IMO - there's nothing to beat. You only need to know when to buy, sell, hold or stand aside. There's no competition. The liquidity is there.
150K TST Combine
- Thread starter Sekiyo
- Start date
Thanks for enlightening my path.
I’ve placed my first trade 10 years ago,
And I already had this conversation with you.
I’ve never done real backtesting,
Even though I’ve learnt some programming.
I believe backtesting isn’t necessary for success,
Many legendary traders never went through it.
If I stick with my 5 principles,
I should do above average.
It’s common sense.
Timeless ones.
The devil is in the details,
But I’ll leave them to my sixth sense.
History is a great teacher. So is experience.
I don’t want to go into backtesting,
Maybe I’ll never succeed.
But thank you very much.
Wish you the best.
It’s not innate though,
So there is definitely something to regulate.
Maybe not a competition,
But still something to master.
Play by the rules, avoid pitfalls.
One need rules,
Recognize the situations,
And deviate as little as possible from the reality.
It’s like the Slansky’s poker theorem,
“Every time you play a hand differently from the way you would have played it if you could see all your opponents' cards, they gain; and every time you play your hand the same way you would have played it if you could see all their cards, they lose.”
If current state is down then sell,
If current state is up then buy,
Else do nothing.
Then there is the reward to risk optimization.
Cut loss short, let winner run. Pyramid.
You can fail by being wrong or too early.
You can fail by sabotaging yourself.
Situation or rules wise.
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I remember.
That's discouraging. If you can't master the past or master a dead market, I think it will be hard to master a live market with $$$ on the line.
Care to mention these legendary traders?
For example Livermore, while he may not have back-tested, he spent a lot of time logging and archiving data.
Marty Schwartz jacked away 10 years on trading and only became successful after he developed a methodology.
The odds of becoming a legendary trader are slim anyway.
They are vague at best.
Follow the trend? What trend? How exactly do you define it? When does it end? When does it begin?
You have trouble letting winners run. Well, that's because you lack a system and don't know what to expect from a move or other wise have a good exit signal.
I think that's a big mistake.
But likewise.
That's what a trend is for me.
Well it's in hindsight and not a trend but a reaction,
Most of the time a reaction is A-B-C-D in 3 pieces.
AB = CD if the market is kind enough.
Which is the case in the picture.
It's a succession of HH HL or LH LL
But yeah I can't tell it the algorithmic way.
We just had a "fakeout" (LL then HH).
On the 2nd wave up but shit happens.
The attitude should be towards research,
Legendary traders have done their due diligence.
Maybe Livermore would have used backtesting,
As it’s the quant’ technology of today.
But yeah I was thinking about:
- Livermore (How to trade in stocks)
- Darvas (how I made 2M in stocks)
- Soros (Alchemy of finance)
- Loeb (battle for investment survival)
- o'neill (how to make money in stocks)
I don't know much about Soros or Loeb, but Livermore, Darvas and O'Neill was all fairly methodical as far as I can remember.
And that's the key. There needs to be a methodology and some kind of consistency in your approach. IMO, at least. And how to best build a methodology? Well, live trading (simulator can be part of it), but a very good starting point is market history. Does trend lines work? Back-testing that over a few hundred charts is the best way to answer that question. One problem, though, live charts and dead charts are different, so it's not neceesarily easy.
Then you have newer traders of today like for example Nav Sarao which would simply sit and observe the order book from open to close. And that guy was truly gifted and I believe it was also said that even his edge was diminishing in his later days as a trader.
Anyway, I won't press the matter further. Just a friendly suggestion.
And that's the key. There needs to be a methodology and some kind of consistency in your approach. IMO, at least. And how to best build a methodology? Well, live trading (simulator can be part of it), but a very good starting point is market history. Does trend lines work? Back-testing that over a few hundred charts is the best way to answer that question. One problem, though, live charts and dead charts are different, so it's not neceesarily easy.
Then you have newer traders of today like for example Nav Sarao which would simply sit and observe the order book from open to close. And that guy was truly gifted and I believe it was also said that even his edge was diminishing in his later days as a trader.
Anyway, I won't press the matter further. Just a friendly suggestion.
I don’t actually buy trend lines.
I just check the overall trend on the 5 min chart,
Then I rather buy the trendline failure on the 1 min chart.
I have a system but I am a little bit all over the place as you said. I sometimes trade according to this, then that and else.
I should follow a system for sure.
It was just an example of back-testing to see if something have validity.
You will never become consistent if you're always mixing it up. Focus, focus, focus.
Trying different things is okay in the system development phase or later for optimizing something that's already working.
But you need to settle on 'something' and stay with that. IMO.
Yes.