The Outliers Talisman

[darkcider]

:clover:This simple four leaved clover will be the, Outliers Talisman.

For the purposes of this journal it will be the only smilie that i personally use, it is all that i need.

So what's this particular journal all about? Well it certainly won't be about anyones ego, expecially mine. It won't be about my amazing technical skills, or my special knowledge and understanding of any chosen market. This journal is going to be all about plain old random luck, more to the point, my plain old random luck.

:clover:I wonder how long my luck will last? I'm hoping for some longevity, purely for the fact that it will make things more interesting and create more information to work with. More details to follow.

 

[robster970]

Looking forward to this. Good luck.

 

[darkcider]

Looking forward to this. Good luck.

Thankyou, robster. I'm rather looking forward to doing this myself, and i'll be trying my best to make it as interesting as possible. If at all that is possible, taking into consideration the nature and theme of the journal.

 

[darkcider]

Ok, firstly, thanks for the rep robster. The reason why i have mentioned your rep is because within it you mention 'averaging', i will not be averaging.

I'll get straight to the point, i will be setting limit orders with very small take profit orders attached. I will only ever use limit orders, market orders are prohibited for my use on this journal. Also, i will only ever buy above the market, and i will only ever sell below the market.

Stops! I will be setting protective stops. These stops will protect me from losing more than i wish to, and i guarantee that they will be as tight as i need them to be.

I suppose that this method could utilise the inverted reasoning of the old trading cliche, 'death by a thousand cuts' (relating to the use of stops that are too tight). Couple this with the fact that it's damned hard to pick tops and bottoms, and i think that we may actually stand a chance. Who knows, later on, we may even come to realise that some technicals are quite useful, but not as we think they are.

At some point i will lay out the full procedure for this journal. More to come.

 

[Mike Kshemaraja]

I am following with interest. But I already have a feel that this is going to be good. :clover:

 

[the hare]

Do not let the cat out of the bag. They dont deserve it

 

[darkcider]

My chosen broker for this exercise will be Oanda. I will be using one market only and that will be the SPX500 (CFD). Any limit orders that are placed in the market will be posted up immediately and hopefully well in advance.

The maximum leverage for this account is 50:1, this is the ratio that will be used on all trades.

The account value will be 1000GBP. This value is of no real significance, and any multiple can be used. It all depends on how much a person is willing to lose.

Example: Using a full clip and a stop of 27.5 points, i can trade with 56 units which equates to just over 35GBP per point.

 

[darkcider]

Two orders that are already placed:

1. BUY 1412.9 (SPX CFD)
2. BUY 1416.0 (SPX CFD)

Both orders have a one point take profit order attached and a 27.5 point stop loss, which is as tight as i would like my stop for now.

I can at any time alter the trade parameters, i could set a profit target of 0.5 points or even 0.1 points. Why bother setting the profit target to 0.5 points as opposed to one full point? Believe it or not, 0.5 pts can make a lot of difference to the overall account statistics. If you can be bothered, try it and see for yourself, over say a three month time period using a sub account.

 

[Liquid validity]

Both orders have a one point take profit order attached and a 27.5 point stop loss, which is as tight as i would like my stop for now.

If you can be bothered, try it and see for yourself, over say a three month time period using a sub account.

Is that a typo, or are you really going to trade with a 1 point TP and 27.5 point stop?
If those are the real parameter's, all the randomness and luck in the world will not help...

 

[darkcider]

Is that a typo, or are you really going to trade with a 1 point TP and 27.5 point stop?
If those are the real parameter's, all the randomness and luck in the world will not help...

When will it all end, LV? Bet me the thousand. You give a date, just one day in the future when it will all end. If it doesn't all end on that particular day then i get to put an extra 1000GBP into the journal account. If you get it right, i will end the journal, you will have ended this journal in spectacular fashion. Bet me.

 

[Liquid validity]

When will it all end, LV? Bet me the thousand. You give a date, just one day in the future when it will all end. If it doesn't all end on that particular day then i get to put an extra 1000GBP into the journal account. If you get it right, i will end the journal, you will have ended this journal in spectacular fashion. Bet me.

The lulzometer just went off the scale
Seriously, burn your money, the pain will be over more quickly.
Sooner or later, one trade will not come back and will hit your stop.
Carry on though, 1K is cheap at the price for the lesson.

 

[Lightning McQueen]

The lulzometer just went off the scale
Seriously, burn your money, the pain will be over more quickly.
Sooner or later, one trade will not come back and will hit your stop.
Carry on though, 1K is cheap at the price for the lesson.

as soon as the rr was posted members fled the thread.

well, it is april 1st

 

[Liquid validity]

as soon as the rr was posted members fled the thread.

well, it is april 1st

 

[robster970]

The lulzometer just went off the scale
Seriously, burn your money, the pain will be over more quickly.
Sooner or later, one trade will not come back and will hit your stop.
Carry on though, 1K is cheap at the price for the lesson.

I wouldn't dismiss this just because of the low r:r, in fact looking at where the profit takes are and where the stop is, it makes sense.

What do you think the p(win) and p(lose) is?

Do you think it is greater than 96.5% for this trade? How do you know it isn't?

Why is this any less viable than 2:1 with p(win) > 33%?

What I don't know is whether this scales over a statistically significant sample size but I think we're about to find out.

 

[Liquid validity]

I wouldn't dismiss this just because of the low r:r, in fact looking at where the profit takes are and where the stop is, it makes sense.

What do you think the p(win) and p(lose) is?

Do you think it is greater than 96.5% for this trade? How do you know it isn't?

Why is this any less viable than 2:1 with p(win) > 33%?

What I don't know is whether this scales over a statistically significant sample size but I think we're about to find out.

Is DarkCider your april 1st multi nic? :cheesy:
Seriously, when I first started backtesting I knocked up a couple of the
traditional hair brained BS methods like this just to see how bad they really are.
Trust me, they are sh1te.

Its a more slick version of this crap method that most BS system sellers use
to make things look good.

To be blunt, mechanical / automated retail systems are dumb.
About the only way I think they can work is as an automated coin flip
that relies on kurtosis and the right RR, taking advantage of certain market mechanics.
Basically, embrace the dumb element and use it to your advantage.

Even then, why flip a coin when its obvious the market is on a one way run.
Thats about the only way I personally think they can be robust enough to actually work,
even then, good discretionary trading will still be more efficient.

The fact that I even typed any of this on a potential april 1st joke thread
does raise the issue of my own dumbness

 

[darkcider]

The lulzometer just went off the scale
Seriously, burn your money, the pain will be over more quickly.
Sooner or later, one trade will not come back and will hit your stop.
Carry on though, 1K is cheap at the price for the lesson.

I have two orders set, you can bet against any of them, or even both if you wish to do so. Good luck:clover:

 

[the hare]

The fact that I even typed any of this on a potential april 1st joke thread does raise the issue of my own dumbness

If it makes you feel any better, Its one of the best posts I've read here

 

[robster970]

That aside LV, I can see ES rotating up to test (i) Wednesday's RTH high and (ii) Tuesday's RTH high which is where the limit orders are. The stop is placed well below Thursday's low. Being familiar with how ES does tends to rotate up and the amount of time it does go backwards and forwards, I think they are very high probability trades. So taking that to it's logical conclusion, I'm asking why not?

As for being accused of being a multinic, well, I'm honoured.

I'm not dissing this outright - just going to watch and see.

 

[Liquid validity]

I have two orders set, you can bet against any of them, or even both if you wish to do so. Good luck:clover:

Ok, even if this is an april 1st lulz thread.
Its the longterm outcome that will mean you fail, tommorow you are highly likely to succeed.
Think about that.

 

[Liquid validity]

That aside LV, I can see ES rotating up to test (i) Wednesday's RTH high and (ii) Tuesday's RTH high which is where the limit orders are. The stop is placed well below Thursday's low. Being familiar with how ES does tends to rotate up and the amount of time it does go backwards and forwards, I think they are very high probability trades. So taking that to it's logical conclusion, I'm asking why not?

As for being accused of being a multinic, well, I'm honoured.

I'm not dissing this outright - just going to watch and see.

Completely agree.
I'm not talking about levels or anything else.

Longterm, the losing trades will wipe out any equity and then some.
Point is, it could fail after a week, or even a year.
It will fail at some point because there is zero risk control.

When was the last time you drove a car with no brakes.
When did you last ski with a 200 foot sheer drop at the foot of the slope.
Acceptable and realistic level of risk, to me thats all that matters.