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Some further thoughts on this:



This methodology looks at the market as if the trader were playing roulette: that is to say where the possible outcomes were (are) unaffected by what was bet and by how much was bet.

The market is not roulette (statistical) it is like poker, where the outcomes depend on the behaviour of the other market participants, whose behaviour would change in response to their opponents.

This is (the) crucial difference between backtesting historical data looking for statistical relationships with a set mechanical formula and Peter's rolling adaptation to market events happening in the now.

You may argue, but my position size is so immaterial to the market, true: but the mechanical model is predicated on the big money, the flow of capital. When they change because the rules suddenly change overnight, we as small traders get caught in that change. There are all manner of market busts that bear testament to this phenomena.

jog on
duc
 
ducati916 said:
where the outcomes depend on the behaviour of the other market participants, whose behaviour would change in response to their opponents.
Click to expand...

@ducati916, you make some fair critiques of mechanical trading systems, but also you go too far in dismissing system trading true worth. Markets do have elements of statistics and probability that can be quantified, so a mechanical system built on rigorous analysis of past data can identify valid historical tendencies. But at the same time, you are correct when you reference that markets involve human psychology and shifting dynamics, so historical patterns do not persist indefinitely. Mechanical systems require ongoing monitoring and adaptation as market conditions evolve, which I have reiterated on numerous occasions.

The key is finding the right balance
Mechanical systems should not be followed blindly, and that is the reason we have a trading plan that overrides and sits on top of all generated signals. There are some things that can't be coded into a strategy but they can provide a statistical edge if used adaptively. The goal for me should be a trading strategy grounded in data but also flexible when market conditions change.

Skate.
 
This discussion has been quite productive
Just because I have traded profitably over the years trading a series of mechanical systems is not to say it wasn't just a matter of luck.
As a trend trader, I know firsthand that market conditions play a huge role in those results, regardless of the soundness of my strategies or the commitment to executing those trades. Even the best-crafted trading approach that works well in certain environments can hit rough patches when the markets change. I'm starting to shift my thinking, acknowledging that market conditions play a huge role, and my past performance may partly come down to luck rather than trading a repeatable strategy.

Trading is unpredictable
I've learned through experience that even well-designed mechanical systems and discipline in execution can't fully overcome the impacts of shifting market cycles. During such times, doing "everything right" as a trend trader is not always sufficient to produce gains or even preserve capital. It's wise to acknowledge that the markets themselves account for a significant portion of trading outcomes, often more so than our strategies or execution.

Skate.
 


So courage is an edge...but a debater could say, it takes courage and wisdom not to buy fragmented information....gawd, this is getting more and more messy.....
 
eskys said:
So courage is an edge...but a debater could say, it takes courage and wisdom not to buy fragmented information....gawd, this is getting more and more messy.....
Click to expand...
@eskys, I appreciate you having your say, however, I don't want to dismiss your input as unproductive criticism. In saying that, you might want to expand on your last post, so it becomes clear, as to "what you think" on the topic being discussed.

@Captain_Chaza using the word "courage" was perhaps misleading to you
I agree that conviction alone doesn't justify trading on fragmentary data. Discipline in waiting for high-probability setups and having the "courage or conviction" to take the trade that avoids adding undue risks is more to the point being made.

Lively debate helps sharpen our thinking
As long as we focus on principles rather than personality critiques. With open and respectful dialogue, I believe we can have a thought-provoking discussion that benefits all of us.

Skate.
 
How is that seen as an attack on personality, Skate?

Captain said how do we sell anything to someone who isn't brave....something along those lines.
My reply to that is: it takes courage and wisdom not to buy what's being peddled. If we were foolish, or lacking courage, we'll succumb to peddlers peddling rubbishy wares
 
Skate said:
I'm starting to shift my thinking, acknowledging that market conditions play a huge role, and my past performance may partly come down to luck rather than trading a repeatable strategy.
Click to expand...

Hitting the pause button
Even as an experienced trader who's enjoyed profitable periods in the past, I need to stay humble amidst the forces impacting the markets right now. The huge losses experienced recently by skilled professionals like Nick Radge prove that no one is immune to changing conditions. By week's end, I will no longer be a trader. At times like these, it's best to protect capital and retain a realistic perspective about the markets.

Sustaining an ongoing massive drawdown
Seeing traders such as @Nick Radge caliber incur 7-figure drawdowns shows that markets can quickly turn against you, no matter how reliable your strategies have been historically. If I were facing similar mounting losses while declaring "All my strategies remain well within tested boundaries," you'd be justified in thinking I'm delusional or lacking self-awareness.

The truth is, as a trader
"I can control far less than I'd like to admit." No amount of self-belief or discipline on my part can overcome sustained shifts in market dynamics that wreak havoc on my portfolio. Facing such brutal periods is a hard but necessary lesson in humility for any trader. I appreciate @ducati916 pushing me to check for any overconfidence or sense that I've mastered trading. Discussions like this are reminders that I need to stay adaptable and humble in pursuing trading excellence over the long haul.

Skate.
 
Last edited:
eskys said:
How is that seen as an attack on personality, Skate?
Click to expand...

@eskys it was the negative tone of your original comment delivered in a combative way that made your response unconstructive. Your post came across as an unnecessary personal attack rather than a good-faith disagreement. The goal of this thread is for sincere intellectual debate, ideas should be shared respectfully even when challenging other member's views.

Skate.
 
Skate, don't let this market discourage you.....trading is all about being flexible and adaptable to all market conditions. We all have draw downs at a time like this....if you have to know, I'm now down 2,678 as today. I'm only lucky because I held a lot in cap notes (and emptied one portfolio completely, other than cap notes)and when they were up, I off loaded a fair bit....I'm not smart, Skate....I take it as luck plays a big part..... with assistance from different quarters, in real life.
 
I take that on board, Skate (my last post crossed yours) Thank you for your feedback.

The old geezer said that too....I get cross with him handling canvassers money for rubbish they peddle at the warehouse/office that I stuck a 'no canvassers please' sign on the door in the past.....that's why I responded the way I did to Captain's post (see how I said it was getting more and more messy in my response to him?

Since I'm on the subject.....people who have our interests at heart are often our harshest critics. I didn't reply to the good ole Captain's post in the Storm thread...but I'd like him to know now, that I appreciate his last response to me.... his heart is in the right place
 
eskys said:
Skate, don't let this market discourage you. I'm now down 2,678 as today
Click to expand...

@eskys, last year was a profitable year and July this year was massive. August on the other hand is only slightly up.

FYI - I had a small win today


As a follow up
Having a pause from trading will allow me to refresh.

Skate.
 
What I mean by the expression
"Brave and Loyal " is that It takes a lot of COURAGE to throw
All Fundamental Analysis Overboard
All the Bull Tish we are fed and have grown up with and
All Academics Overboard
Do you agree that this would take a Lot of COURAGE?
Then it takes a lot of LOYALTY to act instinctively on Technical Analysis ONLY

Eg: How many of you hoisted Uranium this month?

Anyway , So far, So Good
It was all in the Charts
Salute and Bon Voyage
 
Sorry Capn Skates

In all the excitement of the day
I forgot to post my Uranium Mast of Sails performance for this day

I hope you did not think I was trying to be Humble?

PDN + 8.23 %
BMN +8.22 %
DYL +6.78 %
URNM (ETF)) 4.64 %
LOT + 4.44 %
AEE + 4.17 %

Salute and Bon Voyage
 
Last edited:
Skate said:
@eskys, last year was a profitable year and July this year was massive. August on the other hand is only slightly up.

FYI - I had a small win today
View attachment 161257

As a follow up
Having a pause from trading will allow me to refresh.

Skate.
Click to expand...
That's a massive win in one day, nothing to sneeze at, Skate. Congratulations.

Don't stay away too long though. Volatility is where serious money can be made when we are focused. Have a good rest, Skate....by the way, I made nothing today. Too busy chasing people ...thought the manager had lost the plot when staff were paid once this week and last week. (So happened no one was able to get into MYOB to make payments while overseas. I didn't know that no one bought a Swiss sim card)
 
Captain, I thought of you today when I looked at PDN, also looked at it yesterday. It was up both days. I thought I should have listened, but alas.......

It takes more than courage, Captain. It takes conviction, the belief in yourself, faith that your picks are right and will be profitable. Congratulations.
 
What's the purpose of trading?
As traders, we buy a position in the hope that "sometime in the future" we will be able to "offload the position" to someone at a "higher price" than when we brought it. Traders make money in the markets by exploiting changes in prices. Taking this concept one step further trading is patiently waiting for high-quality opportunities and exiting quickly when a position fails to perform.

The markets constantly throw curveballs
Trying to rationalise all the curveball moments will drive you crazy. It's better to focus energy on responding to what the markets are saying through technical analysis than anything else. Overall, quality entry filters are better than trying to exit early once in a bad trade. Profiting from volatility is achievable but you will certainly take your "hits" even when trading a rules-based system.

Consistency and conviction
Trading within your risk tolerance using a mechanical system enhances consistency and that's about all. Knowing when not to trade is also important. Even strict rules can't fully overcome the emotions of some traders. After trading for a while, you start to realise you control less than you'd like to admit.

Letting profits run too long has remained an issue for trend traders
By incorporating a "stale stop exit" strategy, combined with a "take profit stop," I began capturing larger gains before trends peaked and turned. It's foolish to let a trend peak and reverse before deciding to exit. Waiting for "confirmation" that a trend is over, costs money.

In summary
The markets play a bigger role than any mathematical edge wrapped inside any trading strategies. Pursuing trading excellence can be futile because achieving it is so difficult. The key is staying flexible, adapting to changing conditions, and retaining a beginner's mindset to keep learning and improving. Accepting imperfection while "targeting gradual progress" is essential on the long path toward trading profitably.

Skate.
 


Trading with Adaptive Support
The idea of buying high and selling higher was initially appealing when starting out in trading. However, after research and experience, I found flaws in this simplistic approach using fixed historical highs. Over the years, I've developed alternative entry conditions to join emerging trends.

A New Perspective
What if instead of buying new "highest highs", we look to buy breakouts above recent "lowest lows"? This aims to identify the start of new uptrends by looking for closing prices breaking above dynamically identified support levels. The core logic identifies key support based on adaptive volatility measures rather than fixed static prices. This gauge of support breakout significance adjusts to changing market conditions. Wider breaks are required in high-volatility environments, while tighter breaks qualify in calmer markets.

Robust Signals
An exponential moving average crossover adds a trend filter to help confirm bullish momentum. Taking trades only in the direction of the faster EMA improves timing and avoids false breakouts. Together, these mechanisms help identify significant support breaks with momentum more robustly.

Adapting to Markets
The dynamic analysis continuously monitors current conditions to improve entry signals. This systematic approach looks to capitalize on emerging uptrends as they develop from consolidation. The dual breakout technique combining adaptive support and trend analysis aims to provide a reliable framework for trend-following strategies in evolving markets. The key focuses on adaptive analysis, robust signal generation, and capitalizing on momentum from consolidation breakouts.

Skate.
 
My current thinking of identifying emerging uptrends
The core buy logic is straightforward - buy if the closing price breaks above the prior 20-bar lowest low plus twice the 10-bar Average True Range (ATR). This aims to identify closing prices breaking out above recently established support levels, signaling the potential start of an uptrend. The ATR component adapts the support breakout trigger to evolving volatility conditions. Wider breaks are required during volatile markets, while smaller breaks suffice in calmer conditions.

An exponential moving average (EMA) crossover filter is added for confirmation
Buying only occurs if the faster EMA is above the closing price, indicating bullish momentum. Together, these dynamic mechanisms identify significant support breaks with upside momentum. The adaptive analysis seeks to improve the timing and robustness of entry signals compared to fixed non-adaptive approaches.

Dual breakout technique
This systematic approach looks to capitalise on emerging uptrends as early as possible after periods of consolidation. The dual breakout technique combining adaptive support and trend analysis provides a reliable framework to catch uptrends in their infancy across various market environments. The straightforward logic, adaptive capability, and results demonstrate the effectiveness of this type of dynamic trend-following strategy. The backtested results already appear promising for this basic dual breakout system.

Skate.
 
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