Volatility break out strategies can work in FX, but you need a big bankroll to survive long drawdowns and diversify. You have to understand that you will likely be working a system that will give you 25-30% winners, which can be tough on you. Tough because of the long strings of losers and tough to hang on to the occasional winners. Miss one trade with a bad execution or outage and it can ruin your year.
BACKTESTING: only 25% winners on MA crossovers?
- Thread starter clambill
- Start date
Well, I noticed something I hadn't seen before. In the number of trades, I see a lot of trades were counted as neutral anyway. So, in reality, if you were scaling out to improve your results, I don't think the real figure is 25% winners.
The backtester in Dealbook 360 does not seem ideal. But, it does give you some results anyway.
The backtester in Dealbook 360 does not seem ideal. But, it does give you some results anyway.
You mean trying it in a demo Forex platform? I did a search and all I could find was the idea to test your ideas in real time. Yeah, I started doing that plus trying to do "mental exercises" like taking on a "scary" trade in the demo (with no real money) that I might have difficulty doing in real life in other words, trades where you would have a better entry point if you had the guts to take it.
Clambill
There is a dirth of trading information in ET these days. This is probably because fewr traders are able to deal with the markets.
Your exhibited thought processes leave something to be desired. Where you are to day was of interest at about the time elcetricity was invented. As you see, using electricity has made many advances and diversified.
A parallel occured in the financial industry as well. The main theme of the financial inductry still remains as fees, commissions and taking a piece of this or that. Electricity did advance the range of services for which money could be demanded in the industry. Today, in ET, there is a thread on price action which degenerated to a tape reading discussion, for example.
If you were living in the 20's, 30's or even the 50's, you could have spent some time developing the way in which market information became helpful.
Then the absolute, as well as, the relative was considered. Naturally, mature people used appropriate language to characterize the realizable potential of data processing using mathematics.
The discussion in price action (simple cut and paste of a vendor's leading sales tool) introduced refering to a static value (pivot point) as a way to judge subsequent price action. Definitiely a dummy level of discussion.
You and the other posters here are all in a bunch of the typical person who wants to make money doing something and yet it is not your lot to think in any way. Linda vendors to others who want what you want.
There was an era, however, when a great deal of thought went into using the connection among data and mathematics. A connection was seen among data, mathematics, and making money.
The words stochastics, convergence and divergence are descriptors that became assigned to the outputs of math systems. This introduced an major achievement for the financial industry.
Sales in the financial industry will always be dominated by "security", "growth" and "income"; they are sales tools that will work forever among the people who seek to be rich.
Combining data and mathematics has yielded "timing" in markets.
In this thread one output is mentioned: "crossover". It may be looked at as a "timing" oriented event and such an event may be considered a "signal".
Among the ET dummies, there was one who took a "crossover" and pronounced it a signal for taking action. Being a dummie he wanted to use a golden oldie in a new way to be a big man on campus. He took one of the lines generated in MACD and deemed it's "crossover" of the zero axis a "signal" to trade. He succeeeded in proving he was a dummy in three or more ways.
Most strong achiements in indicators that involve crossovers have made significant contributions to the timing of profit taking and, concurrently, they also introduced the concept of leading indicators of price,
For example, when price data is put into a good indicator and one that generates two lines representing functions, then there are four types of crossovers (excluding axis crossovers) that occur.
Today, potential traders miss this truth about such indicators.
Proceeding further, it become clear (in two ways) that there are more signals that come from such indicators than crossover types. The set of these, if fact, is much larger than the four element set of crossover signals). There is a major opportunity embedded in this knowledge.
What if we do the vendor thing that Linda does? That is assign context to signals.
For pairs of lines (take a MA and price movement to illustate a "pair") Or go to pairs trading as advocated by the Brights.
Just before doing this step of introduced sophistication, do take a moment to consider the failure to crossover as a signal and assign it a power, or significance, equal to the crossover. Dummies can't do this nor can they get through reading a simple introductory post such as this. Being mentally crippled can be disasterous for the consideration of joining the ranks of very successful traders. To be successful, a person has to make a strong effort of getting in gear mentally.
There are two classes of of signal contexts. These classes overlap. Elements of these classes have defined adjacencies.
All price patterns may be defined by the order of events of these contexts.
I'll leave you with a series of symbols on the context level where a symbol contains three signals.
long: A1>B1>A2>B1>A2>B2>A1(short): B1>A2>B1>A2>B2>A1 long: etc.......
The conclusion that may be drawn from using mathematical indicators where their signals form a set of finite contexts and the signal elements of contexts overlap, IS that trading price can be done without having to look at price.
Further, if combination of indicators (say three or four) are used, then the signals, contexts and overlap of each series forms an interlocking matrix that may be used as an ATS to trade liquid markets without reference to price movement in any way. a collateral windfall is that all price patterns may be defined as a finite set of patterns all fully defined.
This also applied on any trading fractal as well.
The definition of a trader in terms of skill comes down to an expression of the trader's capability to trade the cycles and subcycles with in each market.
A beginner only trades one in each cycle.
An intemediate has the ability to trade the market retraces and advances.
An expert trades all market contexts as each context begins and ends.
Not knowing that there are four kinds of crossovers in any pair display occurring in one complete movement of price (a price cycle) or the example of misunderstanding even the crossover concept as having to relate to the pair and NOT an axis puts the potential learning traders way below any possibility of making any forward progress. To make any progress in any kind of "study" where math is used (Arithmetic included) there is a minimum differentiation requirement eqivalent of: "You can't read a childs story (Like Run, Dick Run") if your mind cannot contain words, their definition, how the order of words works, and how letters sound to form words for speaking and listening purposes.
So far this thread has no posters who can even read a childs story in the equivalent of reading the market.
There is a dirth of trading information in ET these days. This is probably because fewr traders are able to deal with the markets.
Your exhibited thought processes leave something to be desired. Where you are to day was of interest at about the time elcetricity was invented. As you see, using electricity has made many advances and diversified.
A parallel occured in the financial industry as well. The main theme of the financial inductry still remains as fees, commissions and taking a piece of this or that. Electricity did advance the range of services for which money could be demanded in the industry. Today, in ET, there is a thread on price action which degenerated to a tape reading discussion, for example.
If you were living in the 20's, 30's or even the 50's, you could have spent some time developing the way in which market information became helpful.
Then the absolute, as well as, the relative was considered. Naturally, mature people used appropriate language to characterize the realizable potential of data processing using mathematics.
The discussion in price action (simple cut and paste of a vendor's leading sales tool) introduced refering to a static value (pivot point) as a way to judge subsequent price action. Definitiely a dummy level of discussion.
You and the other posters here are all in a bunch of the typical person who wants to make money doing something and yet it is not your lot to think in any way. Linda vendors to others who want what you want.
There was an era, however, when a great deal of thought went into using the connection among data and mathematics. A connection was seen among data, mathematics, and making money.
The words stochastics, convergence and divergence are descriptors that became assigned to the outputs of math systems. This introduced an major achievement for the financial industry.
Sales in the financial industry will always be dominated by "security", "growth" and "income"; they are sales tools that will work forever among the people who seek to be rich.
Combining data and mathematics has yielded "timing" in markets.
In this thread one output is mentioned: "crossover". It may be looked at as a "timing" oriented event and such an event may be considered a "signal".
Among the ET dummies, there was one who took a "crossover" and pronounced it a signal for taking action. Being a dummie he wanted to use a golden oldie in a new way to be a big man on campus. He took one of the lines generated in MACD and deemed it's "crossover" of the zero axis a "signal" to trade. He succeeeded in proving he was a dummy in three or more ways.
Most strong achiements in indicators that involve crossovers have made significant contributions to the timing of profit taking and, concurrently, they also introduced the concept of leading indicators of price,
For example, when price data is put into a good indicator and one that generates two lines representing functions, then there are four types of crossovers (excluding axis crossovers) that occur.
Today, potential traders miss this truth about such indicators.
Proceeding further, it become clear (in two ways) that there are more signals that come from such indicators than crossover types. The set of these, if fact, is much larger than the four element set of crossover signals). There is a major opportunity embedded in this knowledge.
What if we do the vendor thing that Linda does? That is assign context to signals.
For pairs of lines (take a MA and price movement to illustate a "pair") Or go to pairs trading as advocated by the Brights.
Just before doing this step of introduced sophistication, do take a moment to consider the failure to crossover as a signal and assign it a power, or significance, equal to the crossover. Dummies can't do this nor can they get through reading a simple introductory post such as this. Being mentally crippled can be disasterous for the consideration of joining the ranks of very successful traders. To be successful, a person has to make a strong effort of getting in gear mentally.
There are two classes of of signal contexts. These classes overlap. Elements of these classes have defined adjacencies.
All price patterns may be defined by the order of events of these contexts.
I'll leave you with a series of symbols on the context level where a symbol contains three signals.
long: A1>B1>A2>B1>A2>B2>A1(short): B1>A2>B1>A2>B2>A1 long: etc.......
The conclusion that may be drawn from using mathematical indicators where their signals form a set of finite contexts and the signal elements of contexts overlap, IS that trading price can be done without having to look at price.
Further, if combination of indicators (say three or four) are used, then the signals, contexts and overlap of each series forms an interlocking matrix that may be used as an ATS to trade liquid markets without reference to price movement in any way. a collateral windfall is that all price patterns may be defined as a finite set of patterns all fully defined.
This also applied on any trading fractal as well.
The definition of a trader in terms of skill comes down to an expression of the trader's capability to trade the cycles and subcycles with in each market.
A beginner only trades one in each cycle.
An intemediate has the ability to trade the market retraces and advances.
An expert trades all market contexts as each context begins and ends.
Not knowing that there are four kinds of crossovers in any pair display occurring in one complete movement of price (a price cycle) or the example of misunderstanding even the crossover concept as having to relate to the pair and NOT an axis puts the potential learning traders way below any possibility of making any forward progress. To make any progress in any kind of "study" where math is used (Arithmetic included) there is a minimum differentiation requirement eqivalent of: "You can't read a childs story (Like Run, Dick Run") if your mind cannot contain words, their definition, how the order of words works, and how letters sound to form words for speaking and listening purposes.
So far this thread has no posters who can even read a childs story in the equivalent of reading the market.
If you googled and found a series of inventions related to electrical power and power supplies, those were assigned to BTL via my father. Having common names could be confusing to the casual sarcastic observer.
The OP has explained his trading career plight elsewhere and he has been empathizing with another person who thinks he is thinking as well.
Well, excuse me for being an extreme idiot. My tiny little brain that can barely even process a thought has only been looking at technical analysis for a bit over a year. I continue to make various observations from looking at charts and doing "virtual" trading on a demo Forex platform. I noticed today that another way to filter is to use different time frames depending on whether the market is trending or in a trading range. I believe your disgust with math-based indicators might be the result of the angle at which you decide to view them.
Speaking of ET dummies... there's actually one named Jack Hershey who thinks stochastics is a leading indicator:
I see the Stoch 5, 2,3 fast line (blue for me) go up through 50%. It is a leading indicator of price and it tells me one thing only. Sentiment has shifted from Distribution to Accumulation.
http://www.elitetrader.com/vb/showthread.php?s=&postid=1302778&#post1302778
That same ET dummy (Jack Hershey) also tried to be the "big man on campus" at least twice with hindsight drills. Note that in December he still didn't understand the difference between hindsight and the "hard right edge" even though it was explained to him in October.
10-21-08 08:37 PM
http://www.elitetrader.com/vb/showthread.php?s=&postid=2136041&#post2136041
12-10-08 09:31 AM
http://www.elitetrader.com/vb/showthread.php?s=&postid=2214465&#post2214465
I see the Stoch 5, 2,3 fast line (blue for me) go up through 50%. It is a leading indicator of price and it tells me one thing only. Sentiment has shifted from Distribution to Accumulation.
http://www.elitetrader.com/vb/showthread.php?s=&postid=1302778&#post1302778
That same ET dummy (Jack Hershey) also tried to be the "big man on campus" at least twice with hindsight drills. Note that in December he still didn't understand the difference between hindsight and the "hard right edge" even though it was explained to him in October.
10-21-08 08:37 PM
http://www.elitetrader.com/vb/showthread.php?s=&postid=2136041&#post2136041
12-10-08 09:31 AM
http://www.elitetrader.com/vb/showthread.php?s=&postid=2214465&#post2214465