Thread: How to keep in faith with a statistically profitable system?

Originally Posted by ;

You were able to obtain a system with a 99% failure rate? Please share it. Be good to take the opposite side of these trades

I can provide you a simple system with 99% failure rate: click buy, then click market IMMEDIATELY

Replace market with close at a non-FIFO account.

However, You're correct in principle: any 99% failure rate system which doesn't lose strictly because of the spread could be a gold mine, at least until the market changes back and it starts losing just 50% of the time

Originally Posted by ;

So I like to have a trading system that works in all markets, OR I will spot when the market is going to go into the market conditions that produce losses so that I can stay out during this time. Develop a means to ascertain when the market will input the conditions that produce profits. It can be tough, but attainable.

I must agree with grkfx. Tdion, you are stating you have a system which works in some market conditions and not others. Well, you need to incorporate rules in your own system which make sure when conditions are great for whatever kind of system you are using, you are only trading.

I've a completely systematic means of trading; I consider each and every trade that meets all my principles, and a few of these rules keep me out during certain periods or when conditions (volatility, etc.) exist which have demonstrated bad for my platform in the past.

Of course market conditions can always change with time, but you want to think about what never changes, what always happens in the market. My system is based and have never changed, unless of course the entire world adopts one currency and trading entirely becomes nonexistent. Anyhow, I'm not here to discuss my personal egy, but I'm just tired of people saying you can not successfully trade the place fx market, or that it is just gaming, because advice like this was discouraging to me once I began, I know it is possible to be successful.

Anyhow, all I'm saying is you're able to embrace the mindset that it's all a crap-shoot and random, and no one can win, but I believe that is a self-limiting mindset which will hurt your ability to become open-minded and find profitable ways to trade the markets. Of course a mentality like that makes you feel great that you are aware that it's impossible. . But wouldn't you rather have a complete bank account?

I respect your comments and am not trying to party, I just want to offer a distinct perspective.

Originally Posted by ;

You were able to find a system with a 99% failure rate? Awesome, please share it. Be good to take the other side of those trades

It is a fairly easy system, however impossible to reverse.

Basically, get in, place a tight SL and greedily drama for 200 pips, 99% of the time your SL will hit or your money back.

Originally Posted by ;

grkfx strikes the nail on the head, IMO.

You need to get an edge that's somehow grounded in a comprehension of the hows and whys that drive price movement, or the price patterns which are made as a consequence; or another method based on robust abstracts, e.g. trend, S/R, momentum, volatility, significance, economic trends and motorists.

Anything else, over a large enough sample size, is nothing more than an exercise hit or miss, and the transaction costs will eventually defeat you. Hence I agree with: it is no better than gaming....

I enjoy your horse racing analogy. I've spent years of effort on historical evaluation on blanket color, which we were told it is important and vital to the profitability. Until I notice I was leaded into some direction I found nothing. Information mining/optimization is helpful, provided that if you're doing it weight carried, jockey's experience, and barrier draw.

All the horse analogy and I disagree, it assumes that data-mining has to be dumb and can have no insights. You can be successful with a pure data-mining strategy (I have 15 years of experience doing so )

The dilemma is that you will need to find methods to distinguish correlation from causality. You will find systematic and definite means of doing this you generate.

Originally Posted by ;

I disagree with all the horse racing analogy, it supposes that data-mining needs to be idiotic and can have no insights to causality. You can be successful with a pure data-mining approach (I have 15 years of experience doing this) The problem is that you will need to figure out ways to distinguish correlation from causality. You will find systematic and clear ways of doing this you generate.

Oh yea. This is something that I would prefer a lot to know about! [The clear and systematic ways of doing this...]

Would you suggest some reading?

Interesting posts you are spreading around, BTW!

Originally Posted by ;

Would you suggest some reading?

If you already have good knowledge about basic data I would suggest researching about data-mining on artificial data (artificial information created with all the statistical qualities of a given financial time series), that should keep you occupied for a couple of decades. Good luck.

Originally Posted by ;

quote If you already have good understanding about basic data I would suggest exploring about data-mining on synthetic data (artificial data generated with the statistical qualities of a specified financial time series), that should keep you busy for a few years. Good luck.

Thanks, partner, to have pointed to the ideal direction.
I think I absolutely know what you mean, and, if your best whishes don't recognize as simple as you describe them out, I believe it could take a bit under a few years.

Bye

BL

Originally Posted by ;

Dear fellow traders, I have a question adhered and still can not figure it out by myself, perhaps I did not learn enough about probability math. This question is made for any quants, please help me with this we go: Let us say we've test our system for once, say it 100 trades, and we got 90 winning trades and 10 losing trades (so we've simply 90% winning and 10% shedding in percent terms) Then, we run the machine from the live account, and unexpectedly ,we have like 30 successive losses. In accordance with our system it had been 10% of failures,...

The way to maintain the faith when there are large number of losing trades in a row using a mathematically profitable system?

As soon as the losing trade's losses are merely a small fraction of their winning trade's profits. For example your 100 straight losing trades shed 5 pips each time but your 1 trades win 1000 pips or more. That's the way you maintain the faith. As soon as you can work out how to make money with win rates and high losses you're in a high degree of trading. Focus on making money not win rates.