Day Trading & Forex Forum

TWI

I see many hundreds of systems posted at collective2. I am not sure that you will make money looking there but it may give you some ideas about creating your own.
It is not about finding a profitable system it is about understanding a methodology to the extent that you can stick to it when the rough times come along. The only way you will do this is to develop it yourself.

__________________
"I refuse to tiptoe quietly through life
only to arrive safely at death"

Chorlton

IMO, NO system and I mean NO system will work forever. How will you know when the latest one you have bought is broken?? If you start trading it and it immediately goes into a drawdown, will you have the confidence to keep trading it? How will you know that you should keep trading it? Basically, You don't !!!! IMO, the worst thing you can do is purchase a "black-box" system and trade it. IMO, what you should do instead is either:

1) Find someone to manage your money for you. You give them the responsibilty to try to turn a profit and by doing so, you accept that you have no responsibility in the outcome. How you decide to do this is up to you. There's absolutely nothing wrong with this approach if you don't have the time or interest to develop your own. In comparison, by trading a "black-box" system one believes that they have control over the decisions made but in reality they don't. The system generates Buy and Sell signals and they have no idea why. This IMO, is very dangerous.

2) Develop your own System. This is not as daunting as it may sound. But it does take time and interest in what you're doing. Personally, I develop my own systems. As a result, I know why they make money and why they might not. I know how long a drawdown I can expect in advance. I have FULL CONTROL over my trading decisions and as such my emotion can be controlled.

Sorry, but this statement is totally wrong. Someone who has correctly developed a system will NOT lose money "perfecting" it. This would have been done in advance using backtesting and forward testing methods. Only once a high level of confidence in its future performance had been obtained would it be tested using real money.

Chorlton

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A Fine is a Tax for doing something wrong. A Tax is a Fine for doing something right !!

Return of Capital should always be more important than Return on Capital

TheBramble

pugwash, if you develop your own system (and I encourage you to do so as it really is the only way) and it turns out to be a blindingly successful winner, why would you want to get into all the non-core activities of marketing, packaging, advertising, administration etc? You’d simply trade it, wouldn’t you?

Wait until it stops working THEN get into all that other stuff. That's what many vendors of packaged systems did and still do. They started out as traders.

The other benefit to developing your own trading system is that you get the skills you'll need to develop new ones as each one of your creations goes through (some never to return in your lifetime) their 'quiet spell'…

Markets change. Some over remarkably short periods of time. Stay light on your feet. Develop simple systems that work NOW and don’t get married to them. There’s a lot written about being prepared for the ‘inevitable’ string of losses and staying with your system through the drawdown periods and giving trades time to mature. There’s significantly less on how to design into your systems a method for establishing that your system still works in the market upon which you are applying it.

I’m far keener to constantly assess ‘The Markets’ for changes in conditions than tinker with my methods or systems. I don’t expect many losses, certainly not consecutive losses. When I do get into that situation (which I did fairly recently) it is my ‘exit signal’ for the system, not just the trade. The question you will then need to ask yourself is, do you work with the bare bones of what you were using or go for something entirely new. Resist the temptation to assume there is just one right answer to that question.

damianoakley

Hi Pugwash,

I would say that there are literally hundreds of trading systems out there that work and will make you money.

Finding a trading system that works is not the issue.....finding a trading system that suits your personality and then having the discipline to stick with it are the two main issues that make trading such a difficult business to get into.


Good Luck,

Damian

TWI

I think people starting down the systematic route do not fully appreciate the importance of this statement. If you are not totally comfortable and well informed about how your system is working then I would not think you have a hope of sticking with it.

__________________
"I refuse to tiptoe quietly through life
only to arrive safely at death"

damianoakley

Hi TWI,

I think that's very true.

There are probably tons of black-box entry systems that make money if they are operated correctly with good money-management and sound exit principles.

The difficulty comes when the system hits a bad run of results, which every system goes through at some point.....during that bad run, it becomes very difficult to maintain the discipline to carry on trading that black-box system - you start to lose faith in the system because you don't truly understand how it works and the rules on which it is based.

It is much easier to discipline yourself to trade through a losing run if you truly understand the workings behind your system, which is something you can't possibly have when trading black-box entry signals blindly.


Thanks

Damian

fanzy45

Hello every one i am glad to be a part of this group and i hope that my participation in this forum will lead me to the holy grail i'm searching for.

pugwash

Thank you for your wisdom TwI