All Systems lead to Failure?

[oiltanker]

in business once you lose your edge you either get taken over or go out of business. how many big firms from 50 years ago are still around?

on a different reflection the current financial system is a failure? because it has no moral hazard?

 

[Christiaan]

My recommedation look at fx stealth.Sort of expensive but it works.It's been on the market a couple of years so if you google it you will find no sortage on reviews.

 

[Black Swan]

Not 100% sure if I agree with this. I understand why you would say this, but I think the condition you are imposing is too strong. Perhaps a weaker condition, such as, if the system fits your psychological style, then it is possible to trade it even if it is someone else's system.

An example: When I started out trading U.S. stocks, I thought the only way I could ever succeed was by trading a purely mechanical system. So I experimented with eSignal's Advanced GET system. This system plotted a regression line on a trend, surrounded by two 5% confidence intervals. The concept was simple: if a candle closed outside of a confidence interval, it would initiate a trade. I took two trades with the system and both were profitable. After that, I never touched it again. Not because I was scared but because having studied statistics and finance extensively in university, I knew there was no way this system could work. The very assumptions of the regression model never held in financial markets. So, whilst I was able to follow the rules to a tee, my mind was simply telling me that I was getting lucky. So, psychologically, I could not handle the system. I then looked for other mechanical systems, but I just could not believe any of them could give me an edge over the long-run.

At that point, I decided that non-mechanical trading systems suit my personality. Then I started using another person's system of tape reading and after some practice, I started getting a hang of things. I felt comfortable with this way of trading, even though it was much tougher than simply following a set of chart rules.

So, in both situations, the trading systems are not mine, but I've found one that I am able to accept psychologically.

That's why I don't think you can outright dismiss the potential of trading someone else's system, but you've got to find one that suits your personality.

Is this post meant to be ironic as you've actually re-inforced Meanie's viewpoint rather well.

 

[amit1986]

Is this post meant to be ironic as you've actually re-inforced Meanie's viewpoint rather well.

Not really...I haven't disagreed with him, but I don't necessarily agree either. He completely dismissed the possibility of trading another person's system, even if it suits you psychologically. I don't think that's the case.

 

[meanreversion]

Not really...I haven't disagreed with him, but I don't necessarily agree either. He completely dismissed the possibility of trading another person's system, even if it suits you psychologically. I don't think that's the case.

Well, after I wrote that sentence I was about to go on and clarify it, but then I thought "what the hell, I'm nearly 40, it's about time I started making unequivocal and contentious remarks".

 

[oiltanker]

Elissa is that like nose pickings?

 

[Zod]

Any trading system based on technical analysis is destined to fail.

 

[HowardCohodas]

Any trading system based on technical analysis is destined to fail.

Pretty bold statement for a guy with 3 posts. Care to elaborate?

 

[Pazienza]

Pretty bold statement for a guy with 3 posts. Care to elaborate?

I think it could be shortened instead of elaborated:

Any trading system is destined to fail.

That is true almost without exception. If new traders could be made to see that, they would save themselves a great deal of money and trouble.

And what difference does his post count make?

 

[meanreversion]

I think it could be shortened instead of elaborated:

Any trading system is destined to fail.

That is true almost without exception. If new traders could be made to see that, they would save themselves a great deal of money and trouble.

And what difference does his post count make?

You should email Bluecrest ($8 billion under management) and Winton ($16 billion under management) immediately. Both of these successful hedge funds run trading systems, you should let them know they're doomed.

 

[Pazienza]

You should email Bluecrest ($8 billion under management) and Winton ($16 billion under management) immediately. Both of these successful hedge funds run trading systems, you should let them know they're doomed.

I'm talking about retail traders - I didn't state it explicitly but I thought it was fairly obvious, so sorry if it wasn't. I did clearly state that there are exceptions.

Let me try to clarify: for the overwhelming majority of retail traders, systems will only lose them money.

 

[HowardCohodas]

And what difference does his post count make?

Has to with establishing your bona fides. Otherwise, how do I know whether or not his advice is gold or dross.

 

[meanreversion]

I'm talking about retail traders - I didn't state it explicitly but I thought it was fairly obvious, so sorry if it wasn't. I did clearly state that there are exceptions.

Let me try to clarify: for the overwhelming majority of retail traders, systems will only lose them money.

What you've regurgitated is the usual tired, throwaway comment about systems.. it's as much use as the "no-one would ever sell a profitable system" line.

So to recap, retail traders should avoid mechanical trading, they should avoid TA as well. So what's left, fundamental trading? I'm sure most retail traders would thrive with that approach.

 

[Pazienza]

Has to with establishing your bona fides. Otherwise, how do I know whether or not his advice is gold or dross.

You could attempt to evaluate the advice. The sourse doesn't really affect it - good advice from an idiot is good advice, and poor advice from a sage is poor advice.

Besides, all forums have plenty of members who have huge post counts and little of value to say.

 

[Pazienza]

What you've regurgitated is the usual tired, throwaway comment about systems.. it's as much use as the "no-one would ever sell a profitable system" line.

So to recap, retail traders should avoid mechanical trading, they should avoid TA as well. So what's left, fundamental trading? I'm sure most retail traders would thrive with that approach.

It might be tired, but it's almost invariably true. I agree that most of what people mean by TA (the endless indicators and so on) should also be avoided. However, if you lump things like support and resistance in with TA, then I think that some aspects of TA are fundamental to success. I personally would advise short-term retail traders to ignore fundamentals almost entirely.

 

[HowardCohodas]

You could attempt to evaluate the advice. The sourse doesn't really affect it - good advice from an idiot is good advice, and poor advice from a sage is poor advice.

Besides, all forums have plenty of members who have huge post counts and little of value to say.

My time is valuable. A larger post count is not "in and of itself" proof of reliability of advice. However, over that period of time I will have read many of his posts and formed an opinion on whether the advice is worth my time to evaluate.

So far you have made a poor impression. If you want to be taken seriously, you might reevaluate your approach.

 

[Pazienza]

My time is valuable. A larger post count is not "in and of itself" proof of reliability of advice. However, over that period of time I will have read many of his posts and formed an opinion on whether the advice is worth my time to evaluate.

Again though, the advice might still be worthwhile, even if it's the first sensible utterance of that person's life.

So far you have made a poor impression. If you want to be taken seriously, you might reevaluate your approach.

I'm not sure why - I can't think of anything that I have posted that is incorrect, although feel free to point out anything you can find.

It makes no difference to me whether I'm taken seriously or not. But you seem to have a negative attitude towards new posters, imagining perhaps that they should show deference to people who have been posting here very slightly longer than them, despite the fact that this fact reveals nothing about their relative levels of experience or success.

You come across as slightly pompous, and might want to re-evaluate your approach .

 

[HowardCohodas]

I'm not sure why - I can't think of anything that I have posted that is incorrect, although feel free to point out anything you can find.

It makes no difference to me whether I'm taken seriously or not. But you seem to have a negative attitude towards new posters, imagining perhaps that they should show deference to people who have been posting here very slightly longer than them, despite the fact that this fact reveals nothing about their relative levels of experience or success.

You come across as slightly pompous, and might want to re-evaluate your approach .

One last try before I just ignore you.

Such statements as I highlighted in red show your shallow thinking. How could you know my attitude toward new posters except in your circumstance. Some have come out of the box as stars and show it immediately and I follow them with enthusiasm.

But since you "don't care" about your reputation, this will likely be ignored as well.

No problem for me.

 

[Zod]

Has to with establishing your bona fides. Otherwise, how do I know whether or not his advice is gold or dross.

I couldn't care less of what you think of my opinion, but I'll elaborate anyway. Why do I believe systems based on technical analysis are destined to fail? Simply because there are no axioms in TA. By this I mean no two (or more) technical indicators result in the same outcome in market movement every single time. If there were ever a case of axiom trading then TA traders would be raking it in; it’ll be akin to finding a new law in physics or chemistry, where you’d know the outcome 100% of the time, but it’s not. Given the fact that TA trading is at best based indicators used to form educated guesses, it is more than likely any system based on TA must have its parameters changed through time – hardly a definition of a system.

The best systems are ones which are governed by constants, but since nothing is constant in the markets every system will have to change at some point. Here lies my point; the only constant (or system) is the trader himself – his discipline and his emotions. If you can keep the two at a constant then you are more likely to be successful in trading instead of wasting your time searching for the holy grail.

PS: Silence is Golden. My post count is not a reflection of my trading experience. Intelligence should tell you this.

:smart:

 

[Pazienza]

One last try before I just ignore you.

Such statements as I highlighted in red show your shallow thinking. How could you know my attitude toward new posters except in your circumstance. Some have come out of the box as stars and show it immediately and I follow them with enthusiasm.

But since you "don't care" about your reputation, this will likely be ignored as well.

No problem for me.

How could I know? Are you serious? I was responding to you berating another poster with a low post count - you seemed to be implying that he shouldn't make statements in the way that he did, just because he was new. You have shown the same negative attitude to two new posters in the space of a few minutes, then a few minutes later accused me of only having my own case on which to judge.

Is your memory really that bad?