Hi Nick
1. You must know that doing so produces zero edge less expenses and spread. Your expected profit from flipping coins like this is zero...and then you pay for the privilege.
2. All these rules don't convert lack of prediction into sustainably positive outcomes. Setting stops and profit points does not make money. Insight does. All this stop and limit stuff does is change the distribution of the way you get random returns. Do you get lots of small losses and a few big wins? Or do you get 50/50 and wins/losses roughly equally distributed? In the end, without an edge, they end up at the same point....zero less expenses.
If Nick Radge made money sustainably, he did so because he had an insight. All the rest is just risk management and 'bending the distribution'. Alternatives to this include:
- He was bloody lucky. A NASA Monkey who can write books...I have a couple myself.
- He made money by market making, but writes books and trains people on technical trading because that sells books and gets people along to his training company;
- He's just making it up.
His book keeps getting mentioned as some sort of bible in this place. I guess I better read it and see if he has any mojo. I have worked with a ton of very successful investors...only one of the massive bunch used anything like the stuff talked about in this place. He was a fixed income guy and he used Bollinger Bands. I have never seen anyone including our dealers use support/resistance, flags, candle sticks,... although some stops are used in an aggregate portfolio sense. I'd never heard of anything like a 20% Flipper or Grail for example.
3. Getting rich quick is better than getting there slowly. The point, though, is to get rich at all.
"I've been rich and I've been poor. Rich is better" - Sophie Tucker.
4. FOREX is generally regarded as the toughest market to make money in. Even though there are hedgers and central banks in there who are not profit motivated, it's not as if they intend to lose money either and their presence does not actually make it easier to garner profit. But their accessibility via the CFD guys and futures brokers and small spreads make them attractive for retail speculators. Retail participation in the market has risen and is around 3% of the market now.
Cheers
Hi Minwa,
Do you use Amibroker? Do you do backtesting? Do you have any system which you can backtest and it gives positive results when you run it for, let's say 10 years in various markets, without changing any parameters (US, AU).
It is true that I'm a beginner and have little experience, but until I've heard of him, I didn't know about any Technical Analysis systems that return in backtesting a good 10...25% per annum.
It's true that I have not used the system, not even to pick stocks for the ASX game - the system finds stocks quite rarely and its profits are generated in a matter of months sometimes - so I find the system improper for the game, which lasts three months.
I don't know if anybody checked the system in real world and if it works, but so far, this is the system I have the highest confidence in. I understand it is similar with the system used by the turtle traders, but much simpler. It has a strict strategy and it performs reasonably well without changing any parameters when going in different markets. Here is a screenshot of performance in for ASX (stocks from the game). I slightly modified the formulas, but I rather added some extra restrictive conditions (minimum liquidity and minimum volume).
The screenshot is a backtest between 01/01/2000 to 01/05/2010. If I run it until 01/05/2014, it indicates a total equity of $640500.
View attachment 57974
Cheers,
Nick
Yes that is the reality of these backtests, especially so far back in time when survivorship bias really kicks in. I backtest and forward test for two years or less from present time for some semblance of a possible real outcome. The result data doesn't have the big returns and mountainous equity charts but we want to compile systems that are at least a guide to possible positive outcomes and I believe the closer to present time test reduces the falsity of survivorship. No dream weaving necessary.Back tests ignores the trader psychology fact, would you have kept trading after 2000-2003, a period of THREE years where you made some equity gains then lost it back and it just chopped around breakeven.
You can see why I don't like theoretical back test. I don't use Amibroker or code systems as I don't use indicators and my psychology cannot be coded into a back test, I know I personally cannot stand trade such a system where draw down (to me sideways equity is also draw down) periods are that long.
Hey Nick thanks for posting that.
That system is not really robust, you can clearly it just follows the general share market. Overlay the equity with SPX or XJO and you can see the correlation. 2000 to about 2003 it was pretty much breakeven while shares were in bear market. Then it just followed shares great bull market until 2008 bear market where the equity just falls with the bear market.
Back tests ignores the trader psychology fact, would you have kept trading after 2000-2003, a period of THREE years where you made some equity gains then lost it back and it just chopped around breakeven. I believe you will need real faith to keep trading such a system for 3 years not making anything before it can realize its potential in the bull market. Drawdown of 31% is pretty high too, you will also need real faith to trade through that. Easy for back test as in hindsight you can see it recovered with the bull market. What if the bull market didn't come in stocks ? Would you have the patience to trade through the drawdown for a few more years ?
You can see why I don't like theoretical back test. I don't use Amibroker or code systems as I don't use indicators and my psychology cannot be coded into a back test, I know I personally cannot stand trade such a system where draw down (to me sideways equity is also draw down) periods are that long.
I posted my real accounts trading results for this year and last year in other threads you can look that up. To me real results and theoretical back test are very different things. I'm sure any vendor still trades or at least traded any systems they sell with real money, if they cannot share their results then that shoots up red flags and will definitely not be getting my money. If they don't back the system by putting their own money to the system to trade it themselves, I will not trade it even if they gave me the system for free.
4. FOREX is generally regarded as the toughest market to make money in. Even though there are hedgers and central banks in there who are not profit motivated, it's not as if they intend to lose money either and their presence does not actually make it easier to garner profit. But their accessibility via the CFD guys and futures brokers and small spreads make them attractive for retail speculators. Retail participation in the market has risen and is around 3% of the market now.
Cheers
CHF = Swiss Franc
How about we discuss the 20% Flipper?... happy to post some equity curves or stats from this. Its been quite successful since released, it is a long only trend following system. Seems pretty robust to me.
What will cause it to be profitable in the future?
I have a report from Nick on the US Power Setups, done on Stator showing closed trade results. I'm not going to post it as i don't have permission. But anyone can ask Nick for trade reports. The last time i was on collective2 the Flipper and the stats were there.
The subscription to the US power setups costs me like 20 bucks a months, i get FX futures and equities. There are no secrets in the stuff, its not a holy grail and the returns are just solid profits OVER TIME. Sounds like you've been burned Minwa? Did you get into a draw-down or something? I can understand that you'd be upset, so was my wife when another managed account we have went into drawdown, it happens....
What does my trading have to do with Radge ? You're sounding like Alvin in the Kertcher thread. Sounds like someone cannot face facts I have posted and started personal insults ?
More than happy to trade live with you, you can trade Radge's system I will post my trades. I can back my system with $300k.
What does my trading have to do with Radge ?
More than happy to trade live with you
The logic behind it is very robust and its not curve fit. Its pretty simple, for an equity to become a multibagger it must first increase 20% in value. If it has done this after a 20% decline in value it must be a strong stock. Throw in an index filter and some exit logic and it becomes a very robust trend following system for End of Day trading. Most of Nick's systems are based on very simple logic that stands the test of time. Its tests well over all the data i have (20 years+) and its also walked forward very well for the last two years. Nothing wrong with that.
Now lets think of what might cause it to be less than ideal or unprofitable?
-no trend (think ASX recently)
-no growth in small caps
-range bound for years
1. Why is his audited results not publicly available ? You mention you saw it on collective2 and have it personally but why can I not easily find it ? So if anyone wants his results they have to go through you to get it ? If you're going to sell something at least back it up with results.
Nick is well respected in the Australian Trading community, including the AATA, you can hardly compare him to this other guy...2. Closing his hedge fund down due to "regulatory increases" is exactly something Kertcher would use for his fund. Did he hide his collective2 results due to "regulatory concerns" ??
3. He markets heavily through internet marketing campaigns based on emotional selling, Google Adwords.
So instead of responding to all that you ask if I am in a draw down, as if that has something to do with this ? You also said something about Radge's lawyers chasing people. Right...
... for an equity to become a multibagger it must first increase 20% in value. If it has done this after a 20% decline in value it must be a strong stock. Throw in an index filter and some exit logic and it becomes a very robust trend following system for End of Day trading.
His systems only seem to work in a raging bull market (admittedly you can say that about many systems).
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