Dump it Here

[DaveTrade]

To clarify, I don't actually trade the systems discussed here

@Skate I was under the impression that you were an active trader, do you have any system or systems that you do trade in the markets? Your knowledge of trading suggests that you do trade or have traded in the past.

 

[Trendnomics]

Mrs Skate’s permission
I’m able to track the results of the "Zebra Strategy" & post the weekly results in the “Dump it here” thread. Mrs Skate’s new “Zebra Strategy” goes live on Monday. I’m praying that it makes money as my “meat & veg” just might be on the line.

More to follow

Skate.

Went live on a Monday? (Just like SAP, another example of a system built and stopped being traded?)

 

[Trendnomics]

I thought it would be a good educational resource to have a summary list of all Skate's systems (system name, system type, period traded, backtest CAGR, reasons for no longer being traded, etc...).

I understand this is probably a huge excercise, given the merry-go-round Skate has been on the last few years.

 

[Skate]

@Skate I was under the impression that you were an active trader, do you have any system or systems that you do trade in the markets? Your knowledge of trading suggests that you do trade or have traded in the past.

@DaveTrade, I appreciate your interest in my trading experience. As I mentioned, I have been actively trading my own strategies since 2015. Over these 7+ years, I've had my fair share of ups and downs, but thankfully more positive periods overall.

The systems I currently trade are mature ones that I try not to tinker with too much. Of course, I keep a close eye on them and evolve them as needed with changing market dynamics. I strive to avoid unnecessary tweaks though, as consistency is key.

As I've shared before, my equity curve illustrates how trading requires grit through inevitable drawdowns. Like when the market bit me in late 2018 and early 2020. Having adequate funds to trade multiple strategies over the years has been helpful.

At present, with other business interests, I'm just trading five of my proven strategies that have stood the test of time. The discipline needed to trade a select few systems profitably over many years is not easy, as you know. But it's rewarding to persevere, learn from losses, and continually hone my craft as a trader.

Skate.

 

[Skate]

Went live on a Monday? (Just like SAP, another example of a system built and stopped being traded?)

I thought it would be a good educational resource to have a summary list of all Skate's systems (system name, system type, period traded, backtest CAGR, reasons for no longer being traded, etc...).

I understand this is probably a huge excercise, given the merry-go-round Skate has been on the last few years.

@Trendnomics, thanks for your interest in the trading systems I've developed and shared over the years. I understand the desire to have a comprehensive summary. While an exhaustive list would be quite extensive, I'm happy to provide an overview of my core approach.

As you noted, I have traded various breakout and trend-following systems over time. Through continuous refinement, I've narrowed my focus to a select few robust strategies trading multiple timeframes (daily, weekly, monthly). My current live trading is concentrated on 5 proven systems with extensive backtesting and live track records.

Regarding past systems, some were shorter-term projects shared for educational purposes to exhibit the process of strategy development and feedback. Others I ultimately stopped trading due to underperformance or redundancy. The key is rigorously tracking results and being adaptable.

Providing transparency into my evolution as a trader is important to me. I aim to illustrate the ups and downs of system development through my documented experience. I appreciate you following along on my trading journey.

Search Engine
I pulled an all-nighter thus the slow response to you today. Below is the list of my current trading strategies and a list of strategies I've posted about. Doing a keyword search should display those posts so that you can read about them in detail if you are interested.

My current trading strategy
The HYBRID Strategy
The BlueWren Strategy
The PANDA Strategy
The GIFT Strategy
The Platinum Strategy

Strategies discussed in the "Dump it Here Thread"
Skate's HappyCat Strategy
Skate's Simple Strategy
Skate's CAM Strategy
Skate's FreeBalling Strategy
Skate's RubicCube Strategy
Skate's KingFisher Strategy
Skate's PocketPivot Strategy
Skate's BBO Strategy
Skate's WTT Strategy
Skate's Pirate Strategy
Skate's Silent Strategy
Skate's Mean Reversion Strategy
Skate's Monthly Momentum Strategy
Skate's Action Strategy
Skate's MAP Strategy
Skate's BOX Strategy
Skate's RSI Strategy
Skate's DSMA Strategy
Skate's Flipper Strategy
Skate's ZIG Strategy
Skate's William VIX Strategy
Skate's Matrix Strategy
Skate's EMA Strategy
Skate's Donchian Strategy
Skate's Volume Strategy
Skate's BAT Strategy
Skate's Zebra Strategy
Skate's Flying Pelicam Strategy
Skate's CCI Strategy
Skate's ORB Strategy
Skate's Daily Gift Strategy
Skate's KAMA Strategy
Skate's BMA Strategy
Skate's Reversal Strategy
Skate's HighRoller Strategy
Skate's Core Logic Strategy
Skate's Pullback Strategy
Skate's Three-Line Strike Strategy
Skate's Guppy MMA Strategy
Skate's Triple Momentum Strategy
Skate's 20Kay Strategy
Skate's 200k Strategy
Skate's Frogs on Toast Strategy
Skate's Lipstick on a Pig Strategy
Skate's SuperTrend Strategy
Skate's Bee Strategy
Skate's Cesar 20-Period Breakout Strategy
Skate's VWMA Strategy
Skate's Hann Strategy
Skate's SAP Strategy
Skate's VPA Strategy
Skate's VWAP Strategy
Skate's Volatility Strategy
Skate's Volatility-Adjusted Strategy
Skate's VR Strategy
Skate's SEXTEX Strategy
Skate's Stoch Strategy
Skate's Ehlers DMH Strategy
Skate's MACD Strategy

Skate.

 

[Skate]

Skate.

 

[Skate]

I understand my writing and posting style may not appeal to everyone
I aim to share trading knowledge I've found useful, though I admit my approach is not universally preferred at times. I do my best to pass on insights from my experience that could aid others but acknowledge my perspective is shaped by my own research and analysis methods.

My intention is not to push any specific trading strategies
But rather open up constructive discussions around the research and ideas I come across. I'm always looking to improve as a contributor to this forum. I welcome open, polite, and thoughtful critiques of my posts, as I'm here to learn as much as to inform.

Skate.

 

[Skate]

Success is precious
We should never take our good fortune for granted. The same goes for trading. Psychology and risk management are critical areas that should not be overlooked.

Patience and selectivity are key
As traders, we must wait patiently for those high-quality opportunities. System trading removes the need to trust our opinions as it's rule-based and using a take profit stops during quickly shifting markets ensures we don't get greedy.

There is a stop button
Even amid success, we must always respect the risk of ruin and avoid complacency. If trading stop working, we must adapt rather than let trading be our downfall. We must change course rather than stubbornly forge ahead.

In summary
The markets will always be there. Patience and selective entry separate the successful traders from the rest. If trading ceases to work use the stop button. Doing so will preserve capital and keep you in the game longer.

Skate.

 

[DaveTrade]

I understand my writing and posting style may not appeal to everyone
I aim to share trading knowledge I've found useful, though I admit my approach is not universally preferred at times. I do my best to pass on insights from my experience that could aid others but acknowledge my perspective is shaped by my own research and analysis methods.

You're not alone here, we are all in the same boat.

My intention is not to push any specific trading strategies
But rather open up constructive discussions around the research and ideas I come across. I'm always looking to improve as a contributor to this forum. I welcome open, polite, and thoughtful critiques of my posts, as I'm here to learn as much as to inform.

Trading is so diverse and traders normally have more experience in certain areas but anyone bitten by this trading bug always likes to learn more about what others are doing in the markets.

 

[Skate]

The current market weakness is causing more break-out failures. This makes things tricky for a BO trader.

What a crazy week
Markets can sometimes throw us a curveball with unexpected price swings, as @peter2 correctly notes. But as traders, we must trust that the market is always right, "which means", the prices at any given moment reflect all available information. We shouldn't waste time trying to rationalise every impactful movement. Attempting to analyse all the intricacies behind price fluctuations will drive us crazy.

At the end of the day
We need to focus our energy on responding to what the market is telling us right now through its price action, not the uncertain 'why' behind it. Trends and other technical indicators, not predictions, should guide our trading decisions. Implementing a buy filter to keep you out of low-quality trades is better than trying to exit early once you're already in.

The market's price action is the ultimate reality
We set ourselves up for success when we stick to trading plans based on current price dynamics rather than trying to out-think every market wiggle or hiccup. As technical traders, we don't need to understand "the why" to profit from volatility. We must recognise and respect the importance of price and act accordingly. That's the name of the game.

Skate.

 

[Skate]

'Everyone has a plan until they get punched in the face'. - Mike Tyson.

You can have a plan, a good plan, it could even be a great plan. All irrelevant. "It is the discipline brought by the individual that is important".

What causes traders to fail?
Traders fail for one simple reason: "We are human, not machines." Trading successfully requires a clinical, non-emotional attitude that goes against our natural impulses. We are wired as humans with psychological biases and reflective thinking that work against clinical trading.

To overcome our inherent flaws
A rules-based trading strategy systematises the entire trading process, taking fear, greed, and other emotions out of the picture. We are prone to making irrational trading decisions based on our biases and that's why we need explicit rules and triggers to guide our trading.

It is critical to develop a trading strategy that is tailored to your risk tolerance
Trading within your own "risk tolerance" is essential for long-term trading success. To counteract our human impulses, mechanical system trading provides an emotionless framework that can enhance any trader's ability to execute signals consistently and profitably.

Skate.

 

[ducati916]

1. What causes traders to fail?
Traders fail for one simple reason: "We are human, not machines." Trading successfully requires a clinical, non-emotional attitude that goes against our natural impulses. We are wired as humans with psychological biases and reflective thinking that work against clinical trading.

2. To overcome our inherent flaws
A rules-based trading strategy systematises the entire trading process, taking fear, greed, and other emotions out of the picture. We are prone to making irrational trading decisions based on our biases and that's why we need explicit rules and triggers to guide our trading.

3. It is critical to develop a trading strategy that is tailored to your risk tolerance
Trading within your own "risk tolerance" is essential for long-term trading success. To counteract our human impulses, mechanical system trading provides an emotionless framework that can enhance any trader's ability to execute signals consistently and profitably.

Skate.

Mr Skate,

At this point I would disagree for the following reasons:

3. What is your risk tolerance? If your account went to zero overnight, what would you do? Irrelevant whether it were mechanical or discretionary. If you are ready to re-fund and start again, your risk tolerance is about right.

2. It does no such thing. Losing money is losing money. How you lose it makes no difference to how you feel about losing it. Mechanical trading is only worthwhile if you don't lose money as compared to any other method you have tried. The important caveat here is that you have made money prior to losing money utilising a mechanical system.

1. Do you have a TRUE EDGE. Trading a pseudo-edge will lose you money, unless you are really LUCKY over time. This is often the result of a pro-longed bull market. LOL.

jog on
duc

 

[Skate]

Mr Skate,

At this point I would disagree for the following reasons:

3. What is your risk tolerance? If your account went to zero overnight, what would you do? Irrelevant whether it were mechanical or discretionary. If you are ready to re-fund and start again, your risk tolerance is about right.

2. It does no such thing. Losing money is losing money. How you lose it makes no difference to how you feel about losing it. Mechanical trading is only worthwhile if you don't lose money as compared to any other method you have tried. The important caveat here is that you have made money prior to losing money utilising a mechanical system.

1. Do you have a TRUE EDGE. Trading a pseudo-edge will lose you money, unless you are really LUCKY over time. This is often the result of a pro-longed bull market. LOL.

jog on
duc

@ducati916, you raise some fair points. Allow me to clarify my stance:

You're absolutely right, risk tolerance varies between traders, and how you qualify your own risk tolerance is key, regardless of the way you trade. Mechanical systems don't eliminate emotions or risk entirely, that's a given that iI didn't qualify all that well. I should have specified more clearly that system trading help minimise irrational decisions based on bias or impulse. If the system aligns with your risk tolerance and is robust, it improves consistency in taking signals.

I agree losing money is losing money. Mechanical systems alone don't guarantee success. Profitability depends on an edge and risk management. My intention was to highlight how system trading suppresses individual psychological pitfalls. Executed well, it can enhance results compared to discretionary trading for most.

You're correct that an actual edge is mandatory. Mechanical systems only provide a framework for executing signals, not a crystal ball. Their value lies in following a defined, emotionless process. An edge must be derived from research, backtesting, and fine-tuning over time.

# Luck runs out, proper strategy does not.

In summary, you provided an important alternative view. In saying that, mechanical systems are tools to minimize human biases and not a silver bullet. System trading success hinges on risk tolerance, underlying edge, and prudent execution, as well as something you expressed clearly in a previous post.

"It is the discipline brought by the individual that is important".

Skate.

 

[Skate]

Do you have a TRUE EDGE. Trading a pseudo-edge will lose you money, unless you are really LUCKY over time. This is often the result of a pro-longed bull market. LOL.

@ducati916, that's an interesting comment that should resonate with all trend traders. You make a fair point about a "true edge" and "pseudo-edge" during a bull market. I have to agree bull markets can create an illusion of an edge in trend trading strategies for the simple reason we are buying breakouts. Profits during prolonged uptrends may be more attributable to a rising tide lifting all boats rather than a true edge advantage.

To evaluate if an edge is real, you need to look at the trading performance across all market cycles. Another few things to be determined are (a) does the strategy successfully identifies high-probability trend setups in both bull and bear markets and (b) does your exit strategy prevent large drawdowns when trends shift?

I'm a firm believer that "optimizing and fine-tuning" a strategy across a variety of historical environments is extremely important. I'm first to admit bull markets make us all look like geniuses to some degree because it is easier to turn a profit under these conditions.

I'm also a firm believer in (a) when in doubt, "pull out" - and (b) when in doubt "stay out"

Skate.

 

[peter2]

So, is risking more in a bull market than a bear market an edge? Is applying commonsense an edge?

 

[Skate]

So, is risking more in a bull market than a bear market an edge? Is applying commonsense an edge?

@peter2, in my opinion (which can be different from others) risking more in a bull market versus a bear market does not inherently constitute an edge. Markets move in cycles, so a strategy's risk management should adapt accordingly. Risking more aggressively just because markets are rising could lead to taking excessive risk.

Applying common sense principles like managing risk, waiting for high probability setups, and staying disciplined does seem aligned with developing a potential edge. But more importantly risk should adapt to changing negative trading conditions.

Overall, sustainable edges come from the processes. Edges need to be robust and adaptive across diverse markets. Patience and discipline are important and could be regarded as an edge IMHO.

In summary, simply risking more without reason in a bull market is unlikely to be a true edge.

Skate.

 

[ducati916]

So, is risking more in a bull market than a bear market an edge? Is applying commonsense an edge?

peter2,

Is the amount of risk an edge? No.

Your edge is the probability of winning in the trade. An edge with a true 100% probability would allow any amount of risk from the funds that you have or could borrow. An edge with only a 30% probability of winning will rely (to be profitable over time) a high return-to-risk metric also.

It is the return-to-risk metric that dictates the amount of risk assumed. That is a derivative of the probability (your edge) of winning the bet.

So does a bull market increase the probability (of a long only system) of winning the bet?



From the data in the first 2 charts, the answer would be probably not. Now (obviously) this is US data for the indices, not individual stocks.

As can be seen from the second 2 sets of charts, distinguishing a bull market from a bear market, is not always easy to do.

Of course I cherry picked the last 'secular' bear market as an example. There are few alive today who would have actively traded this market. Buffett is one example, there are probably a handful of others, the point being, this current market has many of the characteristics of the 1970's.

Does commonsense or its application constitute an 'edge'?

I would argue that commonsense per se is not an edge. However I do accept that commonsense can enhance an edge in an unquantifiable manner.

I have mentioned this before: if your edge has a 50% probability attached to it, then the frequency of 6 consecutive losing trades sits at 50% also.

So if a trader had a run of 10 winning trades, the odds are rising quickly that a bad patch is on the horizon. Commonsense would suggest lowering the risk assumed in each subsequent trade, banking your winnings, as there is a 96% probability of losing trades to follow.

Conversely, after a run of 10 losing trades, the probability of 11 losing trades is 1.9%. At this point commonsense would suggest increasing your bet size which would help overcome the %needed to win back from the %lost, which after a certain point is always greater.

@Skate



To my mind, this is a function of timeframes chosen to trade in. Is the trader trading hourly, daily, weekly, monthly (or longer) timeframes?

The shorter the timeframe the greater the required accuracy in entries and exits. Short timeframes are harder to trade than longer timeframes, refer to the first 2 charts.

Timeframe is a critical component that is given short shrift. A tiny position, that runs in a trend for 2 years can return huge winnings. To return the same dollars in an hourly timeframe, multiples of capital must be risked as the return is measured in very low % return by comparison. Obviously this increases your risk assumed significantly.

Which goes to answer the first question: is the amount of risk assumed an edge? I would argue, far from being an edge or increasing your edge, it diminishes your edge, based on the daily volatility of the market and commonsense would therefore inform a different approach.

jog on
duc

 

[Skate]

Confessions of a Hobby Trader
In my circle, I'm considered a perfectionist, but when it comes to trading, I do the best I can yet often fall short. I religiously follow the trading principles I've preached, hoping to one day profit enough from trading to pass on the lessons I've learned. I started with a modest account that steadily grew as trades accumulated.

It was like owning a money-printing press
This early success convinced me I had mastered trading. I traded more aggressively, thinking the profits would never end. I began trading in July 2015 and never looked back until the final quarter of 2018 when I suffered my first major drawdown. I was shell-shocked, unable to understand why my trusted strategies were suddenly losing money. By then, I had accumulated substantial profits, but for the first time, I abandoned my trading plan and cashed out. Exiting all those open positions felt like it took all day.

The GTFO exit strategy
That experience forced me to formulate a "Get_The_Fuck_Out" (GTFO) exit strategy, so I'd never again lose control like that. I can accept losing money, but feeling powerless was intolerable.

"When in doubt, pull out" became my mantra.

With renewed confidence in my system
I traded precisely, and profits returned. Three steps forward, one step back - the crazy trading waltz. I believed losses were just part of trading, not flaws in my approach.

Until a black swan event upended everything
My GTFO filter worked flawlessly, quickly closing positions. But with positions only closed at week's end, losses mounted. COVID-19 spared no trader, but my defences the GTFO exit strategy minimized the damage. By March 2020's end, my GTFO filter lifted the trading embargo and I aggressively bought the dip, flooding my portfolio with profitable trades. But self-doubt plagued me. The nonstop buy signals conflicted with the economic carnage on the news. I was paralysed that Monday morning until my wife said, "Follow your plan. The markets don't care what we think." I committed every trading dollar available and made a fortune.

Protecting profits remained an Achilles heel
I fixated on letting profits run, reluctant to leave gains on the table. The "take profit stop" sat idle for years despite closing trades too late being a chronic problem. A pattern emerged - trends rise, crest, then fall. Breakouts either take off or fizzle out. I want no part of the fizzlers. My stale stop-loss strategy helped but needed improvement to catch the “fake outs” faster. By mastering the take profit stop, I began capturing gains before trends peaked. Occasional missed opportunities are a small price to pay.

I can't master the markets
Even strict rules can't overcome other traders' emotions. Illogical decisions disrupt logical systems. It's like driving safely only to get hit by someone else's mistake, losing time and money fixing the damage. I said 2022-2023 looked profitable but got derailed halfway through, needing months to recover lost ground. Why should I suffer for others' skittishness?

This year began with promise before outside forces intervene
Do I have an edge? I believe so, but only if the trading gods allow it. Markets fluctuate but rise over time. Protecting capital lets you endure whipsaws until sustained trends emerge. Tenacity and resilience are key. My trading journey continues.

Skate.

 

[peter2]

So, is risking more in a bull market than a bear market an edge? Is applying commonsense an edge?

Apologies for this brief post. I was becoming frustrated by the increasing complexities in the discussion about a topic, trading for profit, that is best kept simple and uncomplicated. The process is very simple, first we buy then we sell. Our goal as traders and investors is to earn profits that increase our capital over time. We can earn these profits either systematically or with luck. Relying on luck is a form of gambling and I'd rather discuss the systematic method of earning profit (ie. trading, investing).

My edge isn't just the probability of a winning trade. It includes both the probability of the wins and losses as well as the size of the wins and losses. My edge can be calculated on past results. I can identify the past market conditions and calculate my edge in the different conditions. The size of my edges vary greatly in the different market conditions. Knowing these stats allows me to risk more when the market conditions are favourable for a particular trading strategy.

I would agree with you that varying the amount at risk isn't an edge. It's not ony commonsense to increase the amount at risk when market conditions are favourable and the system edge is at it largest. Perhaps this is a skill learned from experience?

My edge is calculated from a past batch of trades and I know my edge in different market conditions. How do I apply this in the future? In the future, the edge becomes an expectancy and the size of this expectancy is unknown. It may even be negative for a while. It's my role as a trader to assess the current market conditions and to apply the appropriate trading strategy with the appropriate amount to risk in order to create my edge in the future.

 

[Skate]

Apologies for this brief post. I was becoming frustrated by the increasing complexities in the discussion about a topic, trading for profit, that is best kept simple and uncomplicated. The process is very simple, first we buy then we sell. Our goal as traders and investors is to earn profits that increase our capital over time. We can earn these profits either systematically or with luck. Relying on luck is a form of gambling and I'd rather discuss the systematic method of earning profit (ie. trading, investing).

My edge isn't just the probability of a winning trade. It includes both the probability of the wins and losses as well as the size of the wins and losses. My edge can be calculated on past results. I can identify the past market conditions and calculate my edge in the different conditions. The size of my edges vary greatly in the different market conditions. Knowing these stats allows me to risk more when the market conditions are favourable for a particular trading strategy.

I would agree with you that varying the amount at risk isn't an edge. It's not ony commonsense to increase the amount at risk when market conditions are favourable and the system edge is at it largest. Perhaps this is a skill learned from experience?

My edge is calculated from a past batch of trades and I know my edge in different market conditions. How do I apply this in the future? In the future, the edge becomes an expectancy and the size of this expectancy is unknown. It may even be negative for a while. It's my role as a trader to assess the current market conditions and to apply the appropriate trading strategy with the appropriate amount to risk in order to create my edge in the future.

@peter2, I agree that keeping trading simple and avoiding unnecessary complexity is wise, and focusing on the core principles of your trading strategy is key. However, having an edge beyond just the probability of wins/losses seems reasonable, like maximizing reward relative to the risk taken on each trade.

Understanding how one's edge varies across changing market conditions also makes sense. Varying position sizing based on edge and market conditions is sensible, not just common sense, though it's wise to be careful not to overcomplicate things.

Looking at the past performance of a strategy to estimate future edge and expectancy is standard practice, though realising the future may differ and require flexibility. Assessing current conditions and applying suitable strategies is prudent, being adaptive while sticking to proven, simple principles is a good approach.

Skate.