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Change a losing system into a Winning system

  • #21
  • Dec 7, 2007 8:28am Dec 7, 2007 8:28am
Absolutely true for both scenarios

cheers

Quoting Subdude
... or down 150. I couldn't sleep too well having that in the back of my mind.
  • #22
  • Dec 7, 2007 8:51am Dec 7, 2007 8:51am
For that it's very easy, create a simple EA that will trade a loosing strategy. Reverse the order and you will see that it's still a loosing strategy... Funny isn't it

Give a 90% success rate strategy to a bad trader and we will still lose money...

Even with a 100% success rate, it's still possible to lose money if the bad trader do not respect the strategy (which is why he is a bad trader ^^ )
  • #23
  • Dec 18, 2007 1:25pm Dec 18, 2007 1:25pm
Quoting sindutzz
If we have a losing system why dont we just do a reverse trade ?
Or if we have a losing EA, why don't we just edit the EA so when the EA give a BUY signal then change it into SELL signal. And do same for SELL signal.

Has anyone ever consider this?

Sorry for this stupid question
If you think about it, brokers have been doing this for a long time. Someone takes the other side of your trade, and makes money doing it, I suppose.
  • #24
  • Dec 31, 2007 12:56pm Dec 31, 2007 12:56pm
problem is statistically with the spread you are always at a mathematical
disadvantage...
  • #25
  • Jan 29, 2008 3:01am Jan 29, 2008 3:01am
Quoting Daniel Tyrkiel
No offense to the creator of the thread, but WOW, I can't count the number of people that have come up with this idea (including me) over the two years I've been learning to trade. I even know where this urge to reverse the rules of a system comes from. Usually when you open a trade it doesn't go in our direction at once. Most often it retraces a little and that initial move scares a lot of newbies out, forcing them to take a loss, then seeing the price move in the right direction. The other instance is when new traders base their trades on various trendline crosses, macd crosses, RSI, CCI, etc. crosses, and take trades against the trend. Again, I know I did - I still remember the day when I was constantly buying cable on the 15 min chart when it moved down over 200 pips
All in all, the idea is nothing new, and we all come up with it at some point.
.

I agree with you. As a newbie, this is how I lost all my money, because any slight movement of the price against my position would prompt me to closs the market, hence making my loss accumulted. This is why too small capital is not advisable to start trading forex.
  • #26
  • Jan 29, 2008 3:10am Jan 29, 2008 3:10am
Quoting PrivateFX
In my opinion, I think it may be best that you go back to some demo trading to prevent yourself from losing more money and to find something that works for you first. There is no rush to be in the market, it will always be here. When trading, it's a good idea to give trades some breathing room. When your stops are too tight, you will be taken out of the market quite often on the little retraces before it gets a chance to continue in it's original anticipated direction. Practice a lot of money and risk management, you will notice that it makes a huge difference.

Nice idea! If you refuse to trade demo and start gambling with your money, you are likely to lose everything in the end. This has been my experience. Rather than waiting to be I hurried intolive account and lost my money.
  • #27
  • Mar 9, 2008 8:34am Mar 9, 2008 8:34am
Suppose you develop an EA that is always wrong, now you take the opposite trade everytime and it still does not make money.

Can you not see what the problem is ?

It is not the system, it is the constraints that the system is trading under stop loss take profit etc.

As I have said before, long or short it is not important, you can even make money trading against the trend, small amounts and I know but it is possible!

So the system to enter and exit is just the start, what you have to do then is figure out stops, profit targets etc, then develop the system around that.

You can have a system that make 99% winning trades and it will lose, because the profit to loss ratio is too high ie it makes three points on each trade but has a 300 point stop, one day you will hit your stop and that will wipe out all your profit. never mind the commision to the broker.

But if you play with the TP you find your winners decrease, your profit has to always be more than your stop. When you have a system that gives you 51% winers to looser you have done it especially if your ratio is 2:1 profit to loss.

so the fundimentals of a winning system is that the potential profit on any trade is always larger than the potential loss, then tweak it to get more than a 50:50 win to loss ratio.


Smalldog
  • #28
  • Mar 9, 2008 3:41pm Mar 9, 2008 3:41pm
Quoting saint_berzer
This reminds me of the Seinfeld episode where George decides to do everything opposite....because his life has been a failure. Then everything happens his way....freaking hilarious.

Good idea!

You beat me to it but oh well. Allow me to demonstrate

http://img117.imageshack.us/img117/9...nstanzaad4.jpg http://img166.imageshack.us/img166/2...zaphixrfi8.jpg


To the left is George and to the right is Opposite George. See the difference here? See the resemblance? No matter how you slice it, it's still George!
Not all sins are created equal
  • #29
  • Mar 18, 2008 11:15pm Mar 18, 2008 11:15pm
Hi. This is interesting idea. How about to applies random distribution? I mean to decide buy or sell we throw a dice with Monte Carlo, Statistical Physics, or whatever random distribution. Or we use the jargon in trading: 90% loss and 10% win, so we create random distribution with this number?
  • #30
  • Mar 18, 2008 11:36pm Mar 18, 2008 11:36pm
Quoting sindutzz
If we have a losing system why dont we just do a reverse trade ?
Or if we have a losing EA, why don't we just edit the EA so when the EA give a BUY signal then change it into SELL signal. And do same for SELL signal.

Has anyone ever consider this?

Sorry for this stupid question
Lets think about it, seriously, I am not joking because it is a good question. If we have a bad system, it doesn't automatically make the reverse of it good. Just like a baseball game; if I was losing every single game, reversing the order of my batting line-up, does not mean that I will start winning every game.
  • #31
  • Sep 1, 2008 11:09pm Sep 1, 2008 11:09pm
Just to try and be a little serious, I remember a quote I read that went a little like this. "Most traders are right at the wrong time"
There is a reason you took the trade so keep that initial reason but then think about that statement. Maybe when you are supposed to go long you now wait until price retraces 50% of where your stop was going to be or you wait till price actually hits where your stop would have been then you enter the trade the same way you were originally going to but with half the s/l and still the same t/p. You just bumped your r/r ratio up which is always good. If you get stopped out, who cares, at least it is only half your original position size and when it works out you just made more than originally intended.
Sure you might miss some moves that don't retrace but that is part of the game.

Juicyt
"Even if you fall down face first, you still went forward."
  • #32
  • Oct 22, 2008 9:50am Oct 22, 2008 9:50am
As it happens, I have a system that produces fairly consistent losses. This is an EA so can easily be backtested. I haven't quite got the reverse version working correctly but am near enough. What happens is that double the broker's spread goes against you. This is easy to see in action on your demo account. Simply place a Buy Stop and a Sell Limit your broker's spread apart. These trades will activate simultaneously and as soon as triggered you will see that you have an instant loss of double the spread.

This is definately a valid and interesting thread. The chances are that it is just as difficult to create a consistent losing system as it is a winning system. Sounds as though there is a challenge here!

Duncan
  • #33
  • Nov 22, 2008 10:03pm Nov 22, 2008 10:03pm
hello all trader, good morning. Let go to be winner on forex. please sharing trading strategy for newbi
  • #34
  • Nov 22, 2008 10:05pm Nov 22, 2008 10:05pm
Quoting sarby999
hello all trader, good morning. Let go to be winner on forex. please sharing trading strategy for newbi
Don't go short on a long trend and long on a short trend
Not all sins are created equal
  • #35
  • Dec 28, 2008 5:21pm Dec 28, 2008 5:21pm
If you had a system with a 1 pip stop which lost 95% of trades (which is quite likely), would you be able to reverse the system and expect to win 95% of trades?

A losing system doesn't lose because it enters at the wrong time, it loses because it has a negative expectancy.

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss)

Doesn't matter which way you flip the system, the expectancy can still be negative.

Focus on limiting your losses and maximising your profits.
  • #36
  • Dec 29, 2008 3:17am Dec 29, 2008 3:17am
You can't reverse something that is not symertrical...
  • #37
  • Dec 29, 2008 3:30am Dec 29, 2008 3:30am
Quoting Duncan
As it happens, I have a system that produces fairly consistent losses.
Duncan
Everybody has an EA that does this.
  • #38
  • Dec 29, 2008 3:31am Dec 29, 2008 3:31am
Thanks for all sharing trading system. I waiting another sharing for me
  • #39
  • Sep 2, 2009 10:22pm Sep 2, 2009 10:22pm
Quoting sindutzz
If we have a losing system why dont we just do a reverse trade ?
Or if we have a losing EA, why don't we just edit the EA so when the EA give a BUY signal then change it into SELL signal. And do same for SELL signal.

Has anyone ever consider this?

Sorry for this stupid question
Hello Sindutzz:
Your idea may be closer to success than you think. Concentrate on the methodology of reversing the trades. Solve that and you may get a chance to smile at the cynics.
By the way what EA's have you come across that has this desirable characteristic of Always loosing or used to win?

If you care to mention a name or even pose the worse.

Bless.
  • #40
  • Sep 3, 2009 3:13am Sep 3, 2009 3:13am
Quoting pathumracled
Hello Sindutzz:
[color=black][font=Verdana]Your idea may be closer to success than you think....
sindutzz Member
Last Activity Jan 15, 2008
Member Since Aug 11, 2006



That's going to take a while....
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