So where do you make YOUR money?

meanreversion said:
I simply LOVE being lectured to by someone who has been trading for less than half a year.. top condescension Howard :cheesy:
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I have been using money management principles for over 40 years when I started investing and making my own investment decisions. For me, investing vs. trading is a somewhat blurry line, but I would call my activities this year trading.

I've had many a student in my career in many different knowledge domains who pointed out weaknesses in some of my "articles of faith." Quite a humbling experience, that.
 
HowardCohodas said:
Quite a humbling experience, that.
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Yep, humility has value, too. Just like adversity. And here's another opportunity to quote the great American humorist, journalist, and cartoonist Kin Hubbard (who was much admired by Groucho Marx, the columnist H. Allen Smith, and the great radio satirist Fred Allen):

"I'll say this for adversity: people seem to be able to stand it, and that's more than I can say for prosperity."

When I was younger I didn't grasp a great many things. As the song lyric from the show Gigi goes:

The Fountain Of Youth is dull as paint
Methuselah is my patron saint
I've never been so comfortable before
I'm so glad that I'm not young any more.
 
HowardCohodas said:
I have been using money management principles for over 40 years when I started investing and making my own investment decisions. For me, investing vs. trading is a somewhat blurry line, but I would call my activities this year trading.
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If I were to guess, I would imagine that as a fully paid up American, you were doing the honourable thing and investing in the stockmarket for a few decades ("investing"). You also have a 401k plan, also in equities. Things were looking just dandy until 2008 when all of a sudden, you suffered a 40% drop in the value of your investments.

You then began to question the wisdom of "buy and hold".. maybe stockmarkets don't ALWAYS go up. That's when you started reading trading books, going on websites, etc. and slowly you began to formulate trading strategies.

You've found an interesting strategy which holds up well in backtesting, and are now implementing it live in the market ("trading").

Am I warm?
 
meanreversion said:
If I were to guess, I would imagine that as a fully paid up American, you were doing the honourable thing and investing in the stockmarket for a few decades ("investing"). You also have a 401k plan, also in equities. Things were looking just dandy until 2008 when all of a sudden, you suffered a 40% drop in the value of your investments.

You then began to question the wisdom of "buy and hold".. maybe stockmarkets don't ALWAYS go up. That's when you started reading trading books, going on websites, etc. and slowly you began to formulate trading strategies.

You've found an interesting strategy which holds up well in backtesting, and are now implementing it live in the market ("trading").

Am I warm?
Click to expand...

When I decided to invest, I studied money management and read some trading books. I was fascinated with certain chart patterns and would buy chart books and search for those patterns. On the self-directed investments, I was willing to get out when things petered out. I did not short early on. When I worked for companies that contributed their stock to tax advantaged accounts and matched my contributions, I did participate.

As my career developed I left more and more of the investment decisions to others. About 9 or so years ago I became fascinated with trading for reasons I can no longer recall and bought books, got my librarian to bring books that I learned about in from all over the country and began testing my ideas with custom software and purchased data bases like TC2000. At the same time I was doing work in AI (Artificial Intelligence) in general and genetic algorithms in particular. I built my own GA tool kit with some ideas not in the GA mainstream at the time. I participated in forums (lists back then) which led to some consulting work for a professional trader who used my tool kit for research into rule parameter setting for his credit spread methods. He did not disclose his results.

The big stock market drop hurt but was kinder to me than many others. Perhaps those trading my account were more skilled than others. It was a motivator to get more personally involved, but not the raison d'etre. There was a lull in my consulting practice at the beginning of the year and the job market for full time employment was not good, so I had a the time to return to my interests in trading in general and credit spreads in particular.

And there you go.
 
DionysusToast said:
Hotch

There is nothing wrong with trend following.

There is something wrong with creating a trend following system, only testing it on trending markets and then claiming that it is a panacea for judging direction in systems that trade outright positions.

The spirit of the study, the spirit of the myth is that you can trade outrights without giving a hoot about being in the right direction or not.

This is not, nor will it ever be true.

Of course, we can talk semantics if you like - but I'll leave you to test it on your own account if you actually believe in this.

DT
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Oh I agree with you on most points, and I don't think it's the best way to go about it, but I'm not going to state as fact that it's impossible to make a system which has random entries, and enough of an edge during trending periods to make it profitable over all periods, because I don't know.

Would a 20 year backtest help sway you to the possibility that it might be doable at all?

EDIT: I'm not saying I'll actually be able to do it, but it might stave off boredom for a bit.
 
HowardCohodas said:
I don't know if it is the case here, but for some "Their mind is made up and wont be confused by the facts." ;)
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Well - when some facts appear, I'll be sure to consider them.

This far the only system examined is Van Tharp.

Why not bring on your system Howard?
 
Hotch said:
Oh I agree with you on most points, and I don't think it's the best way to go about it, but I'm not going to state as fact that it's impossible to make a system which has random entries, and enough of an edge during trending periods to make it profitable over all periods, because I don't know.

Would a 20 year backtest help sway you to the possibility that it might be doable at all?

EDIT: I'm not saying I'll actually be able to do it, but it might stave off boredom for a bit.
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The Van Tharp system will work over 20 years in the weekly DAX.

If you develop that or another system that works as well on this market, I hope you will indulge me and let me throw another couple of markets at it....
 
TheBramble said:
You want random?

At 09:23 (CET) tomorrow Thursday December 9th. Go short EURCAD.

Use a stoploss equivalent to 50% of the max-min of prior 11 bars.

Exit at 14:34 (CET).

I leave it to others equally fuggin amazed at the capcity of some to endlessly debate hypotheticals while seemingly unable to realise there is nothing stopping them rolling their sleeves up and getting stuck into the empiricals.

Load an excel spreadhseet with randoms for FX pair or instrumernt to trade. Time to enter. Direction. Prior number of bars to calc 50% of stoploss. Time to exit. All random. Do it for a few weeks.

Let us know how you get on.

wackypete2 said:
Have these signals been backtested?
I think I throw about $4,152.89 into this to see how good this works.

Peter
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Click to expand...
You got a 1:2 for your trouble. You did stick the whole lot on didn't you?
 
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