As for the discretionary vs programmed debate, I think the argument that the system will eventually blow up is completely the opposite, most programmed systems will eventually hit market conditions for which it is not optimised, and will fail, whereas a human trader can adapt.
There is also the ease of trading argument. For example, I’ve been following AT’s trades recently, and apart from a couple of the ER2 trades which I felt slightly uneasy with, I have been completely convinced by their correctness, though I’m not trading them at the moment.
In contrast, I’m also trading Gold Survivor 10k, and whilst I’m prostrating myself to the longer-term statistical outcome, the recent ER2 trades have struck me as utterly suicidal, and since it is currently experiencing a drawdown period, makes me question how long it will be, if at all, before the markets turn favorable again.
"Your peeking …quite blatantly, since you will never know without buying my system when you’re supposed to buy"
I don’t think you understood my post. How powerful your system is in determing “when you’re supposed to buy” was the objective of the second part of my analysis. I showed that the simple strategy of buying when there’s a 1.5 percent down day, and selling when there’s a 1.5 percent up day picks much better days to trade than your strategy does.
To go a little further, there’s been 300 trading days since you posted your strategy on C2. Your strategy chose to initiate a trade on 44 of those days. Your first-day performance on the QQQQs was 22 winning first-trade days, 22 losing first-trade days, and an average profit per first-day trade of 0.148 percent. If I trade ALL 300 days in a counter-trend fashion (if yesterday was down, I go long today. if yesterday was up, I go short today) I would have achieved 150 winning first-trade days, 150 losing first-trade days, and an average profit per first-trade day of 0.134 percent. Your strategy just doesn’t do a better than average job of picking the days to trade.
"There is more lines of code on this strategy than anyone can figure. You look at systems on WL, and people pride themselves on small systems, like 17 or 33 lines.
Mine are several hundred, and I’ve found this strategy much further back than any of the systems coming out today. It is what I consider the best system in this country."
The best system in the country would use few lines of code.
Simplicity is true genius.
Frank I tend to agree with you. Keeping it simple is how I have learned to make the most money trading. I find the more parameters placed on a signal the more likely it is curve fit. When you keep it simple you seem to be able to accommodate a larger variety of market conditions.
Rick Haines
You know Beau, I bet René thinks he created a monster!
Beau, if you are really as smart as you think you are, lets see you find your own methodology and create a good system on your own.
"I find the more parameters placed on a signal the more likely it is curve fit."
Wise words. For me it also shows how people put too much emphasis on an entry signal when exits are what determines whether you make money or not, and position sizing how much. Entry merely dictates how often.
Im baffled. Don’t you think that’s what I’ve already done?
As regards Beau’s system to give credit where it’s due it recovered very nicely from it’s first reasonable drawdown when the knives were out over the New Year, the biggest challenge now would appear to be maintaining consistency and discipline which will be more down to him than the system, statistically I still rank it as one of the best on here.
