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5 years and still no strategy

  • #1,221
  • May 9, 2017 11:59am May 9, 2017 11:59am
Quoting shiva
{quote} That's a losing system. I reversed it and started selling during full moon and buying on sunny days. Rest is history as my yacht, fleet of Ferraris and Bentleys and multiple castles will prove.
Its been pointed out a million times before, but its worth making again. The reverse of a random system, is still a random system (try reversing any of the systems that crash and burn with alarming regularity and see how far you get)

Of course once you understand why random systems actually work, and how you might go about trading one, you'd make money regardless of whatever direction you decided to choose, and thats why the coin flip works so well.
  • #1,222
  • May 9, 2017 12:03pm May 9, 2017 12:03pm
Quoting VEEFX
{quote} so what did you learn or what will you do differently going forward to avoid starting another thread like this in 5 yrs? Nevermind... cya you in another 5 years after seeing this I'm looking for a simple indicator (like below) which have an option to enable historical ATR/ADR levels for X days. Is there something worth trying? Lesson Learnt : Should have checked your profile before participating in this thread. Looks like start new threads is your hobby {image}...
what I have learned? one very important thing - everyone who loses time on writing posts on the forums doesn't make money sad but true and I've seen this many times - the same nonsense is repeated everywhere and only a few posts in this thread were worth reading so the best what I can do is trying, trying and once again trying - nothing more


this is my last post in this thread so thanks for all for participating in this discussion



happy trading! cheers, freakout
Trade or not to trade - that is the question...
  • #1,223
  • May 9, 2017 12:49pm May 9, 2017 12:49pm
Quoting freakout
{quote} what I have learned? one very important thing - everyone who loses time on writing posts on the forums doesn't make money sad but true and I've seen this many times - the same nonsense is repeated everywhere and only a few posts in this thread were worth reading so the best what I can do is trying, trying and once again trying - nothing more this is my last post in this thread so thanks for all for participating in this discussion happy trading! cheers, freakout
Says the guy who writes a useless post.....
  • #1,224
  • May 9, 2017 2:27pm May 9, 2017 2:27pm
One thing and one thing I have observed about life is that; It's hard to be simple. But simplicity is elegant, the most successful trading strategy are ridiculously simple. For one reason or another its so hard to be simple. One said simplicity is the ultimate sophistication. You usually get simpler and simpler with years at trying your hands at this business, persevere and your mind might one day receive illumination. Just ignore the tons of confused people who have no idea of what they are doing, they will mess you up.

Another advice is that trading is not for everyone, a lot of people are bloody brilliant(Both fundamentalist and technician) but they are broke. Try to work on your emotional side, this business is not shiny every day, its mostly a hustle. You need the faith to trade when nothing is working and it seems you will not have another winning trade. You need to be a beast to make it day trading. The emotional ups and down takes a toll on you. In Long term trading, the toll is a lot slower and so are the returns. Day trading is for real beast, whether lion ( aggressive fearless trader), cheetah( Fast in and out), elephant( slowly walking through your price wings). Choose which beast you wanna be.
Special one
  • #1,225
  • Edited 4:00am May 10, 2017 3:45am | Edited 4:00am
Quoting Razzle
Its been pointed out a million times before, but its worth making again. The reverse of a random system, is still a random system (try reversing any of the systems that crash and burn with alarming regularity and see how far you get)
Agree with your above statement, but......
Quote
Of course once you understand why random systems actually work, and how you might go about trading one, you'd make money regardless of whatever direction you decided to choose, and thats why the coin flip works so well.
There may be instances of traders who've gotten lucky for a time with coin toss entries, but I think it's fairly easy to prove that random systems aren't long-term profitable. Because, if they were:

1. Institutions, managed funds, prop firms etc could save themselves millions in salaries by dismissing all of their highly paid analysts, economics PhDs, veteran traders, math and IT experts etc etc, and replace them with a coin toss. The whole industry would have moved away from TA and FA long before now.

2. If entries are random, then the edge must come from the exits, right? So either you cut your losses quickly, and let your profits run (RR>1); or vice versa (RR<1). The former will profit in a trending market; latter in a sideways market; but if you're choosing suitable market types or setups, then you still require analysis, rather than truly random entries. The other argument I've read is the 'levy flight' or 'fat tail distribution' (which was famously exploited by the Turtles), i.e. shoot for RR>1 trades, and add to winners, in ANY market. But if attaining an edge was that easy, then all retail traders could simply run a suitable EA, and effortlessly retire rich: then either the market would cease to become (pseudo) zero sum, which is of course unthinkable; or big players and market makers would institute appropriate countermeasures. And if it's not as easy as a simple EA, then there must be some kind of rationale involved, which means that the system is no longer random. Even if there was a small edge provided by 'fat tail distributions', it must also be large enough to overcome transaction costs, which over time are significant. In short, winning can't be as easy as a simple 'coin toss' EA, if something like 95%+ of retail traders lose.

Hence the ball is in your court to disprove all of this, and explain what you mean by "random systems", and how and why they can "work" for the retail trader.
I'd be delighted to be proved wrong; nothing would please me more than to have a simple mechanical system that's 100% guaranteed to provide me with a worthwhile, consistent, exponentially growing return throughout my lifetime, over all possible future market conditions.
  • #1,226
  • May 10, 2017 4:07am May 10, 2017 4:07am
Quoting TradeGenuis
One thing and one thing I have observed about life is that; It's hard to be simple. But simplicity is elegant, the most successful trading strategy are ridiculously simple. For one reason or another its so hard to be simple. One said simplicity is the ultimate sophistication. You usually get simpler and simpler with years at trying your hands at this business, persevere and your mind might one day receive illumination. Just ignore the tons of confused people who have no idea of what they are doing, they will mess you up. Another advice is that trading...
It's nice

but "simple" is misleading in that to understand something in its simplest form is to be very versed in it's complications...

I like the Lion Cheetah and Elephant metaphor too

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Time hides Nothing
  • #1,227
  • May 10, 2017 4:10am May 10, 2017 4:10am
Quoting hanover
{quote} Agree with your above statement, but...... {quote} There may be instances of traders who've gotten lucky for a time with coin toss entries, but I think it's fairly easy to prove that random systems aren't long-term profitable. Because, if they were: 1. Institutions, managed funds, prop firms etc could save themselves millions in salaries by dismissing all of their highly paid analysts, economics PhDs, veteran traders, math and IT experts etc etc, and replace them with a coin toss. The whole industry would have moved away from TA and FA long...
The market is random, but the system logic cannot be random if it's profitable.
A random system makes no sense whatsoever ..
  • #1,228
  • May 10, 2017 4:19am May 10, 2017 4:19am
Quoting hanover
{quote} . But if attaining an edge was that easy, then all retail traders could simply run a suitable EA, and effortlessly retire rich: then either the market would cease to become (pseudo) zero sum, which is of course unthinkable; or big players and market makers would institute appropriate countermeasures. And if it's not as easy as a simple EA, then there must be some kind of rationale involved, which means that the system is no longer random. Even if there was a small edge provided by 'fat tail distributions', it must also be large enough to...
lol that's a great post/// I guess it's a game not of red and black checkers but different pieces like chess... You first need to know the rules you then need to strategically make the right decisions. All while you're opponent is doing the same thing.

This is too much for most people, simply put they are illiterate. No one has taught them to read. Maybe they talk but the market yells back at them, they said something wrong they don't know how to reply respectfully because they are inherently illiterate, or they don't know the rules

How can you code a human brain? In the real battle that is what it is like but our super-robots who arbitrage and are playing in some battle ground that exists for just a blink of an eye don't need to concern themselves with such deep logistics. For us humans however, we can learn to read

and respond, and reply, and be respectful

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Time hides Nothing
  • #1,229
  • May 10, 2017 4:22am May 10, 2017 4:22am
Quoting Mingary
{quote} The market is random, but the system logic cannot be random if it's profitable. A random system makes no sense whatsoever ..
humans are random... The market is just there

Rules apply
Time hides Nothing
  • #1,230
  • Edited 10:45am May 10, 2017 4:31am | Edited 10:45am
Quoting hanover
{quote} Agree with your above statement, but...... {quote} There may be instances of traders who've gotten lucky for a time with coin toss entries, but I think it's fairly easy to prove that random systems aren't long-term profitable. Because, if they were: 1. Institutions, managed funds, prop firms etc could save themselves millions in salaries by dismissing all of their highly paid analysts, economics PhDs, veteran traders, math and IT experts etc etc, and replace them with a coin toss.
David,
Are you so sure that random systems aren't long-term profitable? That the "edge" in profitable trading is "simply" cutting off the losers (many) quickly and letting the (few) profitable trades run? I emphasize "simply" because in order to do that long-term, how many retail traders-myself included- have the necessary strong psychology to adhere to a profitable system that has a very low win rate? I just re-read Faith's book ("Way of the Turtle") and he states that the few successful Turtles were the one's that held strictly to the "rules" set forth by Dennis, i.e. they didn't let their emotions override the rules. And even then, as you stated, the Turtles were only exploiting the rare Fat tail trades, i.e. essentially random entry, because it really didn't matter the method used to enter a trade but rather how the trade was handled once opened... a trading system where out of the hundreds of trades taken in a year, only a handful provide the net positive income. In addition because of the psychology involved to adhere to the rules, not all of the members of the Turtle classes went on to become successful traders. Even Dennis stated in "Market Wizards" that 95% of his money- at that time ~800 million USD - was made on only 5% of his trades. Think about it... 5% of his trades made enough money to overcome the hundreds of millions that he lost while providing an 800 million USD profit.

I'll state this again, can you imagine anyone on FF (or 95% of retail traders) adhering to a system having a win% of <30% with substantial draw downs, but in the end, ending net positive? Could Institutions allow their traders to handle such equity swings? Is psychology and the ability to adhere to the simple adage of cutting losers and running winners more important than the method of entry?

Edit: I would think that an EA which successfully exploited Fat Tails would be abandoned rather quickly by any retail trader due to an abysmally low win rate.
  • #1,231
  • May 10, 2017 5:26am May 10, 2017 5:26am
Quoting CrucialPoint
Farewell and Good-Bye FF {quote} And so shall I... I've said good bye once, twice... I guess this will be the third and final good-bye (not due to FF or other OP)... I wish everyone the best and good luck in their trading. DO NOT GET SCAMMED Farewell and Goodbye. Peace, CrucialPoint
thank you Sir for you generous time , it is , it was and it will be always thankfullness from all of us Sir. it was a pure pleasure to know a human exists like you Sir. my best of the bestest wishes with you always , may all your desires ,all yours dreams beg you to get fulfilled .
thanks a lot Sir , thanks a lot.............................................................................................................................................................................
i wish you lot of happiness Sir
a lot of great time
a lot of happy happy time
a lot of good family time
a lot of yours time Sir
thanks thanks thanks ................thanks a lot .............thank Sir thanks so much ...................thanks
all the best
Sir u are awesome
thanks
  • #1,232
  • May 10, 2017 5:33am May 10, 2017 5:33am
Quoting CrucialPoint
Farewell and Good-Bye FF {quote} And so shall I... I've said good bye once, twice... I guess this will be the third and final good-bye (not due to FF or other OP)... I wish everyone the best and good luck in their trading. DO NOT GET SCAMMED Farewell and Goodbye. Peace, CrucialPoint
ff says i can't have more than 100 emoji in single post for you Sir, forgive them Sir
  • #1,233
  • Edited 9:04am May 10, 2017 8:29am | Edited 9:04am
Quoting davelansing
That the "edge" in profitable trading is "simply" cutting off the losers (many) quickly and letting the (few) profitable trades run? ........
Dave, thanks for your reply. I understand the basis of trend-following and the associated psychological difficulties involved with drawdowns. I guess I was wondering whether the Turtles' performance had been emulated by any retail forex traders (I seem to always be reading the generalization that that FX prices range something like 80% of the time; hence the few winners would need to be very large), or whether they merely happened to stumble upon an era, and asset classes, that were 'trending' strongly. I queried this point again here.

I understand that institutions operate to different agendas; and also that others have argued that TA/FA is still used because it can potentially deliver an even better result than coin toss. Back in 2013 my friend mim2005 wrote and backtested some EAs across 6 years of EU data (more here), using vaguely Turtle-like exits, but was able to get a positive result only by combining these with some definitively analysis-based entries.

Forums are full of unsubstantiated claims, hence I'd be interested to see some actual, as opposed to merely anecdotal, results. I'd be curious to see some hard evidence of any retail FX traders who have attained a positive result on a live account, over the last decade, by genuinely basing their decision to enter (buy or sell) on a random process, and nothing else besides.

David

Quoting Mingary
The market is random, but the system logic cannot be random if it's profitable
My understanding was that if markets were completely random, then nobody could be long-term profitable by systematic means; at least that's what gaming theory postulates.

In myth #22 here I listed a few reasons why I believe that FX price movement is not completely random.
  • #1,234
  • Edited 9:44am May 10, 2017 9:30am | Edited 9:44am
Quoting hanover
{quote}Dave, thanks for your reply. I understand the basis of trend-following and the associated psychological difficulties involved with drawdowns. I guess I was wondering whether the Turtles' performance had been emulated by any retail forex traders (I seem to always be reading the generalization that that FX prices range something like 80% of the time; hence the few winners would need to be very large), or whether they merely happened to stumble upon an era, and asset classes, that were 'trending' strongly. I queried this point again here....
"My understanding was that if markets were completely random, then nobody could be long-term profitable by systematic means; at least that's what gaming theory postulates."

it's possible to build charts with random data and it is amost impossible to distinguish which is market and which is random. Therefore a system can be applied to random data with the same result than market data.
Therefore - profitable or not - the system result will be the same for random or market. If there is a non-random element, it cannot be reliably predicted, might as well consider all moves as random.
  • #1,235
  • May 10, 2017 10:21am May 10, 2017 10:21am
Quoting Mingary
{quote} "... it's possible to build charts with random data and it is amost impossible to distinguish which is market and which is random. Therefore a system can be applied to random data with the same result than market data. Therefore - profitable or not - the system result will be the same for random or market...
My observations tend to concur with that.
  • #1,236
  • May 10, 2017 10:24am May 10, 2017 10:24am
Loser's complaining every thing winner focused on winning....
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Trade fearless not careless...
Syed Mohsin Ali Profit This Month: -2,370
  • #1,237
  • May 10, 2017 10:30am May 10, 2017 10:30am
Quoting RondaRousey
{quote} Easy to assume the market is random but it is not because it is manipulated. The invisible hand is at work.
If the hand is invisible then it cannot be tested (therefore unpredictable) .. might as well not consider it (:
  • #1,238
  • May 10, 2017 10:47am May 10, 2017 10:47am
Quoting Mingary
{quote} If there is a non-random element, it cannot be reliably predicted, might as well consider all moves as random.
That's the thing.....where I feel the opportunity lies is in the possible small amount of non-random behaviour that in general is overlooked by a trader seeking the thrills. If there is a small presence of non-random price movement in an otherwise random price series, then like a casino with a small house edge, you can capitalise on this feature by busting through the randomness with a large sample size. For example, if I can find an array of long term return streams with a small edge (say 1-2% each on average over say the last 16 years under an array of market conditions) with a max drawdown of between 20-30% or an annualised sharpe of say 0.2 for each return stream, then like a casino (where each return stream represents a slightly biased roulette wheel), I can compile an array of uncorrelated return streams across diversified instruments, timeframes and systems to bring home the bacon with attractive risk-weighted returns that might not meet the approval of an adrenalin junkie...but would be considered competetive against alternative investment options. I am approaching this game as the casino as opposed to the punter.
  • #1,239
  • May 10, 2017 10:51am May 10, 2017 10:51am
Quoting Copernicus
{quote} That's the thing.....where I feel the opportunity lies is in small amount of non-random behaviour that in general is overlooked by a trader seeking the thrills. If there is a small presence of non-random price movement in an otherwise random price series, then like a casino with a small house edge, you can capitalise on this feature by busting through the randomness with a large sample size. For example, if I can find an array of long term return streams with a small edge (say 1-2% each on average over say the last 16 years under an array...
What if that tiny presence is made large in some way by flushing through a large throughput ?
  • #1,240
  • May 10, 2017 10:59am May 10, 2017 10:59am
Quoting skyway
{quote} What if that tiny presence is made large in some way by flushing through a large throughput ?
Yep...that would be my take on what some of the HFT outfits attempt to do. Simply work on the principle that non-randomness will emerge through the Law of Large numbers :-)
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