System Invention

[beerwm]

Ok,

So i was wondering, how is it that you came to be trading the system you are trading,

-Trial and Error
=did you experiment with different indicators/ different markets/ different timeframes

-Reverse Engineer it.
=did you find price movements and try to develop a system around it,

-Another path?

Edit;ALSO LIKE TO EXPAND ON THE TOPIC;

=I can only really think of one sort of system
---Trend Following
-Past price movement [affects] Future Price movement

So is that the goal?

--> find the correlation in /Past price movement/--> with /Future Price Movement/

'just thinking out loud'

 

[Stormin_Norman]

understood what the indicators were measuring then tried to think which ones together would tell a good story.

then visually investigate that. if that looks promising attempt to code it and run it historically.

 

[beerwm]

understood what the indicators were measuring then tried to think which ones together would tell a good story.

then visually investigate that. if that looks promising attempt to code it and run it historically.

Hi Stormin,

thanks for the response,
what were you trying to find

A setup which produced a 'predictable' future price movement,
or
A setup with told you something about the current price.

maybe im overthinking this all

 

[Stormin_Norman]

the current price.

only astrologers and fortune tellers can predict the future.

 

[peter2]

You are looking for a pattern that repeats often enough so that you can construct a trading plan that when managed well over many occasions will result in a profit.

Everyone will see different patterns while some, the FA people, will not even open their eyes to look.

 

[beerwm]

You are looking for a pattern that repeats often enough so that you can construct a trading plan that when managed well over many occasions will result in a profit.

Everyone will see different patterns while some, the FA people, will not even open their eyes to look.

Hi peter,

i was looking abit deeper into it,

- how is the pattern discovered - were you looking for something/ trial error?
- if you were looking for 'something' why is that 'something' important.

is it the pattern that - gives a higher Prob of profit.
or what the pattern says.

im confusing myself

 

[Stormin_Norman]

dont over complicate it.

 

[Cartman]

You are looking for a pattern that repeats often enough so that you can construct a trading plan that when managed well over many occasions will result in a profit.

i was looking abit deeper into it,

dont over complicate it.

g'day Beer ( u must be popular cause i hear people mention yr name a lot !!

what Stormer said is exactly right,

but if u r trying to work out how to find these 'illusive' patterns open up yr charts and zoom in a bit --- nothing like an overview to give u a 'closeup'

2 charts ---- same instrument -- 12 month time frame (daily chart) vs about a half hour (a few minutes ago --- 1 second chart ) -----

Pete put it in a nutshell above

 

[peter2]

Beerwm: I think you are focusing on the wrong thing. The pattern, no matter what it is doesn't make the money.
Our brain constructs patterns in everything we see. Ths i a vry smpl expl. You were able to read that rubbish because your brain constructed a meaningful pattern out of the letters.

How did you discover that pattern? You learned how to read so your brain constructed words from the letters and with the context of this discussion you made sense of it. If the context was different then you may have deciphered a completely different meaning. If we were talking about gunpowder, you might have read those letters as, "this is a very simple explosion".

Your brain and your education of TA makes your brain see the classic patterns in price charts. If you had not read about the H+S pattern then you would never see one (or understood what those initials were). When trying to "find" patterns we often overlook the simple observation that price is going up or down.

In trading you have a bias for trading with the trend or against the trend.The importance of patterns for me is that they provide an opportunity to trade in the manner that I prefer. I can construct a profitable trading strategy using those patterns that I see.

Patterns provide me an opportunity to start a trade. My trade mgt ensures that I will profit after many trades.

 

[James Austin]

understood what the indicators were measuring then tried to think which ones together would tell a good story.

then visually investigate that. if that looks promising attempt to code it and run it historically.

You are looking for a pattern that repeats often enough so that you can construct a trading plan that when managed well over many occasions will result in a profit.

Everyone will see different patterns while some, the FA people, will not even open their eyes to look.

beerwm,

some good points above.

allow me to share a personal experience.

i stumbled across 2 tools that i'd seen others using with success,
namely fib numbers and median lines.

i decided to test what happens when both the fibs and MLs align, as shown below.

if when the 2 tools align, my "expectation" is met repeatedly and profitably, whilst employing good loss management, then i may have found a way to extract more money from my chosen market than i lose.

the process has been, and can be, this simple.