Trading Systems - Do they Work?

[Black Swan]

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.

Not surprised, don't know you, takes all sorts to make a market etc..Not sure how you can consider taking 3 EU trades so far today (first at approx 7:50) as hard work and or stressful, surely if you've been trading for years, it's just an unemotional mechanical sub-conscious action?

Agreed on the longer term TFs, I swing offa 3-4hrs, cant ever see me *moving up* to dailys though, too far away from the 'b of the bang' for me..

 

[Black Swan]

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.

Don't know bud, I'm 45 and not getting too old.. Edge I use for scalping (although by the true definition it isn't scalping) is not that different to swing trading. Average loss per scalp trade is slightly less than ten pips atm, average win is 32, approx. 4 out of ten winners. I don't gamble, but when all said and done it's (trading) only a two horse race isn't it?

 

[meanreversion]

Maybe I'm lazy ..

 

[meanreversion]

Nah, I'm definitely not lazy, I think I've closed my mind to the possibility of this style of trading, as I've never made money from it. Having said that, I never really had a rigorous system before, so perhaps I need to look again.

 

[bevok]

I'm in the same boat, every attempt I've made to find something short term that works hasn't worked out. I know one or two commercial systems that appear to work but at the moment I'm planning on adding an even longer term approach to the suite first, and then look at short term. To be honest the only reason for being interested is just diversifying returns even more - overall the effort to reward ratio, and the significance of costs compared to returns don't make it all that appealing as an end in itself. I've got over the 'seeking action' thing now.

 

[meanreversion]

Medium term trend systems seem to have a statistical edge, where one might look to capture, e.g. $100 move in gold. But a decent slug of capital is required, and equity swings can be harsh.

I trade 10 markets (4 FX, 2 metals, 2 softs and 2 energy) and today was a volatile day, to say the least.

 

[bevok]

Yes I'm trading medium term and am pleased with the results, although I want to implement a longer term one, I get some good results in testing there and I think its because you avoid a lot of the false retracements. A good trend filter can help a medium term system with that to some extent as well of course. I trade 9 markets, 1 x Ags, 2 x FX, Notes, Eurodollars, NG, and 3 softs), I aggressively increase my portfolio when I can rather than ramp up position size and that seems to work well. When you're hunting for trends although its always nice when you can get a low risk entry and run a bigger position I find the most important thing is to be looking in as many markets as possible. Several times I've got into good moves shortly after adding a new market. I want to strengthen the selection a bit more before adding another system in.

Last couple of days have been a bit tough but I'm quite well positioned for what looks like a flight from risk again. I haven't added the metals yet, although they have been trending well the last few years. I'm quite exposed to the dollar already so I'm not in a hurry to get into them.

 

[wirraltraders]

Hi Sorry I missed your post before.

I am only trading the GBP/USD at the moment and as you will see on my twitter.com blog ( "wirraltraders") a few days ago I predicted that this currency would hit 15200. I took some of this rise in profits as you can see with live trades, time-stamped on twitter (+520 pips) So I did disagree with your 14900 forecast MT

In terms of where we go from here to answer your question belatedly, I think GBP will reach 15500 by the end of next week. There is some resistance after that so I would have to do some analysis when we get there to predict anything longer than that. However if it gets through resistance then certainly 15700 is possible in the next 10 trading days.. If I take a proper look at the euro, I will let you know...

 

[meanreversion]

You're in the business of making predictions? Do you have a crystal ball?

 

[wirraltraders]

A lot of people here have put forecasts on MT and LT for currencies. A hell of a lot more have done so outside of this forum. I was asked for my opinion, so I have given it. I place my trades on both sound fundamental and technical analysis.

Prediction is probably the wrong word to use, but it all boils down to the same thing. Unless you believe in what you are doing and where you are going, you will not be able to trade successfully in the long term.

 

[4xpipcounter]

Traders make forecasts, not predictions. The methodology is the crystal ball. Your methodology tells you where price will be in the future. If the methodology is not a good one, then you have no crystal ball.

You're in the business of making predictions? Do you have a crystal ball?

 

[4xpipcounter]

Not very impressive. On a 100-pip gain, that is 1 unit on an account with $571.43 in it, or 17.5 units with $10,000 in it. If the trade backed up on you 57% of your gains, you would have bankrupted. You gambled and rolled 7's.
OTOH, it is easy to brag, if you don't have real money. Demo money is not real. $571.43 is also not real, inasmuch that it is not a big deal if you flush it down the toilet. I made my point. I'm sure.
BTW, that is only meant to help. It just doesn't look to bright getting on a forum such as this bragging about how you got 20 million% on a trade (I exaggeated....slightly.). Good traders make steady, consistent gains that are proven over a long period of time.
A truism? Nope. I'm in and out of many trades the same day, or hold them overnight.
I won't comment on antiquated quotes. My charts will not hit the floor. They're my bread and butter.

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.."

 

[montmorencyt2w]

http://www.thefreedictionary.com/forecast

A prediction, as of coming events or conditions

http://www.thefreedictionary.com/prediction

something predicted; a forecast, prophecy, etc.

To differentiate between forecast and prediction is playing with words.


I thought that there seemed to be something of a consensus on T2W that trading was a matter of probabilities. You don't attempt to say what is going to happen. Rather you bet that certain outcomes are more likely than other outcomes, and with a combination of wise choices and wise money management you aim to make a profit overall.

 

[wirraltraders]

?? Demo? Don't think you read my Post correctly. I will elaborate. I put £2k into a broker in the 1st week of January and closed the account (because they doubled the spread) and took out £35k end of the first week Feb and moved it to a different broker. More to the point I found out that the Vice President was passing my stats around the office with a precy of the method I was using and they were being sent out on email attchments to God knows where and who on the Internet - surprised you don't already have a copy. Yes I used compounding as an effective additional method to accelerate my equity curve, but then again, I was using a Margin stop for the whole exercise rather than a points stop. As I only put a small amount of equity in to begin with, I could afford to lose it and trade that way... However I must stress that I do not teach my own clients to trade like that! I could afford to lose that amount and was also trading in long TFs as well at the time in a much more conventional way. It was a bit of fun for a short time...

 

[4xpipcounter]

That's another way to put it. I look at betting as going to the casino and hoping to hit it big. Trading is calculated based on what the charts are showing you through the eyes of the methodology.
Probably more semantics, but sports fans make predicitons. Traders forecast based on their data that is showing on the charts.
I've viewed a prediction as just who I think will win the World Series, etc. A forecast has more concrete data associated with the prediction of the final outcome.

http://www.thefreedictionary.com/forecast



http://www.thefreedictionary.com/prediction


To differentiate between forecast and prediction is playing with words.


I thought that there seemed to be something of a consensus on T2W that trading was a matter of probabilities. You don't attempt to say what is going to happen. Rather you bet that certain outcomes are more likely than other outcomes, and with a combination of wise choices and wise money management you aim to make a profit overall.

 

[BSD]

I thought that there seemed to be something of a consensus on T2W that trading was a matter of probabilities. You don't attempt to say what is going to happen. Rather you bet that certain outcomes are more likely than other outcomes, and with a combination of wise choices and wise money management you aim to make a profit overall.

That's one first class post summing up the success relevant factors of trading in a nutshell I'd say !

 

[Black Swan]

I put £2k into a broker in the 1st week of January and closed the account (because they doubled the spread) and took out £35k end of the first week Feb and moved it to a different broker.

Wow, 33K profit from a 2 grand account inside a month...sigh...you're my hero...:smart:

 

[meanreversion]

?? Demo? Don't think you read my Post correctly. I will elaborate. I put £2k into a broker in the 1st week of January and closed the account (because they doubled the spread) and took out £35k end of the first week Feb and moved it to a different broker. More to the point I found out that the Vice President was passing my stats around the office with a precy of the method I was using and they were being sent out on email attchments to God knows where and who on the Internet - surprised you don't already have a copy. Yes I used compounding as an effective additional method to accelerate my equity curve, but then again, I was using a Margin stop for the whole exercise rather than a points stop. As I only put a small amount of equity in to begin with, I could afford to lose it and trade that way... However I must stress that I do not teach my own clients to trade like that! I could afford to lose that amount and was also trading in long TFs as well at the time in a much more conventional way. It was a bit of fun for a short time...

My word. £2k into £35k, that's v impressive. That will buy you about 3 houses in Toxteth.

 

[wirraltraders]

My word. £2k into £35k, that's v impressive. That will buy you about 3 houses in Toxteth.

I have watched and read odd posts on these forums for literally years (under a different handle) before deciding on a whim one day to comment on a particular thread. To be honest, I kind of wished I hadn't and I swore to myself that I would not reveal too much about where I have been and what I have done as it doesn't really acheive anything and can sometimes be taken the wrong way or out of context as other long term members have correctly pointed out. And now look, I've been drawn in and I'm discussing things, I swore I would never do. Ah well, not at all important in the greater scheme of things, but all things considered I think I might disappear back to the safety of my private life.. Best of luck (or should I say probablities) to you all...

 

[4xpipcounter]

If you're good, you don't need to brag about it. You are 16 posts into this site and we're suppose to pay homage to you.
We are taking it the right away. What you're saying is not real. You got lucky and won a crap shoot if that is what you really did. I made 1,000% on my demo last month just to show mr it cold be done, but it still is not real. You can play with demo money a lot differently than you do real money. You can also play $1K differently than you do $10K.
You are not proving nothing by telling us about your exploits, neither is anyone impressed. And yes, we did take you just right.
When you are completely honest about yourself, you can be "drawn in" and not worry about the context it is taken in. As successful traders we know we just let our actions do the talking for us. That is all you need!
Also you were talking about how you put in 1K and grew it to 3K. Do you undertanding if you keep doing that monthly you will grow it to 177,147,000 in 12 months. Listen up. You bring back your bankroll and show me that in writing in 12 months, and I will adopt your trading style. In understanding those numbers, we are taking you just right. You are not very credible.
Maybe I said too much in this thread. But wirraltraders, stick around. We still want you to be "one of the boys". Hey, by the way, I am not a "long term member". I've been here 1 month. That really has nothing to do with it. It is just common sense.

I have watched and read odd posts on these forums for literally years (under a different handle) before deciding on a whim one day to comment on a particular thread. To be honest, I kind of wished I hadn't and I swore to myself that I would not reveal too much about where I have been and what I have done as it doesn't really acheive anything and can sometimes be taken the wrong way or out of context as other long term members have correctly pointed out. And now look, I've been drawn in and I'm discussing things, I swore I would never do. Ah well, not at all important in the greater scheme of things, but all things considered I think I might disappear back to the safety of my private life.. Best of luck (or should I say probablities) to you all...