the hundreds of good ones that are available, why wouldn't you be able to do that again if market conditions change and render your current method invalid?

Long term trading success is not about any method or system. It is, and always will be about the trader.

Assume there exists a stable, easy to use method that will last forever. Give it to 100 traders. 95% will still fail.

Again, it's not the system; it's the trader.

Dial
  • #16
  • Feb 20, 2007 6:29pm Feb 20, 2007 6:29pm
Quoting hgus490
I am still a beginner of forex trading. It may take a few more years for me to understand that it is the trader, not method that really matter.

As my understanding, the condition to be a successful trader is to find a stable profitable method. Yes, I agree, even I have a method that works for ever, it will not enough to be a successful trader. I need more like discipline, Money Manegement, patience....

After I backtested a few method that work very well this year but very badly next year, I begin to wonder if it is possible for me, or anyone else, to be a long term sucessful forex trader, because,

1 The conditions of the forex market change, and will keep on changing.
2 The method works this year may not work next year.
3 Even the expert, like forex fund manager lose, The Barclay Currency traders index went down both on 2005 and 2006.

The solution maybe find a method that work with the market conditions that never change, or keep on changing the method after the change of the market, or keep on choosing new methods afte the change of market?
This is why, as diallist correctly pointed out, it's more about the trader than the method. A successful trader can and will adapt their method and their self to the prevailing market conditions rather than throwing it all away and starting over. Evolution versus revolution. Just drop your 'r' and you'll understand what I mean.

It took me three years to finally evolve my self as a trader and my method of broker torture to know what diallist and all these guys are talking about. Keep at it and always question yourself and what's going on.

As far as my method of broker torture, price action is my mistress. No matter what indicator you put on a chart, it must be derived from the two variables that are never going out of style, time and price. So why not just study those two variables in and of themselves?
  • #17
  • Feb 21, 2007 11:28pm Feb 21, 2007 11:28pm
Quoting diallist

But, if I may, you're not asking the right question. The question is not whether a "method" will work for many decades. The question is whether you can become a trader that can last for decades. Think about it. If you have the skills needed to select and use a system that is working now, from the hundreds of good ones that are available, why wouldn't you be able to do that again if market conditions change and render your current method invalid?


Dial

I guess the idea would be to realize when market conditions have changed early enough so that you dont lose all your gains on a trading method that no longer works. To always be on the lookout. But how do you know when to go back to the drawing board? after 1 bad trade? how about 20 bad trades? Then theres the possibility that a trading system might start working again after some time has passed. These are things i think about all the time and im sure alot of people here on FF do as well. "what if my system stops working!". The only answer would be to demo trade until you find one that works again.

None of this is from experience btw, i am NOT a profitable trader YET.
  • #18
  • Feb 26, 2007 3:32am Feb 26, 2007 3:32am
ShaderZ, I ask exactly the same questions as you did.

Will my sytem work for ever? Are there things that never change in the forex market?

If not, when should I change my system?


Quoting ShaderZ
I guess the idea would be to realize when market conditions have changed early enough so that you dont lose all your gains on a trading method that no longer works. To always be on the lookout. But how do you know when to go back to the drawing board? after 1 bad trade? how about 20 bad trades? Then theres the possibility that a trading system might start working again after some time has passed. These are things i think about all the time and im sure alot of people here on FF do as well. "what if my system stops working!". The only answer would be to demo trade until you find one that works again.

None of this is from experience btw, i am NOT a profitable trader YET.
  • #19
  • Feb 26, 2007 5:11am Feb 26, 2007 5:11am
My suggestion is, you should treat your system the same any methodology in real life.

Think of a simple example. Making coffee. Basically you need hot water & sugar & coffee powder. At first, perhaps a kid only use coffee maker without knowing what process inside it, but after repeated process of making it, maybe he start to realize of what process that happen inside coffee maker. And by the time that tools broke, you've finally realize that you can always makes coffee by different method, boiling water in a pan, and mixed it with coffee & sugar in a glass for example.

All of these process to gain something is happening in every aspect of everyday life, some people use the same method, some other try other methods, and some other inventing new methods.

What makes a difference is (in coffee case) if you dont control your coffee/water/sugar stocks when learning, most likely you'll be run out of stocks before you'll be able to understand the whole process. (risk/money management aspect ) so, learn how to manage your stocks in the process.

What makes it worse, if you quit before you start, you wont be able to learn anything. So my suggestion is pick one method, stick with it in loss / win situation, and learn it deep. If you survive this (and your money survive this) you'll be able to identify when or where you have to apply your methods. (ie. you know how to make coffee, but when you're not at home, it will be much simpler just to buy coffee from machine, or doesn't drink coffee at all)
  • #20
  • Feb 26, 2007 5:32am Feb 26, 2007 5:32am
My view about things that never change universally (not just in forex market, but it can be applied to market condition too i think)

1. when there's 2 opposite force, the dominant force will draw a bystander into it side. but the other force will never be diminished, and eventually both of these force will form a balanced state whether temporarily or permanently. (some force are dominant because things we're not in a balanced state)

2. all things in universe will try to reach its balanced state. from the smallest electron to the huge galaxies.

simply applied to chart, #1 will result a common chart pattern/candlestick pattern to notice a beginning of a trend. #2 is to see where the trends heading
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