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Okay, wait........ If no stoploss or profit taking parameters are allowed, then how are we supposed to manage the money? Perhaps we need to define what "money management" is. I may have a misunderstanding:confused: Regards Oddi

I'm game:D Provide your system. This should be an interesting learning experience. Regards Oddi

Another limitation is testing for candle stick formations. TS for example require one to specify the parameters for a doji, also hammers. Visual pattern trading is also very difficult to backtest with confidence.

Sorry hypo, can't take credit. I actually found this out while trying to mechanize and optimize Jack Hershey's ES method. The system performs much better in real time than it does on the backtest because of the nature of the stochastics indicator and the way it behaves in real time vs...

You know what? You are an absolutely great supporting resource. I always appreciate the links you post, and they are always timely.:)

Monday, put up a stochastics oscillator. Use any time frame you like. Note the numerical position of the osscilator 1-2 sec. before the end of the bar, and then note it at the beginning of the next bar. There will be dramatic displacement. This will adversely affect a backtest. Connie...

Easily. Any system that requires entry on the immediate appearance of a signal, rather than at the end of a bar. Obviously, the longer the time frame, the worse the effect. All oversold/ overbought crossing of an oscillator will not be acted on in a backtest until the end of the bar. The...

What I am speaking of specifically is that there are systems that backtest poorly and do well in realtime. Any system can be made to work with money management, some work better in real time than with backtesting. There may be people out there throwing away good systems because of a marginal...

I have run one proven money maker, and several experimental tests side by side with a backtester. Signal in real time are often different than signals in the backtest. Once such system is a net loser in the backtester, while profitable in real time. The best backtester in the world can only...

Okay harry, you sucked me in. Does not money management = risk management?

Isn't this something like the probability law of very large numbers?

Good post.... It is clear to see nothing more than dogma on both side of this Christianity vs. Islam debate. Most here have not read even one of these books in it's entirety, not to mention both of them.

Drifting away from reality is when I bought some RMBS at 480 and sold it at 520, in one day. That stock had 30 point daily ranges back then.:eek: But you are right, fundi's do win out in the end. But TA can make an awful lot of money before that:D I don't care too much why it works, sad...

I have no experience here, but I would speculate that a system has imputs that a trader keeps in his head, and without those imputs, the system will fail. What I mean by imputs is that there will be times when and when not to use a system, and some systems are also market specific, or...

All traders need a framework in which to base trading decisions on. This is what TA is, and it is as mythical as the markets are. After all, what is a futures contract, really? It is an instument that is esentially a figment of our imagination, just as money is. It exists only because we...

It is a function in TS to evaluate the ability to capture maximum profit per trade. I have found it to be very handy.

Agreed, open minds are good:D

Hi toyland, yes I have seen these strange systems. I would not play a system that has a negative efficiency rating, nor a win loss ratio < 3, a system with small win/large loss will have both of those undesirables Regards Oddi

I certainly do, and the small win, large loss argument has been brought before. You did see that I reject systems with win loss ratio < 3 didn't you? I use mech systems for the very reason that human perception makes patterns pretty much useless, especially elliot and candlestick pattern that...

No disrespect, bali, but you would not be the first "analyst" to prematurely mark the death of AMZN.