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sergso
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Posts posted by sergso
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There needs to be another line titled : I do not use indicatorsSome of us only use price to tell us what to do , not some line crossing another line at some random place on a chart.
+ for this comment........
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Trend following no longer makes good money. Maybe a little money but not good money. Just look at the CTA indices for the last years. There is no better proof than that.
BarclayHedge | Barclay CTA Index
This is sh***ty performance after 2009. S&P 500 has gone up about 120% in the same period these trend-followers have not even made CD returns. Forget about backtesting and things like that just look at the index of these CTAS. Most are following turtle-like methods. They were not able to even trend follow the S&P 500 that even a fool can buy and hold through SPY and make tons of money.
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What about cases that the method does not work meaning that the pullback does not happen but the stop is taken out and the market reverses to make new highs?
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Best time to trade is when there is free money left on the sidewalk. If you want to trade seriously you must be ready to do so 24 hours a day.
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a better book IMHO can be found here. I have read and worked on a lot of the other gumpf and while they make good reading I wish i had this book right at the start.If these guys know anything about trends then why did they make a new forum in which they wonder what has happened to trends and why old trend trading methods do not work? Just check it out.
Try to backtest his rules:
"Enter long positions on a new 50 day high. Vice versa for shorts. Go with the breakout and ride the trend. Nothing else. Signals are generated on daily closing data and the trade taken on the open the following day
Exit on three average true range moves against the position from its peak reading. ."
These are like very old turtle rules and have not worked for a while other than on purposely selected cases on hindsight. I mean everyone writes a book when his trading method fails. It is irrational to write a book about a method that works. Think about it.
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Hi Sergio,I see you come from Greece.
Smart people , the Greeks.All that bail out money and when they default in 3 years time, they'll get some more.
Do you trade for a living ?
kind regards
bobc
I am half-Italian living in Greece married to an Albanian. I trade for 15 years in front of the beach.Making a lot of money. Wait for Italy and France to default. Then America. But the beach will still be here. Ciao.
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The joke is on you if you believe that.Price doesn't always determine value.
Sorry but anyone who thinks that publicly available information priced at $20 will make any returns is a joker: Better chance to play lottery.
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Hi sergsoI think this adaptive system costs $5000.
Thats excessive
You can buy a book "Trend Following " by Michael Covel for about $20 that will do the job.
regards
bobc
Not for buy but it is good to see the general idea and performance.BTW Covel stuff is 30 years old ideas. I don't think anyone can now make money in the markets by reading a $20 book. :haha:
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The main challenge with the approach of using multiple indicators is that the trader lacks the basic understand of exactly what the indicator is supposed to indicate (a mathmatical or numerical measurement of [whatever] Even with this knowledge, it is even more difficult to trade because the trader does not have the confidence to enter trades due to the lack of consistency in the indicator's signal. In this case, the trader is using the indicator as a prediction tool, and is unlikely to wrap around any type of money management to control the risk, let alone understand the entry and exit process.Is it a consistent set of entries and exits? Or does it change with each setup? Are all the exceptions known before entering? These are just some of the more important aspects of real trading to consider. Multiple indicators usually add to the confusion of predicting market direction, not remove it.
Good points. I agree. I like to add the risk of missing the best trend when using multiple indicators.
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This is an article that talks about adaptation in trend-following. Does anyone know of some adaptive trend following indicator that can match the results of this study? I guess the difficulty is in keeping a high return while reducing the historical drawdown. -
Anyone who treats trading as a business would want to multiply their efforts as quickly as possible. There is no other liquid business in the world that allows the amount of leverage that stocks/futures/forex/etc derivatives offer. So with a successful trading strategy, I wouldn't see a reason NOT to use the extra buying power to scale as much as the mechanical limits allow..If you do not see a reason now see what happened in 2008 when investors on margin, not even traders, were liquidated just before the market bottom.
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Margin is a loan from the broker to buy stocks. Margin is also a percentage of notional value you need to deposit to trade a futures contract or a forex lot.
I try to avoid using margin as much as possible because if things go bad traders on margin lose everything they have made for many months or years in just one day.
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If you are good at trading dividends are the last of your worries. Good luck making 5% yearly on div yields. I guess that is a good strategy.Niko, dividends are not traded, they are handed to you as a bonus for staying invested for a long time. If someone bought the S&P 500 basket or for example VOO, the dividend payment is about 2.5% - 3% annually for the period in your chart. That is a lot of dough if someone invested millions and given that inflation has stayed low..
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...........Pip or miss:)
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Perhaps the market is tougher now, and yes you need a strategy, unless you wanted to invest 1 dollar in 2000 to get 1 dollar 13 years later.He forgot the dividend payouts. Typical mistake of a trader who never invested any money in stocks.
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Leverage is very dangerous and the cause of failure for most forex players. My rule is to never use more than 10:1 leverage.
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The in-sample data is the key component for testing your original strategy, finding its weak points and then optimizing the process to enhance the number of profitable trades. Since this is such a critical component of the original test, traders will usually devote a larger period of time to the in-sample data set. Once the system has been optimized, the system must then be applied to the smaller out-of-sample price data. An added benefit of this approach is that traders can compare the results between the two data sets. When similar performances are seen, there is a better chance for profitability when using the same system with a real trading account.You may want to read the first part of this article. If one backtests 10 systems and finds one that performs well when applied to both in-sample and out-of-sample data chances are the result was due to data-mining.
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Globex is a hard place to trade for me because of lack of liquidity at times. I prefer the CME futures and the well defined New York session:
http://www.cmegroup.com/trading/fx/g10/euro-fx_contract_specifications.html
I trade EC and BP futures and spot using data from CSI and my forex broker. My analysis is consistent with the open the broker provides.Also see this In the forex market, how is the closing price of a currency pair determined?
I use an automated tool to build systems for the futures and forex data.
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If you have 10 analysts working for you fundamental analysis may work.
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I have been a professional trader for 8 years and I say this not to be argumentative but helpful. The reason most traders fail is not psychological. They fail because they dont have an edge, This whole notion of "just follow the rules and you will make money" makes it easy for people to sell worthless systems and claim "the system is the least important part, just follow it and all the riches in the world are yours, the system isnt broken you are"Absolutely true and well said.
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[quote name=ed_inacloud;179959Now what would be useful is that if those that had a similar view about market randomness were allowed to share findings to see if it really is possible to beat it. Challenge it by all means but in a constructive way. I for one would like to be proved wrong' date=' if there's evidence that it's not random then post it and help us all out.
Ed[/quote]
Even if the markets are random you can stil make a lot of money by trading randomly even when you think you have a method. Click here and go to article "What you need to do to claim you are an accomplished trader".
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I used to use it on stocks trading alongside MACD and Stochastics, it wasnt that bad but i have to say my work used to be done without it using only MACD and stochastics ...Overall after my experience over the different market asset classes, i'd say fundamentals are always more important than technicals...
I agree but not for the next hour or even day. And deciphering importance and impact is not an easy job.
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Edge
in Traders Log
Hello gentlemen i need your guidance in determining if trading system posses some edge.i have been a scalper in commodities and i have incorporated a new approach which is sort of intraday positional trading and its possible to scale it up to 500 - 1000 lots based on my unscientific observations , unlike back testing or real time simulation i implemented it live on 1 lot straight away without any scientific approach , i am hoping i may get help in this forum who can conduct a thorough scientific dissection if it has some edge or its just fluke
The results are as follows - After 3 weeks
Number Of trades - 176
Winning trades - 86
Loosing trades - 90
Winning% - 49%
Loosing% - 51%
Average Win Amount - 1112
Average Loss Amount - 373
Average Win Trade Time - 76 Minutes
Average Loss Trade Time - 32 Minutes
Average Win/Average Loss ratio - 3.05
Profit Factor - 2.86
Expectancy - 355
Before starting i didn't used to measure any statistics and i found few online which i complied , used these formulas
Expectancy = (Probability of Win * Average Win) – (Probability of Loss * Average Loss)
Profit Factor = (Avg Win/Avg Loss)* Win%/(1-Win%)
My question is obviously there are traders who are more into statistics than myself , i need your help to see if my trading does have an edge
Regards
Based on what other people say who are considered experts, 176 trades for intraday trading is a very small sample. You might have been lucky simply speaking and the system has no edge. If you want to find out if you have en edge you will need to do some serious statistical work like for example is done in this blog for a daily system Significance of a System For Trading SPY | Price Action Lab Blog
Also if you can figure out your Sharpe ratio it will be very good. It must be > 1.
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Investors that find themselves falling in the more traditional category of fundamental analysis often have many criticisms for those regularly implementing technical chart analysis as a basis for trades. Generally speaking, these criticisms suggest that charts “have little to do” with the economic drivers influencing market valuations or that previous price action has nothing to do with where valuations will travel next. In essence, these investors will argue that past performance is not an indication of future market activity. In order for an assessment like this to be accurate, there must be an idea that technical analysis involves only lagging indicators. But is this entirely true? ...I read someplace once that all indicators are lagging because they use past prices.
Does Bernanke Deserve a Raise?
in General Discussion
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But Bernanke will make much more when he is out of the job delivering speeches