Did you suffer before doing well or vice versa?

[MichaelD]

in the face of a large drawdown or what have you, the operator is not looking for a better way, a better system, until by some pre-determined notion, it is decided not to be working. And that goes against every notion I hold.

If you aren't constantly looking for a better way, what is anyone actually doing?

This is not correct. When a given system reaches failure point it is retired. That is all. It is retired before it does excessive damage to trading capital.

Whilst a system is performing to expectation, research into improving the system is an ongoing process based on completed trades, but the system will not be modified or changed unless it can be proven that the change is likely to improve the system (limits on proof acknowledged but that's a whole area of discussion on its own).

As a specific example, my ASX long term trend following system started off with a rule that trades would be opened and closed at 11am or so as that is what many books suggested to be a good time ("amateurs at 10am, pros at 11am"). Observation of price action on opening/closing trade days lead me to question this trading truism and actually backtest around this - the system now closes positions on the OPEN and opens them on the CLOSE which is providing better results - the system has evolved as it has traded. There have been several changes to the system as a result of this ongoing process.

Developing and trading systems is an ongoing, fluid process. I currently trade 3; one is in full production mode, one is currently in trial mode (small position sizes) and one is 1/2 way through paper trading. They all utilize markedly different timeframes and exploit very different market edges. Also in development at present are 2 other systems for different trading instruments. The vast bulk of systems I work on don't make it past the initial backtesting stage, but the point is that systems development is an ongoing work in progress, not a process that stops when a system commences trading and resumes when the system fails.

 

[nizar]

Imagine how useless I would be as a system trader having to wait 200 days or more for some significant feed back. I bet I would start really messing up the system after about...... 2 days

Not all system traders trade longer term. The system I am designing at the minute will be taking between 50-80 trades per day.

The vast bulk of systems I work on don't make it past the initial backtesting stage, but the point is that systems development is an ongoing work in progress, not a process that stops when a system commences trading and resumes when the system fails.

I agree with this.

 

[blaster]

Not all system traders trade longer term. The system I am designing at the minute will be taking between 50-80 trades per day.



I agree with this.

Hey Nizar
So do you design systems then ?

From the sounds of the thread and forum in general well 1 . Most people don't think you can make a living trading .

Secondly , now this is only how I'm getting it but most people don't sound as though they have stuck to the one system or format for very long to this day without bouncing onto the next one or a variation.

And that makes me think that between all the people trading even in just this one site , we must have tried every system ever invented and still looking so what hope have we got anyway , maybe one is right after all .


Cheers

 

[Trembling Hand]

And that makes me think that between all the people trading even in just this one site , we must have tried every system ever invented and still looking so what hope have we got anyway

Your right none,
and that being the case why are you still trading?

 

[nizar]

Hey Nizar
So do you design systems then ?

From the sounds of the thread and forum in general well 1 . Most people don't think you can make a living trading .

Secondly , now this is only how I'm getting it but most people don't sound as though they have stuck to the one system or format for very long to this day without bouncing onto the next one or a variation.

And that makes me think that between all the people trading even in just this one site , we must have tried every system ever invented and still looking so what hope have we got anyway , maybe one is right after all .


Cheers

I had to read this post 3 times, and I still dont quite get your point.

But going by your conclusion, i recommend you stop trading, and save yourself some money and a hell of a lot of time and effort.

 

[chops_a_must]

Hey Nizar
From the sounds of the thread and forum in general well 1 . Most people don't think you can make a living trading .

Secondly , now this is only how I'm getting it but most people don't sound as though they have stuck to the one system or format for very long to this day without bouncing onto the next one or a variation.

You clearly can. For some people that is by way of "mechanical" trading, dicretionary or arbitrage trading. The key is to find what works for the individual. Like in everything though, there will be people who wont be able to make anything work.

But you cannot remain static. Even the mech heads here have tacitly admitted here that to remain profitable, there has to be a discretionary element. What discretionary elements work, are probably up for discussion. One would think that an intuitive or intangible element, has to be present to a certain extent as well...

 

[blaster]

You clearly can. For some people that is by way of "mechanical" trading, dicretionary or arbitrage trading. The key is to find what works for the individual. Like in everything though, there will be people who wont be able to make anything work.

But you cannot remain static. Even the mech heads here have tacitly admitted here that to remain profitable, there has to be a discretionary element. What discretionary elements work, are probably up for discussion. One would think that an intuitive or intangible element, has to be present to a certain extent as well...

Chops what do you mean by mechanical trading ?
Repetition of a system they have that works or ?

Cheers


Nizar , not really my own personal conclusion at all but people do seem to read that way everywhere you go , it really surprises me actually.

Personally I feel there are many ways to trade very profitably and many versions of those ways and an abundance of opportunity even in the market we have right now .

Cheers

 

[MichaelD]

The key is to find what works for the individual. Like in everything though, there will be people who wont be able to make anything work.

Fully agree with this.

Even the mech heads here have tacitly admitted here that to remain profitable, there has to be a discretionary element.

Completely disagree with this - hopefully this is not what you took from my post on trading system development continuing after launch.

Each and every system that I have ever tried to add a discretionary component to has been actively harmed by the process.

"Sure thing" trades on a chart are usually anything but.

 

[noirua]

For new investors it depends where you come into the markets. I came in during the 1970's resource boom and made quite a fortune, and then lost it all during the 1987 crash period.
Doing well now that the resource boom has returned and now a more savvy investor who keeps a lot of cash to fall back on.

 

[blaster]

Fully agree with this.



Completely disagree with this - hopefully this is not what you took from my post on trading system development continuing after launch.

Each and every system that I have ever tried to add a discretionary component to has been actively harmed by the process.

"Sure thing" trades on a chart are usually anything but.

Hi Michael

Found that one myself too , the sure thing chart stuff . Although I am a big believer in charts , it has backfired plenty .

What would you say was one of the best indicators if any ?

Cheers

 

[blaster]

For new investors it depends where you come into the markets. I came in during the 1970's resource boom and made quite a fortune, and then lost it all during the 1987 crash period.
Doing well now that the resource boom has returned and now a more savvy investor who keeps a lot of cash to fall back on.

Must have hurt Noirua !

So did you restart years later with a whole new batch of cash or held and waited - a bloody long time ?

Cheers

 

[MichaelD]

What would you say was one of the best indicators if any ?

Price

(and Volume, although not many of my systems use volume information)

 

[Wysiwyg]

For new investors it depends where you come into the markets. I came in during the 1970's resource boom and made quite a fortune, and then lost it all during the 1987 crash period.
Doing well now that the resource boom has returned and now a more savvy investor who keeps a lot of cash to fall back on.

Nice one Noirua, good to see you doing okay.A good example of `the market giveth and the market taketh away`.

 

[chops_a_must]

Completely disagree with this - hopefully this is not what you took from my post on trading system development continuing after launch.

Each and every system that I have ever tried to add a discretionary component to has been actively harmed by the process.

I'd say that everything you choose to alter, choose to investigate still has a discretionary element.

Even deciding what system to investigate, what strategy to compute, has a discretionary component.

After all, even turing machines still have to make a decision.

I'm enjoying the argy bargy... Nice to be debating against someone with intelligence.

 

[noirua]

Must have hurt Noirua !

So did you restart years later with a whole new batch of cash or held and waited - a bloody long time ?

Cheers

I was bailed out by an investment in Endeavor Resources (St Barbara Mines) in the mid 1990's when they recovered from about 2 cents to nearly $3.00.
In 1987 they crashed from about 90 cents to around 20 cents in about 10 days.

How did I get it so wrong? In the 1973-76 Great Bear Market, gold shares doubled. Therefore it stood to reason that the same would happen again, it didn't.

Still, those who suffered in the dotcom crash have a similar story.
"It's different this time", no, "it's always the same".

 

[blaster]

I was bailed out by an investment in Endeavor Resources (St Barbara Mines) in the mid 1990's when they recovered from about 2 cents to nearly $3.00.
In 1987 they crashed from about 90 cents to around 20 cents in about 10 days.

How did I get it so wrong? In the 1973-76 Great Bear Market, gold shares doubled. Therefore it stood to reason that the same would happen again, it didn't.

Still, those who suffered in the dotcom crash have a similar story.
"It's different this time", no, "it's always the same".

Great story Noirua thanks for sharing.

I'm hoping AND does it for me wish I got that at 2 cents .
A portfolia I built through recommendations sunk like the preverbial, for now anyway but AND - god luvem has doubled which is helping things in that lot a bit .

The one that really hurt is I was going to dump the whole portfolio and instead just spend that whole batch on AND to begin with because it looked like such a good company.
But i did as they advised and spread it out , ouch.
Expecting those stocks will recover though they all still read well so the fat lady ain't sung yet.

Cheers

 

[MichaelD]

Blaster,

Based on a review of this thread and some other posts of yours in other threads, it seemed appropriate to offer this up at this point in time.


It is said that there are 4 stages of trading ability;

1. Unconscious incompetents,
- Traders who have no idea what they are doing and don't realize it. If they don't move on from this, they invariably blow up, but it will be someone else's fault. They often have had a run of luck to date which they have confused with skill. The vast bulk of traders. They don't have a written down trading plan, much less trade consistently. After all, they don't need a plan, since it's easy to make a killing on the markets for someone as naturally gifted as them.

2. Conscious incompetents,
- Traders who have woken up to themselves and realize that they didn't know what they were doing but merely got lucky. These traders now have some idea of what little they actually know and some idea of how to go about finding out what they need to know.

3. Conscious competents,
- Consistent traders with positive expectancy who understand why they have a positive expectancy and act accordingly.

4. Unconscious competents.
- The mythical final level where trading is intuitive and consistently profitable.


You are at stage 1, with the faintest glimmerings that there even exists a stage 2.

 

[Trembling Hand]

:iagree: I'm with Michael on that comment

 

[peter2]

:iagree: Blaster, it is up to you now.

 

[sidswingerhead]

Ah, the 4 levels of competence.................... "Goes with most things in life".



The hardest step is realising that you are still at stage 1.

I doubt it possible to ever truley be at stage 4 competence as a trader as the variables are too great. But stage 3 is a very achievable goal.