How to trade the Unholy Grails system?

[Elfanger]

I have read and understood (I think), the systems presented in Nick Radge's book 'Unholy Grails'. I am interested in trying out one of the systems presented in the book.

The problem is, I am not sure how to actually go about it. I take it some software is needed, I cant just login to Commsec and look for the correct pattern myself?

Is there some sort of guide available for setting this up?

Thanks.

 

[CanOz]

I have read and understood (I think), the systems presented in Nick Radge's book 'Unholy Grails'. I am interested in trying out one of the systems presented in the book.

The problem is, I am not sure how to actually go about it. I take it some software is needed, I cant just login to Commsec and look for the correct pattern myself?

Is there some sort of guide available for setting this up?

Thanks.

Typically a software application such AmiBroker is used. You purchase the software for a couple hundred bucks, then subscribe to a data supplier such as PremiumData. You load the code up or try and program it yourself.

Every nite you run exploration to identify the trade candidates.

You put you orders in through a broker, such as Interactive Brokers.

Alternatively you might ask Nick how they could trade the strategy or something similar for you.

CanOz

 

[qldfrog]

if it helps, I went thru the same path:
so I bought Amibroker and a data feed, then started building my formula based initially on the book.
I made some mistakes in my implementation and leaked most of the profit I could have had on the bull market last december to february, so beware and if not in a hurry maybe play a paper portfolio (play) initially

also be careful when you try a system about what are your start/stop loss value (lower of the day, end of day etc)
in the volatile environment we have, it made a difference (I paid dearly for that one too)

anyway, I consider this as a learning fee, and not much anyway as opposed as what i can loose in a day like today!!!
Hope it helps

 

[tech/a]

Which one do you want to trade?

 

[Elfanger]

Thanks for the replies guys.

At the moment, I also have a susbscription to thechartist.com and have been looking at the recommendations there.

I am interested in these two strategies:

- 20% flipper
- Bollinger Band Breakout

Thanks.

 

[Porper]

Thanks for the replies guys.

At the moment, I also have a susbscription to thechartist.com and have been looking at the recommendations there.

I am interested in these two strategies:

- 20% flipper
- Bollinger Band Breakout

Thanks.

Elfanger, the Growth Portfolio is based on the same concepts as the Bollinger Band Breakout.

 

[wombat40]

Thanks for the replies guys.

At the moment, I also have a susbscription to thechartist.com and have been looking at the recommendations there.

I am interested in these two strategies:

- 20% flipper
- Bollinger Band Breakout

Thanks.

These 2 systems are the 1s i trade ..20 flipper on Russ 3000 and the BBO on the aussie market...you Def. need amibroker. I use to use Bullcharts but gave it the flick and bort AB cos the systems are write for it !!

 

[RandR]

Which one do you want to trade?

Hey tech,

because there is a little bit of talk about the systems in Radge's book, im intrigued to know, if someone put a gun to your head and made you pick one (other then techtrader of course) what system out of those discussed in the book would you trade with and why?

 

[Lone Wolf]

If you want to trade one of these systems yourself, it's just not realistic to manually go through hundreds of stocks every day, filtering the ones that don't meet your criteria and calculating price changes to see which ones you want to buy/sell.

What you need:
- Amibroker - You could use other software, but Amibroker is reasonably priced and will allow you to write your own system code (or use someone else's). You can then backtest your system over any period of time with a range of variables to see how it would have performed.

- Data feed - You'll need end of day data on the stocks you want to trade in a format that's compatible with Amibroker. If you're putting you hard earned on the line I'd recommend you pay for reliable data. There are a few, but I personally use "Premium Data" and it integrates with Amibroker just fine.

- System code. You can purchase the Amibroker code from The Chartist (in the store under turnkey systems), or you can have a go at writing the code yourself from what is discussed in the book.

- A thorough understanding of the system (and the software). Whether it be your code or the turnkey system, understand what it's doing. Thoroughly test the system over various time periods and with different groups of stocks (all ords, ASX200 etc). Change the systems variables and note how it affects past performance. Know the stats - What's your average win/loss, biggest win/loss, biggest drawdown, longest loosing streak. Where do you make your money?

- The confidence to actually trade the system. - Comes from understanding the system. The backtested results are only relevant if you actually follow the systems rules. If the system says buy, but you say "No, I don't like the look of that chart". Then you're no longer following the system and the results are no longer valid. Some people can be more successful by applying a bit of discretion to their system, while others manage to ruin it completely. Take note of the worst performance in the backtest, ask yourself if you could keep trading through that tough period. You're not looking for the system that makes you the most money on paper, you need a system you have the confidence to continue trading even during periods of drawdown or going sideways.

- A broker to place trades with. The software will tell you what to buy, but you'll place the trade yourself with a broker of your choice. Be sure to include the cost of commissions when you backtest.

- Trading capital - The size of your starting capital can have a big impact on the profitability of the system. Make sure you backtest with an amount of capital you are actually going to use.

If computers aren't your thing, then this could be a long journey for you. Amibroker is good, but it takes some research and practice to get the hang of it. Howard Bandy has written a now free book "Introduction to Amibroker" which will be helpful. The search function of this forum will also be helpful.

 

[qldfrog]

.

+1
your summary is much better than mine
100% agree with you and I am just at the start of a long process myself

 

[tech/a]

Hey tech,

because there is a little bit of talk about the systems in Radge's book, im intrigued to know, if someone put a gun to your head and made you pick one (other then techtrader of course) what system out of those discussed in the book would you trade with and why?

With the benifit of hindsite all of them.
From as early as this trend started.

But at anyone time we don't know whether we will get a strong trend or an oscillating market or with some instruments ---- flat.
Pros insist that you need to be following your system as long as it's performing within it's tested results.
We can never be sure when the most ideal conditions will materialize---going forward.
We can anticipate and we can program as Nick has in his systems and I in mine---filters which keep us from buying in less than ideal conditions.

I've been discretionary and will be ensuring I have longer term position trades in the market going forward.
When the time is right I'll be trading systems on stocks once again.

LONE WOLF

I don't agree with your statement about if you" don't like the chart" and choose not to trade that chart your system testing results become invalid,

If you've tested your system rigorously you'll realize that the test itself won't take every possible trade---capital generally doesn't allow it.Monte Carlo testing will also start each Portfolio at different start dates and different stock combinations.
So it shouldn't matter if you place some discretionary element into your system provided it doesn't add or subtract a condition or parameter.
That's been my experience.

 

[Lone Wolf]

LONE WOLF

I don't agree with your statement about if you" don't like the chart" and choose not to trade that chart your system testing results become invalid,

If you've tested your system rigorously you'll realize that the test itself won't take every possible trade---capital generally doesn't allow it.Monte Carlo testing will also start each Portfolio at different start dates and different stock combinations.
So it shouldn't matter if you place some discretionary element into your system provided it doesn't add or subtract a condition or parameter.
That's been my experience.

Tech, I agree, invalid was a bad choice of words. Your results will still fall within the backtested range. But the full list of Monte Carlo possibilities are no longer available to you since you've added another criteria at the buy stage.

In the backtest you probably told the system to randomly choose which buy signals to take with your available capital. But In your real portfolio you make the choice by passing the candidates through another filter, your brain. The affect of this additional criteria was never specifically tested for. You are now skewing the results within the expected range. But you don't know if you are skewing your results to the upside of the range or the downside.

However, what you say is true. If you run a long enough Monte Carlo simulation, then regardless of how you choose which buy signals to take, one of those random portfolios in the simulation will match your real portfolio. So I believe you're arguing that even if you add an extra criteria at that stage, your results will still fall within the expected range of the simulation.

When I first started trading a system I backtested with random selection of buy signals, but in my trading I filtered the charts by what I liked the look of. At the time, what I didn't like the look of was any chart that moved up "too fast" in recent days. My logic being that I've missed the boat and it's probably going to pull back now. But what I noticed as time went on was that many of those trades I skipped went on to even greater highs. While the more tame ones I selected remained rather tame. So my real results were skewed to the lower end of the Monte Carlo tests. But yes, the results were still within the expected bell curve.

I still believe that second guessing the system is a bad habit for a beginner system trader to get into. First they skip trades because they don't like the look of it. Then they skip trades because "I think the market is about to tank" Or they backtest with 20 open positions but only open 10 in their real portfolio because they're worried about them all going south at the same time. Then they claim the system is broken because it's not working as expected.

 

[tech/a]

Still disagree
I've had 15 candidates picked each time I run a scan
Everyday I run it.
At the time I run the search I may have one in my portfolio
Exited so I only have one spot.
This is common in any of the 38 systems I have so far designed.

Seriously think about what your saying.
It just doesn't happen like that!
Picking the first middle or last chart which has the correct buy criteria
Satisfied will place you in the range from the mean.
You can't possibly tell wether a random selection or a chosen selection will
Outperform each other.
The selections ALL satisfy the buy criteria.

At some point infact most points you'll have to select a stock from those
In a list when you only have one slot to fill.
Using your grey matter or a dart won't guarentee which out performs which.

So if it makes you happy to brain scan the charts before you buy them
Like I DO I say go ahead !

If your results are under at the low end of your mean.

DONT EVER TRADE DISCRETIONARY!

 

[CanOz]

Well this is an interesting discussion hey...

Wouldn't have picked you Tech for a guy that would try and take every signal until you ran out of capital...but i suppose in part that's the same thing you're saying too, it wouldn't matter if you ran out of capital either.

Interesting, can this be tested? I guess we could add code to flipper to ignore a random set of trades and then compare results....

OR just ask Nick..,lol! Perhaps he's tested it.

Anyway, very good points of view, very informative.

CanOz

 

[Lone Wolf]

I'm not sure if you realise this so I'll say it first. When I talk about people adding their eyeball criteria to the selection criteria - I'm not just talking about picking the candidate you like the most. I'm saying that by applying an eyeball filter, there will also be times where you have capital to invest, but you keep the cash on the sideline because you don't like the look of any of the candidates your system suggested. How can you say that doing this makes no difference whatsoever to the outcome? In one case you're 100% invested, in the other you have one trade worth of cash in the bank.

Still disagree
I've had 15 candidates picked each time I run a scan
Everyday I run it.
At the time I run the search I may have one in my portfolio
Exited so I only have one spot.
This is common in any of the 38 systems I have so far designed.

Yep, with you so far.

Picking the first middle or last chart which has the correct buy criteria
Satisfied will place you in the range from the mean.

Yes you will be in the range of your backtested results. But you can manipulate where in the range you end up by adding additional criteria.

You can't possibly tell wether a random selection or a chosen selection will
Outperform each other.
The selections ALL satisfy the buy criteria.

But you can tell if a random selection will outperform a chosen selection. That's why we wrote the system rules in the first place. We identified criteria that narrow the field down to the ones most likely to give better performance. If you then narrow the field even further with additional criteria, you're changing the outcome once more.

At some point infact most points you'll have to select a stock from those
In a list when you only have one slot to fill.
Using your grey matter or a dart won't guarentee which out performs which.

Agreed. Just as there is no guarantee that our system generated buy signals will outperform the ones it filtered out. But we know that over time our criteria will cause the results to skew in our favor. In the same way, using your grey matter (assuming you always look for the same thing) over a random selection will also cause a skew in the results over time, one way or the other.

If your results are under at the low end of your mean.

DONT EVER TRADE DISCRETIONARY!

If what you say is true then my discretionary picking of candidates had no affect on the outcome. So it has no bearing on my skill in discretionary trading.

Look Tech, I'm not trying to undermine you. You probably have more knowledge and experience in the area right now than I will ever have in my life. And if the two of us were to disagree I'd advise people to follow your lead, not mine. One of us doesn't understand where the other one is coming from. It's usually me. :

Lets take Tech Trader for example. You have previously stated that there are additional eyeball filters you apply to Tech Trader after it spews out a list of buy signals. Why do you apply these additional criteria if they don't make any difference to the outcome? Because you know that they do make a difference. Any time you add an additional criteria, you change the outcome in some way.

Lets use a pseudo code example:

Backtest code:
Buy signal =
Price has risen 20% in the last 10 days.
Sell signal =
Price has fallen 20% from its high.

Real portfolio trading decision:
Buy signal =
Price has risen 20% in the last 10 days AND (eyeball test) the last bar closed in the top half of the range for the day.
Sell signal =
Price has fallen 20% from its high.

You're telling me there will be no difference between the results of the above two examples? Whether you program the buy criteria in, or add it in later as an eyeball test is irrelevant. It still changes the criteria by which the stocks get chosen and therefore changes the results.

 

[Garpal Gumnut]

It all becomes so complicated.

Remember Occams Razor.

Simplest solution is better.

While I admire techs who work systems, it seems for time/effort, versus profit/cost, versus sticking to systems with tweeks, it seems too mightily complicated.

Give me a breakout from a range on strength, an inverse head and shoulders recovery after a long bear descent, or an ascending triangle on a group of chosen stocks, then I am interested, if I have the dough.

There are too many variables not only in stocks and TA, and in life, for a systematic approach to work, for the average investor.

Unholy Grails is excellent. It is not the Holy Grail, as Nick explains in his book.

gg

 

[tech/a]

It all becomes so complicated.
Remember Occams Razor.

Simplest solution is better.

While I admire techs who work systems, it seems for time/effort, versus profit/cost, versus sticking to systems with tweeks, it seems too mightily complicated.
Give me a breakout from a range on strength, an inverse head and shoulders recovery after a long bear descent, or an ascending triangle on a group of chosen stocks, then I am interested, if I have the dough.

There are too many variables not only in stocks and TA, and in life, for a systematic approach to work, for the average investor.
Unholy Grails is excellent. It is not the Holy Grail, as Nick explains in his book.

Having turned $30,000 into $360,000 in 6 yrs with one of mine all traded live and still on Nick's site for those who want to use as an example, a few would disagree.
I remember getting a hamper delivered the size of a packing case one year from a guy who had used T/T for his super,compounding and re investing his profits.
His card informed me his return for the year was 64% on capital way above my tested averages.
His super was high 6 figures.

If you have serious funds to invest longterm then systems trading is a sound viable alternative to others.
Your method maybe another but I haven't seen YOUR stats on that!

LONE WOLF

I'm not here to alter beliefs.
If that's what you have found then you should trade In accordance with YOUR findings.

 

[Lone Wolf]

LONE WOLF

I'm not here to alter beliefs.
If that's what you have found then you should trade In accordance with YOUR findings.

Sigh. Every time I try to communicate with others I’m reminded of why I don’t do it often.

I don't mean to argue Tech. I just wanted to explain my thinking so that I can learn something from the discussion that follows. You feel further discussion is pointless and that’s fine. Thanks for trying anyway.

My apologies to Elfanger who’s thread I partially derailed. It’s not as hard as we made it sound. I suggest you get set up and try testing things for yourself. You’ll soon see for yourself what matters and what doesn’t.

 

[Trembling Hand]

Sigh. Every time I try to communicate with others I’m reminded of why I don’t do it often.

LOL. It could be worse. No one could respond. Then you know you're in trouble.

 

[tech/a]

Sigh. Every time I try to communicate with others I’m reminded of why I don’t do it often.

Sorry but felt/feel we are in circles.