Trading Systems - Do they Work?

I trade my own account here. I also teach here at my Trade Room and on Webinar. My own trades are based on the daily/weekly time frame, so I am basically free during the day to take on some clients. You may want to look at www.twitter.com (wirraltraders) which was started just over a week ago for a bit of fun... Not sure whether I will keep it up just yet, but you will notice that the trades taken are time stamped by Twitter in advance of the trade taken...
 
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Well I assume you aren't familiar with the likes of William Eckhardt, Dunn Capital, JWH, Winton, AHL etc etc. Trading systems do work, but obviously the method of entering and exiting trades is only a part of running a trading business. Its rather like saying Chinese restaurants don't work because when you tried running one it went bust, and you know a lot of other Chinese restaurants that have gone out of business as well.
 
I'm not looking for a mentor, but why don't you go to my thread and tell me what you think about my LT--MT trades. There's 16 listed.


wirraltraders said:
I trade my own account here. I also teach here at my Trade Room and on Webinar. My own trades are based on the daily/weekly time frame, so I am basically free during the day to take on some clients. You may want to look at www.twitter.com (wirraltraders) which was started just over a week ago for a bit of fun... Not sure whether I will keep it up just yet, but you will notice that the trades taken are time stamped by Twitter in advance of the trade taken...
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bevok said:
Well I assume you aren't familiar with the likes of William Eckhardt, Dunn Capital, JWH, Winton, AHL etc etc. Trading systems do work, but obviously the method of entering and exiting trades is only a part of running a trading business. Its rather like saying Chinese restaurants don't work because when you tried running one it went bust, and you know a lot of other Chinese restaurants that have gone out of business as well.
Click to expand...

There are two types of trading system, I believe. The day trading algo-type churner, where the aim is a nice smooth equity curve, and the longer term trend model, as used by the funds you mention above.

I think it's safe to say when any mention is made of "trading system" on t2w, it is in reference to the first type, some mythical program that churns out £200-£500 a day profit with no drawdown.
 
Hi I agree with all of that. I believe on here the discussion is about "retail trading" by independent "retail" traders who are basically private individuals. This automatically precludes Banks, hedge funds and the like who do use complicated algorithms (which may come under the broader heading of "systems") as part of the mix of Trading types employed.

So I will repeat my first post once again with reference to "retail" Traders. Do Trading systems work - in my opinion they do not.
 
Is Birkenhead in the Wirral? I was at Liverpool Uni (long time ago) and took the ferry once.

I'd tend to agree with you on this issue. I spent several months backtesting every system I could devise, and failed to find anything consistent working off short time frames (sub 4hr).
 
Hi Birkenhead is on the Wirral Peninsula and is part of Merseyside. We are in Cheshire S Wirral - quite close to Chester.. This is only my considered opinion regarding "Systems".

I Fly fish for trout and Salmon and we have a saying that most of the fabulously made, gaudy attractive flies we use are made to catch the fisherman, not the fish.. They can be caught with something very simple you make yourself..
 
meanreversion said:
Is Birkenhead in the Wirral? I was at Liverpool Uni (long time ago) and took the ferry once.

I'd tend to agree with you on this issue. I spent several months backtesting every system I could devise, and failed to find anything consistent working off short time frames (sub 4hr).
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hmmm....but what is a system? I use same rules for entry/exit/management time after time...works when I'm swinging, works when I sit here scalping like a Mohican on Bolivia's finest marching powder...I could easily wrap it up in a box and flog it and or sit there calling out trades and make folk 50+ scalping pips on EU... day, after day, after day...

8 EU trades today off v.short term TFs (ticks not minutes) 3 losers, one was outside the average scope of my losses (generally 10 pips) and breached the 30 stop but not a bad pip count and still in a long trade...
 
It may surprise you but the biggest percentage gain in the shortest time period I ever made was using the 5 min chart. That was just over a year ago in a specific currency and I made +1750% gain in just 6 weeks before the vice president of the broker got wind of what was going on. That was using a specific method (not a system) however and I still would not count that as a system.

It may also surpise you to know that now I do not and have no interest in repeating that and trading in 5 min or other short time frames. I find scalping too much like hard work and unecessarily stressful. Maybe I'm getting too old for it now, but I now only trade in much longer time frames - usually the day/week but sometimes starting a trade in something shorter.

I think it is a truism that the longer you have been trading and the more experienced you become, the longer the time frame you will end up trading.

One old time trader (v successful multi multi millionaire) was once asked how he viewed his charts. He immediately stood on his desk and threw them on the floor. " like that.."
 
Does anyone know where I can get a copy of the software APS which was distributed before by company Tradingpatterns.com? Apparently, the company stopped distributing it.
 
meanreversion said:
There are two types of trading system, I believe. The day trading algo-type churner, where the aim is a nice smooth equity curve, and the longer term trend model, as used by the funds you mention above.

I think it's safe to say when any mention is made of "trading system" on t2w, it is in reference to the first type, some mythical program that churns out £200-£500 a day profit with no drawdown.
Click to expand...

Ah, that explains it! In that case, no trading systems don't work. In fact don't even bother. Might be more successful sticking with "the trader's balls,appetite for success ,concentration , skills, knowledge , guile, trading tricks, money management, discipline ,gambling staking systems, trading systems,risk management, set ups ,experience ,nerves,personality and a method"
:D
 
Black Swan said:
hmmm....but what is a system? I use same rules for entry/exit/management time after time...works when I'm swinging, works when I sit here scalping like a Mohican on Bolivia's finest marching powder...I could easily wrap it up in a box and flog it and or sit there calling out trades and make folk 50+ scalping pips on EU... day, after day, after day...

8 EU trades today off v.short term TFs (ticks not minutes) 3 losers, one was outside the average scope of my losses (generally 10 pips) and breached the 30 stop but not a bad pip count and still in a long trade...
Click to expand...

Yes, much of this is all semantics.

If you are using the same rules, do you think your trading could be programmed or automated? Is that something you've looked into? Maybe would free up your time to enjoy the marching powder in other ways :)
 
meanreversion said:
Yes, much of this is all semantics.

If you are using the same rules, do you think your trading could be programmed or automated? Is that something you've looked into? Maybe would free up your time to enjoy the marching powder in other ways :)
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Prolly...but who cares? We all know how to trade, not rocket science is it? Following price/changing direction, managing yerself and ya money... yada...yada...

I'm a swing trader but scalp (trade off short term/tickTFs) for the fun of it and the extra revenue. :)
 
Reason I ask is that I might go back and see if I can find something off shorter timeframes (1-2hr) again, something mechanical, something which a few people here have already agreed doesn't exist.

I don't derive any pleasure from attempting to scalp, I'm too old for that now (37). I'm actually fairly adverse to gambling (not suggesting that YOUR style is gambling, BSwan), and to me, trading v short term (e.g. 5 mins) feels a bit like gambling. I used to punt fairly decent size on sports at City Index but then gave up as I realised I had no edge and was guaranteed to lose money over time.
 
meanreversion said:
Reason I ask is that I might go back and see if I can find something off shorter timeframes (1-2hr) again, something mechanical, something which a few people here have already agreed doesn't exist.
Click to expand...

If you decide to go down this route, I would think that your best chance of success would be something like an opening-range-breakout strategy with a time stop element. Moving averages / n bar highs I don't expect to work on sub-daily timeframes.

Just my 2 cents, I have never traded a mechanical strategy fwiw.
 
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