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100% mechanical systems 12 replies

100% mechanical trading systems

  • #41
  • Mar 8, 2007 10:54pm Mar 8, 2007 10:54pm
FXTerminator, there's a simple sentence that can replace all of your long statements above.
"I want a single system so that I can just leave forex market for long time (like 10 years?) and just let my IA/program/machine do the trading, but when I come back to check I want to see the profit after that 10 years (of course the return must be higher than if I just put it into fixed income instruments like Treasury Bonds)."
There you go. Of course there are some exceptions like World War 3 or an asteroid falling into the earth or other catastrophe/apocalyptic things.
Anyway, just my opinion.
Tra-X
  • #42
  • Mar 9, 2007 12:36am Mar 9, 2007 12:36am
Quoting mrmikal
FXT,

My friend, I respect your opinion, but I'm going to have to respectfully disagree.
There is a place for diplomacy and a place for just plain get the F:::k Outta Here.
I don't feel diplomacy coming on.

Quoting FXTerminator
That should be obvious Richy.

If a system is STILL performing well after 1000 trades for example, it only means one thing : your system is definitively giving you a statistical edge.

If system A gives me 10,000 pips after 20 trades and System B "only" 3000 pips after 1000 trades, both in a 5 year period, I would always choose to trade System B.

Why?

Because how do I know the results from system A (20 trades) are not due to chance alone ?
I doubt you have 1,000 trades under your belt never mind 10,000. But then again I mean Real Trades, not "If I Were Or Had Been ... Trades"
This says to me that you are waiting to be wrong 900 + times for the next 5 years before you are willing to put put your [or your clients] pills in the game. {I mean the Real game} or else you need someone to tell you how to do it.
(Sorry. had a bad Family Crisis Day and don't feel like being nice.)
  • #43
  • Edited 2:01pm Mar 9, 2007 1:40pm | Edited 2:01pm
Quoting mrmikal
The world does change, and while the market moves up and down and sideways, they do so for different reasons. Understanding the true dynamics of those systems implies that systems that do work during one set of events may not for another.
I understand totally what you are trying to say my friend, but again, as a pure technical analysis and sytematic trader, I do not care one bit about "fundamentals".

Yes the world does change, but let me tell you this : we humans remain the same! We do NOT change ! We have NOT changed since Adam and Eve ! We are STILL all motivated, at least from a trading point of view, by two basic emotions: fear and greed. And trading systems are PRECISELY designed to capture those two basic emotions and turn them into profits and pips.

That's why, and you mark my words, a good, robust trading system will ALWAYS make money, now or 50 years from now.

Why?

Because the market is not random that's why.

Yeah? And why is that ?

Because the market is moved by humans, and as long as humans can feel and act on greed and fear, you and me and any other systematic disciplined trader in this forum should be able to profit from these emotions and make money, simply because people (traders) tend to react the SAME way when confronted with the SAME situtation.

Fear and greed my friend, that's all we (the traders) need to make money.



Quoting mrmikal
For example...oil...it can go up and down and sideways based on geopolitical factors...those factors may or may not be there the next day (you get the point).
Speaking of oil, I was able to milk this sucker dry for all its worth with a simple moving average (in the futures market), from $25 all the way to $70, ($45,000 profit per contract), while others were crying about the price of oil at the pump. So you see, you should not worry too much about geopolitical events and all that, just identify a trend and ride it, that's ALL there is to it ... "and the rest is just conversation".



Quoting mrmikal
While we'd love to believe that there is a mathematical formula to the markets, there just isn't...any system you use whether you get it to work for 10 years or 2 years will ALWAYS be curve fitting...you'll just be fitting a different curve.
Absolutely not, again take a look at page 36 in Futures Magazine (Feb. issue), the Aberration, Basis II, Dollar Trader, Golden SX, R-Breaker, STC S&P Daytrade and the Trend Channel systems have been making money since 1987.

These systems are still making money after 20 years (I wrote 10 years yesterday that's a typo), with the SAME parameters !!

So, still thinking that "the markets change" and trading systems need to be curve-fitted ? http://forexfactory.com/images/icons/icon12.gif

See you later and thank you for your input.
  • #44
  • Mar 9, 2007 1:58pm Mar 9, 2007 1:58pm
FXT,

:-) It's good that you'rea adamant about your beliefs. This is good, at least you're not wishy washy. Conviction can be helpful.

I will, as I stated yesterday, respectifully disagree. Some of the systems you mentioned don't necessarily trade the forex market, which I'm saying is a much more compressed, much more reactionary market. If you want to talk about systems that always work, buying and holding always seems to do well because that is the natural push of thing. Self-manifestation, so to speak. THAT system has worked for many more decades than any of those, and is quite mechanical.

While I'm willing to concede to some of your points, because they are good, I will disagree with your overall points of the abscense of change. I think if it's one thing that is inevitable in this world, it's change. :-) That is just MY philosophical conviction, and I'M sticking to it.

Have a good weekend, my brother.
  • #45
  • Mar 9, 2007 2:48pm Mar 9, 2007 2:48pm
Quoting FXTerminator
A pure mechanical system that exceeds 270 pips a month (like in your case) profit in a 5 year backtest (without any pyramiding and per lot per currency pair) WITHOUT EXPOSING THE TRADER TO HUGE RISK (like the Firebird system) simply does NOT exist, and I challenge every one in this forum to prove otherwise.
Was the humble member of TeamAphid that made the first post

The fact that you don't get that results does not mean that the system does not exist, it only means you have not found it yet.

Without taking up your challenge (this is not a contest, it is suppose to be a learning experience), take a good look at the indicator used in the BAT system. Now that line you see there was described in a book by Perry Kaufman, called Commodity Trading Systems & Methods, published by John Wiley & Sons in 1978. Book is long on math and short on practical applications; still, it's an excellent reference.

To my knowledge Larry Williams was the first one to see the potential of the volatility breakout method and to really capitalize on it. He sold several systems based on this technique. One version was called the Million Dollar Method and was used in his famous feat of turning $10 000 into $1 000 000 in one year.

Soon others joined the party and marketed their versions (OK, TeamAphid was very late for this party). Then, in 1988, Larry Williams wrote a book called The Definitive Guide To Futures Trading in which he revealed the formula in greater detail.

You may wonder how so many people could get so so much mileage out of one simple formula. The answer is that it really is a good system; maybe not idiot proof but certainly a good, solid place to start.

Is this our best system? No, it has a specific role in our portfolio of systems. Did we change the settings along the way? No, not since we started the thread on on FF, a few years ago we changed some of the settings but before anybody shouts curve fitting, we do not curve fit, we go for the most robust set of parameters. Why did we change the settings? Because the correlation between the pairs we trade changed.

Reason for this post, to show people that it is possible to get a 100% mechanical trading system. Where do you get it, within yourself. You will have to figure it out, no other person know your personality profile, only you do. One person will be OK with the drawdowns and will calculate profit on a monthly basis, to others it might seem insane. Look at the BAT again, everything you see in there is on ForexFactory, our entry, our money management, everything - we just took a few loose pieces, assembled it and gave it back in return.

Just for interest, one of the systems we trade was backtested for 10 years, still going strong
  • #46
  • Mar 9, 2007 3:27pm Mar 9, 2007 3:27pm
Quoting TeamAphid
Now that line you see there was described in a book by Perry Kaufman, called Commodity Trading Systems & Methods, published by John Wiley & Sons in 1978. Book is long on math and short on practical applications; still, it's an excellent reference.
I read Kaufman's books a long time ago, the first one is a classic and his second, updated book is called "New Trading Systems and methods" and is just as good, with some Omega Trade Station codes and backtest results presented as well , did you read it yet?

Quoting TeamAphid
To my knowledge Larry Williams was the first one to see the potential of the volatility breakout method and to really capitalize on it. He sold several systems based on this technique. One version was called the Million Dollar Method and was used in his famous feat of turning $10 000 into $1 000 000 in one year.
Granted, but remember that Williams heavily pyramid-ed his futures positions to go from 10k to a cool million dollars profit. A good trading system is a good thing, but how you manage your trade when you are winning is the key. In fact 90% of Larry's profits come from pyramiding, the rest is due to the system itself.

Quoting TeamAphid
Reason for this post, to show people that it is possible to get a 100% mechanical trading system.
Indeed !! (No need to convince me here, I agree 10,000% http://www.forexfactory.com/images/icons/icon7.gif )

Quoting TeamAphid
Just for interest, one of the systems we trade was backtested for 10 years, still going strong
That only proves one thing, your system is robust and can make money under any market condition in the long run, so congratulations.

Nice post overall, have a good weekend.

PS: mrmikal, sorry I don't have a copy of the book you were talking about anymore.
  • #47
  • Jul 2, 2007 11:07am Jul 2, 2007 11:07am
  •  Carlos
  • | Joined Sep 2005 | Status: Commitment, planning and discipline | 65 Posts
[quote=Nybegynner;237225]I can tell you right away. There is no such thing as a 100% mechanical trading system.

Ooh please, stop saying things like that... why is 50% of all volume on the CME is algorithmic trading, just because YOU have not found a 100% automated trading system certainly does not mean they don't exist. I am living proof of this and so are many other traders. How do some trading firms exist that do nothing else than 100% mechanical systems.

THEY EXIST VERY MUCH and i have a number of them.
  • #48
  • Jul 2, 2007 11:38am Jul 2, 2007 11:38am
Quoting TeamAphid
Reason for this post, to show people that it is possible to get a 100% mechanical trading system. Where do you get it, within yourself. You will have to figure it out, no other person know your personality profile, only you do.
I find truth in this. Only after I decided to build my own system from scratch, could I stop worrying about validity because I was confident in myself. When a system isn't your own, it is natural to doubt it.

That's why I think there is so much skepticism "100% mechanical systems don't work." When you build one with historical data, you can verify entries and exits by eyeballing the charts. Being able to code EAs has been helpful to me. Of course, nobody has a crystal ball. Your system can nosedive the following 12 months. But you know this already, don't you?
  • #49
  • Nov 11, 2010 2:52pm Nov 11, 2010 2:52pm
Quoting EasyComesItGoes
I'm looking for links to 100% mechanical trading systems with mechanical money management. Everything - 100% mechanical, where no stupid human brain is needed.

It doesn't have to make big profits in %-s, but the equity curve should be as steady as possible.

Please add a link to the sites where I could download these systems for free or for a cost. Or just write/descripte here, thanks.

Backtesting results of the systems should be available with the system.

If this working 100% mechanical systems are just a myth, then please let me know and I...
I made test if they're any use to you, all 100% free, no ads no fees, nothing withheld either http://www.myforexdot.org.uk/FreeTec...ngSystems.html
  • #50
  • Nov 11, 2010 2:54pm Nov 11, 2010 2:54pm
Quoting Nybegynner
That system has insane drawdowns. I think the thread starter asked for something with a bit smother equity curve.

You see, you cant just count the pips without taking into consideration what kind of draw downs you get. If you have a 50% drawdown, you have to make a 100% to just break even. This is why all these "My system makes x amount of pips a month" systems wont get you rich.

All good mechanical systems will have large draw downs; you can't trade such a crude system and not suffer large draw downs.
  • #51
  • Nov 11, 2010 2:56pm Nov 11, 2010 2:56pm
I see the 'team aphid' website now has the saucy domain girl.
What a surprise.
The breaking of a wave cannot explain the whole sea.
  • #52
  • Feb 21, 2014 5:57pm Feb 21, 2014 5:57pm
it took me almost 6 yrs but I now trade a 100% mechanical system based on probability 4 trades max a day and the only possible way of losing if the range of the day is less than 20 pips.
I now trade without fear or worry
  • #53
  • Feb 21, 2014 6:28pm Feb 21, 2014 6:28pm
Well, I'll be the first to ask - are you prepared to show how you do it? Thanks.
  • #54
  • Feb 22, 2014 7:40pm Feb 22, 2014 7:40pm
Way back in '89 or '87 I am not sure which, I bought a purely mechanical system for the commodities market from Larry Williams. He used it for 12 months to win a trading competition, starting with $10,000 and ending with (I think) $1.5m. I didn't do that good but I still made enough money to put down a 50% deposit on a house. Can a system in this age do the same thing? I wouldn't have a clue.
  • #55
  • Feb 22, 2014 8:05pm Feb 22, 2014 8:05pm
Quoting bobha
I didn't do that good but I still made enough money to put down a 50% deposit on a house. Can a system in this age do the same thing? I wouldn't have a clue.
I would think that if you made so much then you SHOULD have a clue. Why don't you have a clue????
Were you simply relying on "blind luck" because you "bought" a system ??

Apparently it was just blind luck ???? But that's great ! ?
When the Joker is in the deck.. fear not and play it well
  • #56
  • Feb 22, 2014 8:37pm Feb 22, 2014 8:37pm
It took me about 5 years but I now have a 100% mechanical system. No indicators, No PA, No FA, just naked chart and multiple TF's. And I don't have to sit in front of the screens for hours on end.

Its my holy grail. Very proud of it
Howlin' at the Moon on the Roof
  • #57
  • Feb 22, 2014 8:51pm Feb 22, 2014 8:51pm
Quoting Wolf_Wicked
Its my holy grail. Very proud of it
Holy grail, 'eh ?? Well you go for that !!
When the Joker is in the deck.. fear not and play it well
  • #58
  • Feb 22, 2014 8:56pm Feb 22, 2014 8:56pm
Quoting Slim Buffett
{quote} Holy grail, 'eh ?? Well you go for that !!
I said MY holy Grail... Losing trades are well part of my system.
Howlin' at the Moon on the Roof
  • #59
  • Feb 22, 2014 8:58pm Feb 22, 2014 8:58pm
Quoting Wolf_Wicked
I. No indicators, No PA, No FA, just naked chart
LOL !! No nothing, 'ay !!

Repeat "no nothing, ay!! "

Repeat "no nothing, ay!! "...
......
When the Joker is in the deck.. fear not and play it well
  • #60
  • Feb 22, 2014 9:00pm Feb 22, 2014 9:00pm
Quoting Slim Buffett
{quote} LOL !! No nothing, 'ay !! Repeat "no nothing, ay!! " Repeat "no nothing, ay!! "... ......
Hi Slim given your history in polite conversation you can kindly suck a a wolfs furry cock

bye now
Howlin' at the Moon on the Roof
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