Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.


Automated Trading...algorithmic Trading..system Trading

Recommended Posts

There are a lot of chart pics and videos about system performance

results floating around all over many vendor websites. Many of the

reported replay results are phenomenal. It seems every video you see is

a winner. For some magical reason the sensitivity setting was just

perfect for that day, the money management was perfect for that day, and

the results were just perfect for that day and it was the same instrument.


The most amazing thing, however, is that on each day the settings for system sensitivity

were different. The range chart bar or time size was different. The target and stops

were different. Gee...how did the system know which sensitivity to use

for each day, and how did it know to adjust the targets, and how did it

know to change the range bar size? Intriguing questions. Simple honest

answer is that the system did not make these decisions, the user

(vendor) did. So, how did the user know? Simple honest answer is the

user did not know. But Market Replay is a wonderful thing. With it you

already know what kind of day is was, so all you need to do is adjust

the sensitivity, adjust the targets, adjust the range bar chart size and

viola! you have another perfect day.


Do not be so naive and gullible to believe that a system that has $1500

to $2000 winning days trading a 2 lot is a consistently real thing. It

is a hindsight result, with a lot of adjusting gone into the settings to

make it work perfectly. Also, did you get the part about the $500 intra

day draw down? Remember you are trading a 2 lot. Do you think such a

draw down is a realistic amount for the number of contracts you are

trading? since that draw down is way over 2% of any

reasonable 2 contract trading account. Ask yourself that if at 11am you

are up $300, and then at 1:30 you are down $500, would you still be able

to continue? Would you trust the market to give it all back to you, and

get you back into profit when all you have to go by is hindsight

results? So, unless you are a hindsight trader, market replay results

are almost completely useless.


What you need to know you will never know. You can not know in advance

what kind of day it will be. You can guess. Or, you can have a stable

consistent sensitivity setting, use a consistent range bar chart size,

use a consistent risk reward plan, and then run the system day in and

day out and see how it performs.


Look for real time results posted in real time, the same day before any

replay was possible. Or better yet, look for long term consistent

results with the same instrument, same sensitivity settings, same range

chart size, same risk reward plan. Then you can gauge the realistic

potential, the realistic intra day draw down, and the realistic

performance over time, in real time.

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Create New...

Important Information

By using this site, you agree to our Terms of Use.