What Defines a Good System? | Forex Factory

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What Defines a Good System?

  • #1
  • First Post: Oct 24, 2010 5:07am Oct 24, 2010 5:07am
1)What are the attributes of a good system?
2)What would it take to convince you that the system works?
3)How long would it have to work before it could be considered a good system?
4)How profitable would it have to be?

I'm looking for your opinions, here are my answers
1) It must have definitive entry/exit points, no guessing. It must be understandable to someone with no college degrees. It must make at least 5% a day average. It must work in all market conditions.
2)It would have to turn a micro account into a standard account in less than a year.
3)Not long, I believe that market conditions are changing daily so if it remains profitable more than 3 months it's good enough for me.
4)It must average at least 5% a day.
  • #2
  • Oct 24, 2010 5:44am Oct 24, 2010 5:44am
are you expecting 5% profit every day ? thats a strecth for me. i would kill to get that kind of returns on monthly basis consistently
  • #3
  • Oct 24, 2010 6:01am Oct 24, 2010 6:01am
Quoting jaws810
1)What are the attributes of a good system?
2)What would it take to convince you that the system works?
3)How long would it have to work before it could be considered a good system?
4)How profitable would it have to be?

I'm looking for your opinions, here are my answers
1) It must have definitive entry/exit points, no guessing. It must be understandable to someone with no college degrees. It must make at least 5% a day average. It must work in all market conditions.
2)It would have to turn a micro account into a standard account in less...
OK first for moderator> this is thread for Trading Discusion

Second i will answer on this question >

Ist very simple,
Good system is system wich can give place for your personality,that mean wich is according your personlity (your way of trading agressive,long term trader).There is no best system or bad system,all you need is HUGE DISCIPLINE wich is for new traders very hard to learn and need very long practice.

My advice is >

Create strategy and create rules wich you must respect,creation musnt be nonknolegde that mean you must add MM in every system you choose to work.

Cheers

Petar
"Buy on fear, sell on greed !!!
  • #4
  • Oct 24, 2010 6:39am Oct 24, 2010 6:39am
Quoting jaws810
1)What are the attributes of a good system?
It puts the odds in your favor.

Quoting jaws810
2)What would it take to convince you that the system works?
At least 5 profitable years across 10 pairs.

Quoting jaws810
3)How long would it have to work before it could be considered a good system?
One year, AFTER I decided that it's a good system.

Quoting jaws810
4)How profitable would it have to be?
At least 25% a year, risking max 1% per trade and not more than 20% drawdown peak-to-valley.

Quoting jaws810
I'm looking for your opinions, here are my answers
1) It must have definitive entry/exit points, no guessing. It must be understandable to someone with no college degrees. It must make at least 5% a day average. It must work in all market conditions.
2)It would have to turn a micro account into a standard account in less than a year.
3)Not long, I believe that market conditions are changing daily so if it remains profitable more than 3 months it's good enough for me.
4)It must average at least 5% a day.
You are in the wrong business.
And, since when the measurement stick of a good system is turning someone's micro account into a standard account in less than a year? What is the relation between what you need and the market?
  • #5
  • Oct 24, 2010 11:02am Oct 24, 2010 11:02am
Quoting Sauron

You are in the wrong business.
And, since when the measurement stick of a good system is turning someone's micro account into a standard account in less than a year? What is the relation between what you need and the market?
That's just my opinion, because I know it's possible because if you're using a micro account or individual units at OANDA, using 95% of my account as margin, 5% is only 14 pips on Euro. What's that one or 2 decent trades a day, sure it requires the use of your entire account at 50:1 leverage but it's not at all unrealistic, and I said average 5% a day, I know I'll have bad days where I make less than 5% or maybe even a small loss but I'll also have good days where I make much more than 5%.

I'd actually be happy with 25% a year if I had a million in my trading account, and as I get closer to that point I'll reduce my use of leverage which will reduce my daily return, but at that point it won't matter. I'm not unrealistic, just a bit more aggressive than most.

And as further proof that it's possible George Smith the author of Forex Trading Made E-Z e-mails several videos weekly demonstrating that it could be done. He's been doing it for years.

Just a side-note I made over 70% on my week to week balance LAST WEEK, but it's the only time I've done it and it was done with a new trading idea, so it could have just been a good week.

Nothing is impossible unless you think it's impossible, in which case you're right, it is impossible for YOU.
  • #6
  • Oct 25, 2010 5:51am Oct 25, 2010 5:51am
Honestly, I think your criteria for a good trading system are waaay too constricting. There is no system that adheres to each of your requirements.

For one, there is no such thing as a completely robust system that can handle all market conditions-- one must constantly adjust to whether the market is trending or consolidating. For example, relative-value arbitrage strategies may work in stable market conditions; but in times of high volatility and uncertainty, it must be dropped. Go google "Long-Term Capital Management" of the risks associated with "theoretically robust" trading systems.

Furthermore, your demands for such a high return are also quite problematic. Although it can be done, only the most disciplined traders can achieve that. Try using volatility breakouts with Kelly position sizing if you wanna know what I mean. You can get as much as 60-70% in drawdowns. But in exchange, the gains can be spectacular if you properly know your win % and payoff ratio.

If you want to personally evaluate trading systems, I recommend Balsara's Money Management for Futures Traders (applicable to all markets) and Vince's Handbook of Portfolio Mathematics.
  • #7
  • Oct 28, 2010 1:21pm Oct 28, 2010 1:21pm
A good system is one -

 

  1. That doesn't give you BUY and SELL signal blindly.
  2. One that is objective.
  3. One that makes clear distinction between different market phrases.
  4. One that follows market beliefs and sentiments.


Sorry, I did not mention success and R:R rates and what not. I guess you can understand why.

  • #8
  • Oct 28, 2010 1:47pm Oct 28, 2010 1:47pm
1. Any system/method that is profitable.

2. Position sizing, account size, and risk can be varied to
suit income requirements over time.

3. It should suit your personality.

Forget about your daily expectations. You never know what
your trading day is going to produce. You may have a historical
average of daily profits, but that's about it.

If your expected "egde" is small and you only take a few trades each
day... your income will be small comparatively.
If your expected "edge" is slightly larger and you take 30 trades each
day, you have a slightly better chance of ending the day in profit.

Psychology is important, but a well tested method that you believe in that
produces regular profits... will really help your psychology.

A great chess player once said, " I don't believe in psychology,
I believe in good moves. "

It could be adapted to trading somewhat-
"I don't believe in psychology, I believe in good trades."
  • #9
  • Oct 28, 2010 3:07pm Oct 28, 2010 3:07pm
This is just my personal opinion but I don't think you will get 5% every day.

The market doesn't work like that... you have to account for holidays big news days on the horizon where everything just trades in small range.

Trying to push for 5% everyday is just begging for disaster. If you are looking for contingent trades or trades that meet a certain criteria you for surely won't hit 5% everyday.

If you try to increase your lot sizing to compensate for it, your begging for disaster to strike.

Patience plays just as much a part as other emotions Greed, fear, consistency and timing.
  • #10
  • Oct 28, 2010 3:16pm Oct 28, 2010 3:16pm
If you see a "system" that doesn't use a SL, run, run far far away.
Enter Signature
  • #11
  • Oct 28, 2010 3:56pm Oct 28, 2010 3:56pm
5% per day compounds $1000 to $218M in one year.

That sounds like a reasonable objective to me.
  • #12
  • Oct 28, 2010 4:32pm Oct 28, 2010 4:32pm
I believe I have a good system. 14 months without a lossing trade. 530 winning trades in a row. 30 average pips per trade. Only one loss in 675 trades. The one loss wasn't due to the system. My onlly rule is not to trade unless I'm 100% sure it will be a winning trade. And, stay away from opinions, advise, and other systems.
  • #13
  • Oct 28, 2010 4:37pm Oct 28, 2010 4:37pm
Quoting jzw
5% per day compounds $1000 to $218M in one year.

That sounds like a reasonable objective to me.
Haha that went through my mind too.
What are people thinking?! If they fail at basic math they will probably
fail at trading anyway.
  • #14
  • Oct 28, 2010 5:18pm Oct 28, 2010 5:18pm
Quoting vosterfxandy
If you see a "system" that doesn't use a SL, run, run far far away.
I thought every system should have SL
even robot/EA is using it...

So far did not see any system without SL
is like playing with wildfire man
  • #15
  • Oct 28, 2010 5:20pm Oct 28, 2010 5:20pm
Quoting asyi
I believe I have a good system. 14 months without a lossing trade. 530 winning trades in a row. 30 average pips per trade. Only one loss in 675 trades. The one loss wasn't due to the system. My onlly rule is not to trade unless I'm 100% sure it will be a winning trade. And, stay away from opinions, advise, and other systems.
Hi asyi

mind to share the system?
Looks unbelieveable
  • #16
  • Oct 28, 2010 5:25pm Oct 28, 2010 5:25pm
Quoting roundrock
are you expecting 5% profit every day ? thats a strecth for me. i would kill to get that kind of returns on monthly basis consistently
how about 5% a day minimum and about 30% weekly, this can be done by anyone, just do some thinking, took me only 6 years to figure this out, goog luck all...
  • #17
  • Edited 6:15pm Oct 28, 2010 5:56pm | Edited 6:15pm
Anyone expecting to compound average +5% a day with a retail setup, should just play the lottery, since your chances might be a bit better.
I don't mean to say that arrogantly, but a good system is one that is feasible and pragmatic.
  • #18
  • Oct 28, 2010 6:20pm Oct 28, 2010 6:20pm
Quoting fofac
Hi asyi

mind to share the system?
Looks unbelieveable

it is, that's why you will never see it.

"I only make trade when I am 100% sure it will be successful."

not even the pros can do that.... well except for maybe China lol.
  • #19
  • Oct 28, 2010 7:27pm Oct 28, 2010 7:27pm
If what you thought you knew wasn't true, would you want to know it? The last time I posted a web-site I got thrown off ff so no, you won't see my system or stragegy but let me say it is incredible.
  • #20
  • Oct 28, 2010 7:54pm Oct 28, 2010 7:54pm
Quoting dfptommyj
just do some thinking guys...
Indeed, soon you will be the richest man in the known universe.
The breaking of a wave cannot explain the whole sea.
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