Has anyone made real money?

[Vrothdar]

99% is relative... but if you leave in the UK, you probably need remortgage.

Relative to what? Nope, definately don't need to remortgage.

If Lehman’s, Morgan’s and Merrill get it wrong, you will get it right??? ???

They are supposed to have the best traders

I never said that I could develop a consistently successful trading system that adapts to market conditions. I'm merely questioning you about why you think it's not possible. My suspicion is that you believe it's not possible because you can't do it yourself and haven't had it shown to you by somebody who can.

 

[Magos]

Relative to what? Nope, definately don't need to remortgage.



I never said that I could develop a consistently successful trading system that adapts to market conditions. I'm merely questioning you about why you think it's not possible. My suspicion is that you believe it's not possible because you can't do it yourself and haven't had it shown to you by somebody who can.

I cannot do it myself, If I could though wouldn't be working in the CITY, I would be in a yacht in Monte.

But if you can do it and you can prove it to me, I will buy yours.

 

[Vrothdar]

I cannot do it myself, If I could though wouldn't be working in the CITY, I would be in a yacht in Monte.

But if you can do it and you can prove it to me, I will buy yours.

If I ever do achieve it I very much doubt I'd ever go down the route of selling my system to the masses.

Still not sure why you think it's not possible for such a system to exist.

 

[Magos]

If I ever do achieve it I very much doubt I'd ever go down the route of selling my system to the masses.

Still not sure why you think it's not possible for such a system to exist.

Example: Artificial example (like the 99% before)

Because, if you have all the indications saying that Oil going up (beta, correlation coefficient, standard deviation, CAPM, arbitrage models, econometric models, etc.) , and then the Goldman’s trading team decide that 100 is too much and short their black book for instance, the Oil will go down.
Even if you are 100% right.

Your margin level will cause problems hence you to liquidate, even if demand is greater than supply.

And guess what after 3 or more days oil goes up, and Goldman’s have a different position.

They are long now, and you have no money

 

[Vrothdar]

Example: Artificial example (like the 99% before)

Because, if you have all the indications saying that Oil going up (beta, correlation coefficient, standard deviation, CAPM, arbitrage models, econometric models, etc.) , and then the Goldman’s trading team decide that 100 is too much and short their black book for instance, the Oil will go down.
Even if you are 100% right.

Your margin level will cause problems hence you to liquidate, even if demand is greater than supply.

And guess what after 3 or more days oil goes up, and Goldman’s have a different position.

They are long now, and you have no money

All that means is that the system you're using can't handle that situation. That doesn't stop it being consistently profitable over time and adapting to changing market conditions. You'll never have a 100% success rate. Also, If you'd have "no money" after one failure like that then you're risk on the trade was too high.

You're argument seems to be that because a poor system doesn't work no systems can work.

 

[Magos]

We can debate all morning, why not? Remember 13:30 PPI

Let’s make it easy before going into risk and exposures!
Can you program grey or black boxes?

 

[Vrothdar]

Can you program grey or black boxes?

No I can't but I'm not sure how that stops successful ones existing. Nice to know somebody thinks I'm the centre of the universe though

While it might not seem that way I'm not really interesting in being right; I'm just trying to get to the bottom of why you think they can't exist. I'm trying to develop a mechanical trading system myself (that I could automate should I wish to) and have always been a believer in seeking out information, and people, that argue against one's own beliefs as I find I learn a lot from it.

 

[Magos]

No I can't but I'm not sure how that stops successful ones existing. Nice to know somebody thinks I'm the centre of the universe though you are not LoL

to develop a mechanical trading system myself (that I could automate should I wish to)
That’s a grey box, not black. The difference is that you can interfere with the decisions.
A successful black/grey box trader is Dr Martin Coward, for reference (ex goldman sachs)
In order to do a good (not 100% since can never exist) black/grey box you need to team up with developers. Therefore you need to program ECN’s, RSS feeds and also Real Time economic data. Plus your trading platform and alot of other factors.

If you go solo you will never have something worth selling in the future + not advance enough.

I wish you all the best with your system, and would happy to help or provide information to you.

D

 

[Vrothdar]

So now you're saying that these systems can exist? I'm rather confused.

 

[Vrothdar]

No I can't but I'm not sure how that stops successful ones existing. Nice to know somebody thinks I'm the centre of the universe though you are not LoL

to develop a mechanical trading system myself (that I could automate should I wish to)
That’s a grey box, not black. The difference is that you can interfere with the decisions.
A successful black/grey box trader is Dr Martin Coward, for reference (ex goldman sachs)
In order to do a good (not 100% since can never exist) black/grey box you need to team up with developers. Therefore you need to program ECN’s, RSS feeds and also Real Time economic data. Plus your trading platform and alot of other factors.

I'm fully aware I'm not the centre of the universe and that there is an awful lot involved in creating a fully functional blackbox. That's another discussion though.

If you go solo you will never have something worth selling in the future + not advance enough.

I wish you all the best with your system, and would happy to help or provide information to you.

D

As I said before I've no intention of selling anything I develop and I'm already (to some extent) collaborating with others.

 

[Magos]

bravo then

 

[x4trt]

Hi, this is my first post. I am looking forward to gaining a lot of knowledge out here. I also looking forward to helping some traders with my limited knowledge (mostly of how not to do things).

KMAP, Interesting that today I read on this forum somewhere in another thread a comment that was essentially saying that many commercially available mechanical systems DO WORK work but that most or all of them eventually "stop working". Personally, I think this is true for most systems that deliver better than a 50% annualized returns with less than a 20% drawdown (but I am just guessing based on my own negative experience, I have no expertise with this other than the fact that I have lost a lot of money trading mechanical systems).

The key before purchasing / trading one of these systems is to determine what defines that the system has "stopped working" so that you can get out before you lose everything. For most, this means that the system results break below some acceptable drawdown level. Unfortunately, by the time this happens you have already lost a great deal of your capital (especially if you are applying money management to your account). I equate this decision to a discretionary trader having to decide when it is time to exit a trade.

Recently I had exchanged messages with a system developer that had a system up for monthly lease on a popular website that lots of people out here talk about (I won't mention it because I don't want that to taint my post as being a scam of some sort). Anyway, I shared with the developer that I had traded a number of commodity trend following systems several years and that I had lost a great deal of money because, despite all the backtesting that had been done by me and others, several systems started to break down about 6 months after I started trading them. What I found so refreshing about this particular system developer is that he essentially admitted that his system too would likely fail in the future. He agreed with me that the real trick when developing a system is to develop one that has good profitability and drawdown stats AND will work forever. He said the "forever" part was the one he had never been able to get a grasp on, but that he had become pretty good at determining when it was time to get out of a system and shut it down so that he still locked in a lot of profit. I won't mention the developers name since I am not sure if his comments were meant for public consumption (though I think he would tell everything the same thing if asked the same question). However, I do agree with this developer and I know that this is how many people feel who have been able to find success trading commercially available mechanical trading systems.

Having said all of that, here is some advise that I can give based on having done it wrong:

1) Make sure that the system developer / seller / leaser trades the system themselves and that they maintain a system track record and also has actual statements (so that you can compare the two for slippage, missed trades, etc.).
2) Make sure that the system developer will give you access to trade in "demo" and that the trades you are experiencing in demo match the real time track record and the statements that they post on their website (if they don't update in a timely manner, you won't be able to do this).
3) Pick several systems to trade at once, and make sure that the drawdown characteristics are improved by the combination of the systems (which usually happens). If you can't afford to trade several systems, then don't trade mechanical systems at all.
4) Define for yourself BEFORE you start trading these system what needs to happen to make you stop trading one of the systems or the porfolio of systems that you are trading.

I could write about 10 pages on how to improve your chances of getting this right. I don't know anything about the system you ask about, but maybe this will help you in your search. Just remember, not all traders offering their systems for sell or lease are scam artist (though many are), but their systems will likely stop working at some point in the future.

 

[Adamus]

The key before purchasing / trading one of these systems is to determine what defines that the system has "stopped working" so that you can get out before you lose everything. For most, this means that the system results break below some acceptable drawdown level.

.... snipped....

Just remember, not all traders offering their systems for sell or lease are scam artist (though many are), but their systems will likely stop working at some point in the future.

Very interesting points, but I guess you are looking at it from the point of view of someone who didn't develop the mechanical systems? As someone who does code mechanical systems, I define a system that works as something that shows a profit over a 10 year history of back-testing.

Sometimes the equity curve looks horrible - so if you traded it for just six months, you might pick a losing period. If you ditch the system, you might be ditching it just before it turns profitably again.

This is where I have confidence that a mechanical system works, because I coded it. I know a system that I code won't be based on a narrow set of parameters that looked good in recent backtesting, so any bad drawdown should come good again.

But if you buy a system without understanding what it does, how can you tell?

 

[GemStocks]

can you send me the link please thanks

Start here but all I know is where it's at, not if it
works.
http://www.metatrader4.com/