Averaging down vs. scaling in may not differ, but they still have the affect of adding positions and increasing the trade drawdown. The net profit might increase, but so does the drawdown. (risk).
Many C2 vendors average down simply to make the entry and exits look better in the track record - this is a rampant problem. Obviously, scaling in/out has merit. But there is no easy way to separate these…
Posted by Dustin Dubia
>>>>> I’m also concerned by “Cheetah’s” comments recently about drawdown figures being incorrect. I’ve never looked at them, and don’t know if they are working properly or not.<<<<<<
I think the indicator has some validity but there is a MAJOR PROBLEM with it. I have looked over the trades for last couple weeks for my system and it is amazing how far off some of the DD’s can be. I have notified C2 for fixes and they were fixed. But as I stated in another post on an earlier thread, I haven’t checked DD’s in the past since they are usually updated 1-2 days after the trade AND they haven’t been used in any kind of statistical data.
Out of curiousity, I checked another system that trades the ER2, as I do. The system I checked is “Turbo TraderProfessional”. I checked the DD’s from 1/12 to 1/24. That is only 9 trades. This is what I found.
1/12 – DD posted is -$1,300. The actual DD should be -$1,100 according to my data.
1/16–DD is N/A. How can DD be N/A??? This happened on about 4 of the past 100 trades. The fact that DD shows as N/A is a red flag that something is not right with the C2 data.
1/16 #2 trade — DD posted is -$2,500. The actual DD per my data is -$300! This is a significant difference.
1/17 and 1/18 appear to be accurate.
1/18—Posted DD is -$1,200. The actual DD per my data is -$800.
1/19—Posted DD is -$1,300. The actual DD per my data is -$600.
As you can see, in 5 of the 9 trades, the DD posted is bad data. Is the problem with the ER2 data? Is it just the recent data? Why isn’t the data accurate? Where does the data come from that is utilized to calculate the DD?
The indicator, although valid in some respects, is WORTHLESS if the data is not accurate on every trade.
I think its funny but unprofessional to call the indicator “Hold & Hope”.
Why not give it a name that at least gives some idea of what it measures, like “Drawdown to Profit Ratio” or something like that?
Also shouldn’t newish systems have a value of “N/A” rather than 0.0 since 0.0 implies the system sucks (errr, I mean has high risk)?
Another interesting aspect of the Hold and Hope indicator is the FX market. Check out the system “USD/CAD Mover”. In the past 50 trades, there have been a couple DD’s of over $200,000!! I don’t think this is accurate data. The USD/CAD doesn’t move like that on positions that are that small. Also,some of the DD’s are negative and some are positive. What is a positive DD and how does that figure into the H&H indicator? Again, if the data is not good, the indicator is WORTHLESS. Garbage in, garbage out.
> if the data is not good, the indicator is WORTHLESS. Garbage in, garbage out.
True of ALL indicators, not just HH.
In thinking about scaling in vs. averaging down, this indicator punishes only those who average down.
If scaling in means "obtain fills for the intended #contracts in several entries (or exits) at different prices" then this indicator does not cause them to have a lower value.
The lower value comes to systems than average down, where a vendor keeps adding on to the ORIGINAL number of filled contracts, to try and and improve the entry or exit price [increased positions also increases trade drawdown].
"Also,some of the DD’s are negative and some are positive."
That could indeed be a problem, if the negative and positive drawdowns can cancel out against each other in the denominator of the statistic. If this is true, then I suggest to modify the index such that the denominator is the sum of only the “positive drawdowns” (i.e. the drawdowns that are really drawdowns).
> Systems get labeled and rated now based on arbitrary thresholds set by one person based on his own preferences.
> We are talking about an indicator made up by own person, introducing his own bias and preference on how a system should be rated.
From the department of redundancy department:
Funny though, it identified your best two systems, and it ranked them
correctly. Pretty good I’d say, I’d say pretty good. <G> ;-)))).
Hopefully, maybe this focus on Drawdowns will cause improvements to it. I suspect positive drawdowns were supposed to be negative, and maybe there should be error checking that inserts the negative sign when missing… Etc. etc.
> I am happy with this indicator, as it summarizes nicely what I can find in the trade details.
Yes. For example Six Sigma is “insulted” by the indicator, yet he held
a largish position PAST rollover, into last trading day, over 3 months
total. Clearly he was “holding and hoping” and it correlated with his
largest DD. There were also several “extreme” "Drawdwn & Risk"
trades. HH just flags this type of trading style. Nonetheless, Six Sigma
had an OK HH.
I see others doing stuff like holding 1 contract out of a 150 contract
trade to keep the original “position” open in C2. A clear manipulation
of the C2 system. The HH flags this practice.
Given the “extreme” ratio of system blowouts here at C2 indicators like HH are a service to subscribers. If a few vendors are “insulted”, while subscribers are saved the very real pain of a system meltdown, HH is a good thing. Moreover, I wouldn’t stop there: more risk reward stats are better than fewer. In the long run C2 will be more credible and vendors might be more mindful of risk.
> But I agree that the name and description may need some work.
OK, lets change the name and description to something less editorial.
Just the facts. We want to be PC and not insult the sensitive among us.
I would definitely expect unhappy comments from systems that exhibit the flagged behavior. That shows that the indicator (and the system) is working.
Yes there are drawdown and data and other problems. We have all whined about imprefections of the Realism, the Ranking and other things. Which systems makes the “Best” or “grandma’s” or other lists often seems questionable. But no one is forced to use them.
I fail to see why anyone is unhappy with comparing the effect of net profits and net drawdowns. I have found this the most useful tool in my quiver. I was tired of hand calculating and updating it periodically. And I wanted others to be able to use this, to try and weed out the trick systems.
If a system has a low rating, then stop averaging down or Holding and Hoping. if you do not cut your losses and let your profits run, then learn how. If you have high average trade drawdowns, then learn how to manage your trades better. If it is something else, then there are other indicators that will allow people to judge you.
For example, tt seems surprising that the USD/CAD system allowed a $255,000 drawdown to stay on his track record if it doesn’t belong. If offering a live system and seeking subscribers, you need to be aware of your system page. If you have drawdown or data errors, write to MK for corrections and offer suggestions for improvement. One of the reasons it takes total net profit and total max DDs, is to overcome imperfect max DDs. One would expect that some are greater and some are lesser than the actual…
But, it works. Things like equity curve, win% and other stuff is easy to manipulate. Hold&Hope is not.
You continue to justify your efforts without any recognition that individuals have taken the time to point out to you where the indicator fails, and why it should not be universally applied to all systems without an immediate revision of the explanation and a change of the name.
The assumption you had in creating the ‘indicator’ is that a system is trading one instrument at a time, and that the indicator would flag those trades that are poorly executed. But as has already been pointed out to you, the indicator is useless and misleading with those systems (and there are many) that simultaneosly and purposefully trade multiple positions for the purpose of diversification and risk avoidance.
The “Hope and Hold” indicator is created with your personal biases, as clearly revealed in your posts on this very thread, and it has no place alongside other universally accepted and objective indicators.
Collective2 has, until now, provided a very valuable service that exists nowhere else. It presents objective, uncluttered system performance measures that are untainted by personal bias and opinion. It is the one place on the internet where the “rubber hits the road”, and trading performance with objective and universal measures is clearly outlined.
If you have opinions about what constitutes a good trading methodology, then I suggest that you put a lot more time into improving your own poor system performance, rather than spending time telling others how, what, and when they should trade, or how they should structure their systems to adhere to your personal biases.
Ross,
The $250,000 DD would should appear obvious to the vendor, but the point is----The DD’s can be incorrect, so why use incorrect data to calc the HH. Check out the “Turbo TraderProfessional” DD’s that I noted above. Look at the charts that go with the trades. A couple of the DD’s are ridiculous. 5 out of 9 were incorrect. Why didn’t the vendor report this? I don’t know, but like I have said before, the DD’s are posted 1-2 days after the trade is closed and the trade is probably forgotten.
The real point is this–Have C2 get the data correct and then it is useable. C2 needs to take responsibility for this for the indicator to be accurate.
> I cannot disagree more. If something new is introduced, the onus is on the person introducing it to show why this adds value and why specific thresholds are right.
I agree it is a small sample, but look at your own systems:
CTS SnapBack System: Hold & Hope 1.23
CTS Crash Control: Hold & Hope 0.69
CTS Synergy System I Hold & Hope 0.12
The HH did a pretty nice job IMHO. Moreover, you should
be happy. It ranks your two good systems very good to
excellent. Your other systems are a tough sell with or without
HH.
Sorry, I believe in the numbers, and creed that all those that watch a system try the numbers, before the beautiful words
The problem is, that little of what you said has much truth. it is 5 paragraphs of opinion.
You continue to justify your efforts without any recognition that individuals have taken the time to point out to you where the indicator fails, and why it should not be universally applied to all systems without an immediate revision of the explanation and a change of the name. Many indicators have areas of failure and limitations. This has already been addressed by others above. H&H does not need to be a shining light. It is an indicator
The assumption you had in creating the ‘indicator’ is that a system is trading one instrument at a time, and that the indicator would flag those trades that are poorly executed. But as has already been pointed out to you, the indicator is useless and misleading with those systems (and there are many) that simultaneosly and purposefully trade multiple positions for the purpose of diversification and risk avoidance. There are no assumptions. it sums total max DDs and total net profit and compares them. I do not agree with your statement
The “Hope and Hold” indicator is created with your personal biases, as clearly revealed in your posts on this very thread, and it has no place alongside other universally accepted and objective indicators. there are no personal biases. MK asked for what I use it for, and I told him what I have found after much use . I forced this on no one. It has a very good place here; many of the indicators are of little use or comprehensibility to new people. You do not justify your repsonse, it is just your opinion. Stop complaining and offer improvement, if you really want to help.
Collective2 has, until now, provided a very valuable service that exists nowhere else. It presents objective, uncluttered system performance measures that are untainted by personal bias and opinion. It is the one place on the internet where the “rubber hits the road”, and trading performance with objective and universal measures is clearly outlined. absolutely
If you have opinions about what constitutes a good trading methodology, then I suggest that you put a lot more time into improving your own poor system performance, rather than spending time telling others how, what, and when they should trade, or how they should structure their systems to adhere to your personal biases. my “system” is offered to no one, if you took the time to read the description, and it has nothing to do with this indicator. Your paragraph is nothing but hype. There is no personal bias. You offer zero evidence, and lots of opinion, which to me, has little value
>>Many indicators have areas of failure and limitations. This has already been addressed by others above. H&H does not need to be a shining light. It is an indicator<<
Thus, your rationale is that although your indicator has admitted problems, there is no reason for adjustment because many indicators have areas of failure and limitations? You must be kidding. Right?
>>There are no personal biases<<
Your personal biases are evident in reading your posts, and have naturally transferred to your indicator. To site just one: The point of trading is to cut losses short and let winners run."
This may be the basis for YOUR trading, and hence your results. However, it is not universally true.
I go on. You say "The worse the drawdown, the higher the risk. This is one of the basics of trading. However, your indicator does NOT measure system drawdown. It measures drawdown per trade. They are not the same thing, and not appropriate for all systems, which has been pointed out to you repeatedly.
>>Many of the indicators are of little use to comprehensibility to new people.<<
If you feel that trader ignorance is such a problem, why not create a glossary explaining the existing indicators and how they can help to judge system performance, instead of trying to create new measures that are proving to be confusing and controversial.
You have also asked for specifics where the indicator fails. This is work that should have been done before the indicator was posted on C2.
Here are just a few of many systems that use a methodology of having multiple positions open at once, which is where your indicator fails, rating many as high risk. When in fact, they are low risk.
Also note that a number of these systems appear on GRADMA C2 CONSERVATIVE SYSTEMS, which are defined as low risk that Grandma Likes.
System with H&H Rating
Big Cat - .09
Extreme - .35
Intraday Currency - .09
1 Day - .09
RT Forex North - .30
Tango - .24
Seleukos Intrada Currency System - .09
Enough said. If you dont get the point by now, you wont get it, and you will continue to criticize those who are attempting to improve your work and make it useful to everyone.
>Enough said. If you dont get the point by now, you wont get it, and you will continue to criticize those who are attempting to improve your work and make it useful to everyone.
FWIW, I only see posts by vendors who are critical of the HH. OTOH, only
non-vendor in the thread is Jules, but he likes it.
I suspect subscribers like more risk / reward stuff. Any non-vendors like to
weigh in?
The funny thing is indicators like these have a nice additional property. They nicely reveal knowledge and attitude of vendors. As soon as the track record of “Bounce” is a bit longer I might actually consider a subscription. Even if Ross would get his own indicator > 1 and allow subscriptions, I think I still wouldn’t subscribe.
Thus, vendors, please keep suggesting and debating your own indicators, as it is very helpful to me!
"Your personal biases are evident in reading your posts, and have naturally transferred to your indicator. To site just one: The point of trading is to cut losses short and let winners run." This may be the basis for YOUR trading, and hence your results. However, it is not universally true. "
Yes, silly me. Imagine such a foolish thing as "cut losses short and let winners run" Where did I ever get such a foolish idea?
