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I didn't know you can develop your own custom indicators in IB platform. Do you need the API for that? Ron

The media has a huge short position:) Ron

Your average profit per profitable trade is your odds of winning. It also greatly matters what the size of your edge is. The edge is the expectancy of your method or system. Better read the first article on this page: http://www.tradingpatterns.com/About_Us/articles/articles.html "Relation...

It is clear that big investment houses manipulate the market trying to recoup their losses at the expense of retail traders and small funds. They pushed the market up for two days and sucked everyone in and came out today announcing bigger subprime losses. Why today and not three days ago? It...

True, you can "buy the lottery" if you wish for a 100% chance of winning. If I recall you will need to buy: N = n!/(n-k)! lottery tickets Ron

This reminds me of Orthodox Quantum Mechanics Interpretation in the micro scale combined with statistical mechanics in the macro scale. Very possible. Well said Ian. The media people know this well. It's time some traders realize it too. IMO the subprime crisis was an example of a...

NOT if the number changes after your first guess , which is what happens in a lottery. Ron

If you are asking a scientific question then you must omit the word "truly". Otherwise, you are asking a philosophical questions. Nobody in science knows what "truly" means. Are markets random? Many studies have shown that markets have periods with far from random behavior. Ron

http://www.bloomberg.com/apps/news?pid=20601087&sid=ayq29JCsf65c&refer=home Curious to see whether he will be correct one more time. Most of the other fortune tellers have failed the second time around in a big way. Happy New Trading Year to all of you! Ron

I think you are using a SMA 14 day ATR. It is better to use an EMA 14 day ATR and the values for GOOG and GE are 17.42 and .84, not that much different anyway. There is an issue with your approach IMO. Your stop is not determined based on some specific strategy but it is essentially a...

Not good. Assuming you can maintain the success rate and average win is 1.25 times the average loss, your profit factor will be in the range 1.35 to 1.46. Something goes wrong and you end up in the red. If you don't have a profit factor of 2 or greater you are working for your broker...

What does "fully backtested" mean? Did you account for the simple fact that when you actually trade a system the trades are real whereas when backtesting a system the trades are fake? The only way to see if reality makes a difference is to trade the system. Ron

Not right. What is more important is the calculation of the actual values after you employ your method in actual trading, whether it is mechanical or discretionary. Ron

Read the article "Relation of Expected Gain to Kelly Formula" by Michael Harris: http://www.tradingpatterns.com/About_Us/articles/articles.html I recommend a fixed risk percent method. Expectancy is very hard to determine accurately. I use a fixed 2% risk per trade to determine position...

Isn't the conversion back to base currency going to cost you if the quoted currency has fallen in the meantime? I think with IB you end up paying credit card exchange rates on your profits on foreign currency. This may be the reason they can offer such low spreads in some pairs and still make...

I have done extensive testing using a multitude of systems during the last two years, as well as, real trading and I have found out something you better know before you drop your money in the bucket. Unless the spread is 1 pip or less, you won't make any money in FX daytrading EUR/USD. The...

Being an ECN does not automatically preclude trading for own account, as far as I know. As a matter of fact, IB in their customer agreement state that they may take opposite positions than their customer's. That does not mean that much though. Some broker may trade against a customer and...

I suggest the following paper by Michael Harris: http://www.tradingpatterns.com/About_Us/articles/synthesis.pdf He explains in the paper how backtesting is used to develop and analyze trading systems and he includes a flow chart along with some simple examples. Ron

Absolutely, otherwise all traders would be very rich. This is a link to an article by Michael Harris in Fidelity archives that I think is a good read on this subject: http://personal.fidelity.com/myfidelity/atn/archives/august2003.html He first explains why it is so difficult to...

I agree. I will try the demo for a few days before I subscribe. I may came up with a way of increasing the accuracy or using their results to construct my own indicators. Probably contrarian:) Ron