Making a more scientific trading strategy

TakeYourProfits said:
math is a method of understanding the world around us, and that includes trading.... in itself the market is nothing more than the psychological measurement of the combined decisions and activities made by all of the humans, the people, as you say, in the world...
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(y)

Good maths and good memory, two important qualities for a trader.
 
If you fully understand this maths V common sense debate you will be surprised at its ramifications
 
rawrschach said:
Define a 'scientific approach'.
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BEWARE: Its a 2 hour video, i made for myself at the start of my blog to define my scientific approach to taking on the markets... obviously were talking the explanation of a consistent and objective approach so it may be boring... but you asked for it so here it is... Trading Science: Rules of Engagement

here is the most important part: keeping track of it all and using the mathematics to confirm the accuracy of your decision making processes. For Traders: Forex Trading Systems – Stock Software & Free Spreadsheet
 
I was asking OP tbh.

edit: from a look through your site it looks like you calculate 'probabilities' based on past outcomes (correct me if I'm wrong), that is, in a Gaussian context, and definitely not based on methodology.

If you really want to use math/software to test your ideas the only simple approach is via monte carlo simulations.
 
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So all this is about the commercial product your are developing?

And your approach to marketing is "if you can't blind them with science (as you clearly can't), then baffle 'em with bu11sh1t" ?

The Forex, Futures, & “Stock Software” that is the ProTrader Dashboard is how the best traders use Technical Analysis, Risk Management, Money Management, Quantitative & Statistical Analysis & Discipline in one easy to use free spreadsheet. This tracking spreadsheet really has been built for all “fxtraders” that want to attain consistent profitability in the forex, futures, or any market for that matter, because that is exactly what I am designing the Spreadsheet formulas for!!! The DSL (Daily Statistics Log) ProTrader Dashboard has the functionality to graphically track the equity curve as it is built one trade at a time, while enabling a mathematically consistent approach to Position Sizing & Technical Analysis. In using a Fixed-Ratio Money Management method to calculate your Position Sizing, the ProTrader Dashboard will only allow you to increase the size of your position when your Trading Performance merits the change. You must earn the right to trade big positions! Period.

Best of all, I have decided to let this tool go like a free spreadsheet for Beta Testing! I absolutely cannot wait to let you see the final product we are getting close to completing, but, IF you want to start applying a mathematically consistent approach to your trading plan today, in order to establish new structured belief patterns within your own belief system, by quantitatively measuring the Technical indicators you use to help you execute a trade decision, then, submit your email above so I can send you the download link to the Excel file. Also, don’t forget to watch the video below to learn how I use mathematical consistency to execute my plan to trade the markets everyday. The probabilities, Winning Percentages, & Payoff amounts that are calculated by the ProTrader Dashboard serve to reinforce my belief in the Quantitative Statistics that measure the performance I keep track of on this Video Blog. Don’t hesitate and just Execute, make mathematics and the ProTrader Dashboard the only trading systems tools you use today and everyday to Take Your Profits!
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Jeeezzzzz....

I hate to break it to you - but you are REALLY going to need to dumb that down if you expect any customers :rolleyes:
 
Met an old guy in the boozer who offered to show me THE winning formula - for umpteen pints. Seeing as how it's Christmas soon I will give you this one for free

R12 = 4N1 N2  m2kT 3=2 Z 10(E) v3 e�� EkT dv

I was too bloto keeping pace with him to ask him what it solved tho !

:)
 
DionysusToast said:
So all this is about the commercial product your are developing?

And your approach to marketing is "if you can't blind them with science (as you clearly can't), then baffle 'em with bu11sh1t" ?



Jeeezzzzz....

I hate to break it to you - but you are REALLY going to need to dumb that down if you expect any customers :rolleyes:
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i got you, but, im not in the business of looking for customers... im in the business of consistently profitable trading...

im not trying to make things sound pretty in an attempt to separate you from your money; if thats what you'd like your going to have to get suckered by someone else...

im just sharing my methodology in order to verbalize and internalize the the fundamental principles and processes of my business' trading plan... these forums make me better by allowing me to clearly state my trading objectives... i have to understand it, noone else; unless they choose to do so...

i share my knowledge to give people an opportunity to participate in something that actually works, for people who want to garner a deep understanding of a skill that takes deep commitment... there no way to make the truth or the facts sound pretty or easier to digest.. the truth just is what it is...

i hope you understand where im coming from, i just dont have the time to focus on making people understand something that they do not have the desire to understand for themselves... the people that follow me know exactly where im coming from.... and that's because they wish to be consistently profitable as well.... :smart:
 
DionysusToast said:
So all this is about the commercial product your are developing?

And your approach to marketing is "if you can't blind them with science (as you clearly can't), then baffle 'em with bu11sh1t" ?



Jeeezzzzz....

I hate to break it to you - but you are REALLY going to need to dumb that down if you expect any customers :rolleyes:
Click to expand...



i just realized you were trying to insult me, and then i just realized who you were...

listen man, go into journalism... trading isnt for you... this is about taking a mathematical approach to consistent action, if you want to download my free tools from my website feel free to do so...

if you have absolutely nothing productive to add to the conversation, i am going to ask you to step aside while those of us with trades to manage can do so...

it seems like youve spent more time attempting to become a legendary member of useless knowledge than a consistently profitable trader...

im sharing my knowledge that i have garnered for myself... youre just showing the world youre nothing more than a bitter man who has lost his entire life savings to the markets because you only know how to blame other people for your bad decisions, instead of yourself, which is where they belong... have a nice day.

ive said what ive had to say on this forum, i hope those of you who are seeking real advice can see past the goons and hustlers on this site doing everything they can to misinform you and to separate you from your money....

:LOL:
 
Pat494 said:
Met an old guy in the boozer who offered to show me THE winning formula - for umpteen pints. Seeing as how it's Christmas soon I will give you this one for free

R12 = 4N1 N2  m2kT 3=2 Z 10(E) v3 e�� EkT dv

I was too bloto keeping pace with him to ask him what it solved tho !

:)
Click to expand...

thats not a mathematical formula, maybe you should go back to elementary school... in the mean time you can always try educating yourself for free... the site was actually started by an ex goldman trader and MIT graduate... for FREEE:

Khan Academy
 
I always appreciate good informative conversation in this forum. I have never spent a dollar cash on other persons theories or trading products but I have spent countless hours researching what works best for myself. I will reiterate for any other newbies, like myself, something that countless other traders who have already made it might say, "find a trading method that fits your personality and style and then improve upon it with dedicated consciencious work".

Research and development of your own trading is the closest thing you will ever come to when searching for that perfect profitable system.
 
TakeYourProfits said:
i just realized you were trying to insult me, and then i just realized who you were...

listen man, go into journalism... trading isnt for you... this is about taking a mathematical approach to consistent action, if you want to download my free tools from my website feel free to do so...

if you have absolutely nothing productive to add to the conversation, i am going to ask you to step aside while those of us with trades to manage can do so...

it seems like youve spent more time attempting to become a legendary member of useless knowledge than a consistently profitable trader...

im sharing my knowledge that i have garnered for myself... youre just showing the world youre nothing more than a bitter man who has lost his entire life savings to the markets because you only know how to blame other people for your bad decisions, instead of yourself, which is where they belong... have a nice day.

ive said what ive had to say on this forum, i hope those of you who are seeking real advice can see past the goons and hustlers on this site doing everything they can to misinform you and to separate you from your money....

:LOL:
Click to expand...

Glad I didn't hit a nerve then!
 
rawrschach said:
I was asking OP tbh.

edit: from a look through your site it looks like you calculate 'probabilities' based on past outcomes (correct me if I'm wrong), that is, in a Gaussian context, and definitely not based on methodology.

If you really want to use math/software to test your ideas the only simple approach is via monte carlo simulations.
Click to expand...


#1 i use the same exact methodology to enter into the market everytime. if you want to find out exactly what the detailed methodolog is your going to have to watch the "movie" ...

#2 i have a monte carlo simulator... but i fail to see how one would make you a better trader , other than to give you an indication of the infinite number of equity curves that are possible for any given function of x depending on the risk parameters entered into the formula that will graph your monte carlo simulations.

my spreadsheet CAN be used to "backtest" but that is not what i use it for necessarily....

my spreadsheet helps me to calculate the probabilities of the trades i want to trade (according to a mathematically based selection process),as well as to Quantify, & Record the exact methods i use to execute any given trade i may take...

you see, what i am really interested in is the quantitative measurement of my own executions & decisions to enter the given data set of trades that i execute... i am interested in mathematically figuring out the actual effectiveness of the decisions that i make according to a predefined mathematical model that i have determined to have a positive expectency, based on the monte carlo simulations ive run...

however, i think most people err in relying on the montecarlo simulations as much as they do because most novices are really concerned about finding the perfect holy grail system that will produce a 95% winning percentage and will turn 5,000 usd into $1,000,000 over night...this is unrealistic and not what is needed to achieve consistent profitability.... like i said earlier the typical money manager is only "right" 4, maybe 5 times out of every 10 trades executed... with those numbers trading becomes an exercise in discipline, consistency, & trade management, rather than one of strategy or mathematical calculations...

i use the math to understand the market and how my trade decisions compare to the overall market, as well as to force me to take the trades i have predetermined to execute exactly as i have mathematically defined them... ahead of time... by the time i sit at my desk, the strategy i will be trading is already programmed into my mind and there is no need for math, models, or strategy at that point in time.... if your trying to define all of the variables that need to be defined consistently in order to turn consistent profits, 5 minutes before you enter a trade, its already too late, youve lost.

the most important thing to remember is that the software is a tool that is to be used in order to force you stay true to your long range goals within a mathematically defined day to day framework... its easy to say i wanna make 10,000 pips this years, its another thing to actually stay true to a plan that is going to earn you those gains 100 pips at a time...

you see, the way i see it, no one person has the resources to study all 100,000,000 possible occurrences of every single probability curve that has the potential of playing out... at some point or another a wannabe trader is going to actually have to decidedly put his balls to the fire and test out his ideas; at that point the whole idea goes from finding a strategy with a positive expectancy, to an exercise in trade management through the objective use of risk management, money management, & position sizing rules... defined in mathematics...

so to answer your questions, that, in essence, is what the spreadsheet is for: to quantify my predefined mathematical models that I know to have a positive expectancy after i have decided to trade those strategies. if you waste your time back-testing your ideas for an entire year you are not trading, under those circumstances, one cannot be considered a trader... you have to trade to be a trader!!!

what one must attempt to do is to use mathematics as a tool in order to find verifiable, and objectively ACTIONABLE ideas that can be efficiently managed with mathematically defined technical rules, risk management rules, money management rules, and position sizing rules...

my software is not a testing tool. its a trading tool. i use math to psychological anchor myself to the factual belief that my systems produce a net gain over the long term, using the software i stay very much focused in the details of my day to day trading activities... working towards my particular end game...

the software helps me record the day to day details in a mathematically objective format that forces me to stay on the mathematically defined course i have defined for myself that i have identified as the consistently profitable path that will take me where i want to go... For Traders: Forex Trading Systems – Stock Software & Free Spreadsheet

that path is the path of a consistently profitable trader... nothing more, nothing less.... the site is basically the publishing of the "scientific experiment" i conducted to prove my case that consistently profitable trading in a retail account using mathematically defined and quantitatively defined strategies was in fact probable, & very possible... i invite you to review my work... the 2 hour "movie" explains the experiment i conducted over the course of the past 12 months...

Trading Science: Rules of Engagement

the final part of any scientific work is the peer review of the published work... my site is an attempt at facilitating that peer review in order to start an objective conversation on the subject to advance my interests trading the markets...

i dont have the answers as to why they move, that is a job for CNBC to do... my job is to put myself in a position that will allow me to participate in the moves that play out in the market everyday... i see the market as a neutral source that provides me with the data feed that i need to execute the decisions that i make in order to earn a living trading everyday... thats it... if i lose, or if i make a bad trade its my fault for executing a bad trade; at that point, it then becomes my job to minimize the risk i am exposed to in order to protect my capital so i can execute more actionable trade decisions the next day...

make sense??

Take Your Profits | TradeSocial: The Online Trading Business Network for Traders

:cool:
 
numbertea said:
I always appreciate good informative conversation in this forum. I have never spent a dollar cash on other persons theories or trading products but I have spent countless hours researching what works best for myself. I will reiterate for any other newbies, like myself, something that countless other traders who have already made it might say, "find a trading method that fits your personality and style and then improve upon it with dedicated consciencious work".

Research and development of your own trading is the closest thing you will ever come to when searching for that perfect profitable system.
Click to expand...



i couldnt have said it better myself. thank you for a smart and honest contribution to the topic... with that mindset, i have no doubt in my mind that you too will be a success trading the markets... ive proven that mathematically by the way... lol...

Good luck & TakeYourProfits!!!
 
TakeYourProfits said:
thats not a mathematical formula, maybe you should go back to elementary school... in the mean time you can always try educating yourself for free... the site was actually started by an ex goldman trader and MIT graduate... for FREEE:

Khan Academy
Click to expand...

Caught up with that guy again and
It seems that I got that formula as it happens from a top nuclear scientist. The fact is, that it's something to do with nuclear fusion inside the sun. A tad beyond elementary school - you'll probably agree ! Probably not much use for trading maybe but definately a formula !

:smart:LOL:
 
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TakeYourProfits said:
i dont have the answers as to why they move, that is a job for CNBC to do...
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This shows a massive misunderstanding of the markets. CNBC may well assign cause to a move but it is generally nonsense.

There are answers as to why the markets move....

If you are in a fruit market, about to buy apples for $1/kilo and your friend pops by and tells you apples are for sale for 25c/kilo in another section of the market.

What do you do?

The markets do exactly the same thing, although people feel that an abstract concept. People want to model it, program it, frame it up in terms other than market terms.

If you treat the markets a bit more like the supermarket, you'll find there are times when you know where the markets going to go because you know why.

The math is something you need to get past in order to see why the markets behave the way they do and when it is safe to enter a trade. You do not need to understand math. You need to understand people.
 
Another way of looking at it.

You have 5000 people in a shopping mall. Can you mathematically model a system that will predict where each person will be in 10 minutes time?

Think about it.

I can accurately make the prediction for all 5000 - with about 95% accuracy, it just doesn't require math.
 
DionysusToast said:
The math is something you need to get past in order to see why the markets behave the way they do and when it is safe to enter a trade. You do not need to understand math. You need to understand people.
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A big mistake as made by the USA for recent decades in areas like foreign policy. Also reminiscent of the old German methodology.
People are not rational machines that operate as clockwork. Top people like Donald Rumsfeld even sounded like robots !! Hopeless - as proved by recent international events.
 
the hare said:
Set off the fire alarm, or ring in with a bomb threat and you could have a pretty good guess.
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BINGO! :clap:

Common sense > math.

And so one of the more obvious things to do is figure out what the markets 'fire alarms' are.

I hate to dig our a cliche but it's fear & greed. Or rather, it's not just stop runs. It's not just people exiting when they get run over, it is also the squeals of delight as they push it further & further into profit until....

Anyway - The Hare wins a gold star :clover: - although I think it may be fake gold as it's gone green.
 
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