A message to some day traders.

Nice edit? Here is the answer to your backtesting question that you deleted, imbecile.

Problems with backtesting Excerpt from Fooled by Randomness. The hidden role of chance in life and in the markets.' by Nassim Nicholas Taleb. Page 134-136

A backtester is a software program connected to a database of historical prices, which allows me to check the hypothetical past performance of any trading rule of average complexity. I can just apply a mechanical trading rule, like buy NASDAQ stocks if they close more than 1.83% above their average of the previous week, and immediately get an idea of its past performance. The screen will flash my hypothetical track record associated with the trading rule. If I do not like the results, I can change the percentage to, say 1.2%. I can also make the rule more complex, I will keep trying until I find something that works well.

What am I doing? The exact same task of looking for the survivor within the set of rules that can possibly work. I am fitting the rule on the data. This activity is called data snooping. The more I try, the more I am likely, by mere luck, to find a rule that worked on the past data. A random series will always present some detectable pattern. I am convinced that there exist a tradable security in the Western world that would be 100% correlated with the changes in the temperature in Ulan Bator, Mongolia.

An outstanding paper by Sullivan, Timmerman and white goes further and considers that the rules that may be in use successfully today may be the result of survivorship bias.

Suppose that over time, investors have experimented with technical trading rules drawn from a very wide universe in principle thousands of parameters of variety of types of rules. As time progresses, the rules that happen to perform well historically received more attention and are considered serious contenders by the investment community, while unsuccessful trading rules are more likely to be forgotten. If enough trading rules are considered over time, some rules are bound by pure luck, even in a very large sample, to produce superior performance even if they do not genuinely possess predictive power over asset returns.

I have to decry some excess in backtesting that I have closely witnessed in my private career. There is an excellent product designed just for that, called Omega TradeStation, that is currently on the market, in use by tens of thousands of traders. It even offers its own computer language. Beset with insomnia, the computerized day traders become night testers plowing the data for some of its properties. By dint of adjusting the rules the trader will hit upon hypothetical gold somewhere. Many of them will blindly believe in it.
Amahrix,

So what is your proposed solution?
 
Amahrix,

So what is your proposed solution?

Kindly, f*** off. Editing and calling me a stupid, now asking me for a solution. Im sensitive!!

Btw, did your backtesting help backtesters here? I can pull innumerable examples per your request.

vix-chart.png
 
Kindly, f*ck off. Editing and calling me a stupid, now asking me for a solution. Im sensitive!

Btw, did your backtesting help backtesters here?

vix-chart.png
You talking about problems, but you not talking about solutions. This is why I say your post is nonsense.

If you going to talk about the problems be logically and smart enough to talk about the solutions as well.
 
You talking about problems, but you not talking about solutions. This is why I say your post is nonsense.

If you going to talk about the problems be logically and smart enough to talk about the solutions as well.

Typical fallacious assumption.

Just because I propose a problem, doesn't mean I need to give you the solution.

I am highlighting what is failing, to have people drop what is failing. Are the people going to resist drop what is failing until they have something new to grab on to? This is stupidity. This thread highlights the issues, smart people will realize theyre committing a mistake, and theyll stop what theyre doing whether they have a solution or not. They realize it's not working. That's all my mission is right now.

""solutions"" for another thread, if I feel like it.
 
Typical fallacious assumption.

Just because I propose a problem, doesn't mean I need to give you the solution.

I am highlighting what is failing, to have people drop what is failing. Are the people going to resist drop what is failing until they have something new to grab on to? This is stupidity. This thread highlights the issues, smart people will realize theyre committing a mistake, and theyll stop what theyre doing whether they have a solution or not. They realize it's not working. That's all my mission is right now.

""solutions"" for another thread, if I feel like it.
Does the book Fool by Randomness offer solutions?
 
Does the book Fool by Randomness offer solutions?
My EliteTrader comrade, I believe you’ll benefit a lot(and I cannot stress this enough) if you pick up Nassim Taleb’s Incerto (Fooled by Randomness, Black swan, antifragile, skin in the game).

Also, try to understand this article


And also try to understand Ergodicity by Ole Peters, Ergodicity is also mentioned in that article above. It’ll take a while to wrap your head around these things as it did to me.

I’ll expand later on some insightful information for you if you’d like and if I can keep my word on that.
 
My EliteTrader comrade, I believe you’ll benefit a lot(and I cannot stress this enough) if you pick up Nassim Taleb’s Incerto (Fooled by Randomness, Black swan, antifragile, skin in the game).

Also, try to understand this article


And also try to understand Ergodicity by Ole Peters, Ergodicity is also mentioned in that article above. It’ll take a while to wrap your head around these things as it did to me.

I’ll expand later on some insightful information for you if you’d like and if I can keep my word on that.
Thank you Amahrix and I appreciate your recommendation.
 
Amahrix,
On page 15 of this thread, I really wish you would comment beyond "Let's keep it simple,"
I am asking for personal reasons, I'm working on a book that adheres religiously to most of what you say, so much so that out of intellectual honesty I feel compelled to talk about various instances where I have seen the market not act randomly (a word that really needs clear definition). One of which, but an undeniable example, is the multiple times I've created support and resistance by my own presence. Sometimes for hours, sometimes for days, or even weeks. Visible resistance that anyone can see on a chart and which is certainly not being formed randomly.

Where does this non-hypothetical fall?

Yes, I know this puts your back against a wall, and few people have the capacity to bend. Nonetheless I would love to see if you have any acceptance to this, as you are the ultimate resistance to this argument, and ultimately as everything else falls reasonably well within the standards accepted by academia (I despise academia), I am not sure whether I shut my mouth and leave it out, but it feels terribly dishonest to do so.
 
Are you saying that the cognitive dissonance is so pervasive in their mind, that they resort to telling the OP that they can’t do it which allows them to hold the wishful thinking driven belief that it is possible?
No. I'm not "putting words in your mouth".

You've spoken them, well written them, yourself.

You can't do it and without any basis claim others can't as well so they should give up hope.

My first post here included a screenshot showing (using TA) the high and low being nailed on that particular day by projections calculated and plotted in advance.
 
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