Random Pick System - Can you beat it ? -Experiment.

[minx]

I carried out an experiment a little like this last year. I asked 3 friends to pick 5 numbers between 1-100 and matched the number to the alphabetical position in the FTSE100. All 3 of them beat the FTSE Index. This year I have done the same thing except I picked 5 number snad am tracking them throughout the year, so far up a few %.

 

[adrianallen99]

I found an economic paper that did a similar test, but randomly picking up or down on the indicies.
They compared their random system to a commerical system and a freely available system.

The free system beat the random system by 0.2% and both beat the commercial system by around 10%. With correct money management both the random and free system made a small profit. The commercial system did not.

 

[*JDR*]

Ahhhh... Just tried to sell short for the first time and the "game version" that I am in doesn't allow it.

 

[damianoakley]

Hi JDR,

Just seen your post above being unable to play short.

I recommend to all my clients that they use VirtualStockExchange.com for paper trading, although that is for U.S. Stocks only. The site is free to use and you can go long or short.

Don't worry, I am in no way affiliated with them - just thought it might help!


Good Luck,


Damian

 

[AlexBB]

I think its a very interesting system - but haven't you overlooked your exit strategy for each stock that has moved in your favour.
I mean - should there not be a rule which states when exactly you will close each profitable position ? As I understand it you will close each profitable position whenever you feel you have enough profit...but that undermines the whole purpose of system trading which is to eliminate all the emotional pitfalls ?

I am thinking of ways to develop your idea a bit further along this path.

Thanks
AlexBB

 

[*JDR*]

I think its a very interesting system - but haven't you overlooked your exit strategy for each stock that has moved in your favour.
I mean - should there not be a rule which states when exactly you will close each profitable position ? As I understand it you will close each profitable position whenever you feel you have enough profit...but that undermines the whole purpose of system trading which is to eliminate all the emotional pitfalls ?

I am thinking of ways to develop your idea a bit further along this path.

Thanks
AlexBB

Thanks alex. I have sort of abandoned this for now due to being swamped at work (yes, unfortunately I still have to work) and the platform I was using not being great. When I get set up correctly I will return to this topic and see if I can back test and forward test a "random" system with some set rules.

 

[*JDR*]

An update of sorts. Just logged into my paper account.... and I seem to be up.


Account Value (USD): $102,172.97 Buying Power: $80,766.82 Cash: $59,360.67 Rank: 2575


DE DEERE & CO +7.68%
FPL FPL GROUP INC + 14.14%
JPM JPMORGAN CHASE & CO+4.71%
APL ATLAS PIPELINE PRTNRS LP +5.73%

Account Details
Interest Paid: $0.00
Interest Earned: $121.97
Total Commissions: $229.78

 

[cronian]

Put money into it

Paper trading is fake. Why don't put some real money into it? If you are currently investing any money in the stock market, this system probably isn't any riskier that what you are currently doing.

An update of sorts. Just logged into my paper account.... and I seem to be up.


Account Value (USD): $102,172.97 Buying Power: $80,766.82 Cash: $59,360.67 Rank: 2575


DE DEERE & CO +7.68%
FPL FPL GROUP INC + 14.14%
JPM JPMORGAN CHASE & CO+4.71%
APL ATLAS PIPELINE PRTNRS LP +5.73%

Account Details
Interest Paid: $0.00
Interest Earned: $121.97
Total Commissions: $229.78

 

[bonox]

Yeah. I read that book by Van tharp. It's true in most sense. Money management is key.

 

[bonox]

Use this site (www.stockalicious.com). They allow short selling.

I'm not sure whether VirtualStockExchange.com allow short selling. Haven't use it before.
I usually use stockalicious and marketocracy. marketocracy is a bit harder to use for short selling. for non-short sell though, it's great.

 

[bonox]

Paper trading is fake. Why don't put some real money into it? If you are currently investing any money in the stock market, this system probably isn't any riskier that what you are currently doing.

It's good to paper trade for at least 3 months to work out the kinks of your trading strategy. Thereafter, then you migrate to real trading.

 

[zentrader22]

It's good to paper trade for at least 3 months to work out the kinks of your trading strategy. Thereafter, then you migrate to real trading.

...but it's always better to run some monte carlo simulations between papertrading and the move to real trading!

I call this an optimized system trading development process...

bye,
zentrader
www.zentrader.de