Can a consistently losing strategy be profitable if I do the opposite of it?

[wrbtrader]

Logically if I took the opposite trade of a consistently losing strategy I would have a consistently profitable strategy, or am I missing something that I haven't accounted for? If my question is true, has anyone tried this before and was your opposite strategy successful?

Its simple...

If you're talking about an automated trading system...just reverse the code / program and trade it as normal.

In contrast, if you're not using an automated trading system...your perspective about the price action is a very important variable in the losing trade method because many losing trade methods are because the trader is applying it incorrectly considering its not an automated trading system.

Thus, if you reverse the losing trade method...you as the important variable still remains the same. Simply, most likely trades taken in the opposite direction of a losing trade method will still produce losing trade results.

In contrast, you may have a chance if someone else was involved in which they take the opposite trades of your actual trades. Obviously they will not get the same fills nor the same exits...

That in itself will change the results as in less profitable...maybe not worth the effort especially if the person you're trying to copy has a temporary win streak because the market conditions change...making the losing trade method suitable for the changed market.

That's another issue...markets do change several times each year. Therefore, all losing trade methods will have a win streak and that's what sucks many traders down the rabbit hole.

With that said, to answer your question...others here at ET has tried it and it failed. Just use the search function and you'll find others in the past that have asked the same question and tried it...and then failed because they applied it to a trade method that was not automated.

The point with the above, the trader is an equal variable in the failure / success of a trade method. Just the same, its true for changing market conditions too. You can't just look at the trade method itself all alone unless its automated.

Also, as @userque stated...you need to know why the trade method is a losing trade method so that you don't duplicate that reason when you or someone else tries to take opposite trade positions. In fact, I wouldn't even bother with trying to take the opposite trades of a losing trade method if you don't even know the reason why its a losing trade method.

Regardless, just backtest it to know if such can be done. Thus, you don't need to ask anonymous members about it when you can easily backtest it yourself.

wrbtrader

 

[wmwmw]

Let's call an advantage that help a trader gain consistent winning an "edge".
So the opposite order to an edge is called a "disedge".
If a trader knows a disedge, he will immediately know an edge,because he only needs to reverse disedge to get an edge.
People lose not because of disedge, but because of ramdomness, or their edges are not big enough to overcome commissions, spread,etc.(which is same as ramdomness).
Now assume one trader has a strategy that gives him a winning probability of 51%,yet after commissions,spread,etc, he only get 49%,and his disedge gives him winning probability of 49%,after commissions,spread,etc, he get 47%.
So both his edge and disedge fall in "ramdomness".

 

[Heydrrich]

Logically if I took the opposite trade of a consistently losing strategy I would have a consistently profitable strategy, or am I missing something that I haven't accounted for? If my question is true, has anyone tried this before and was your opposite strategy successful?

Now you have a winning trade, and you decide to let it run. If your system is in reverse you would let your losses run as well. So it is all bias and mind tricks imo

 

[Volfixtrader]

It depends on the logic of startegy.
1) If you have conditions like: I will open only long from ... with stop loss 15 pips, the same results might be if you trade in opposite direction. Not because incoreect direaction, but incorect SL (to big or to small).
2) If you tested not a representative sample ( small periodы (3-6 minths) in some period (like fast failing in Spring 2020) and slow balanced movements in 2019 (for ES e.g.) you might have very big difference.
3) If you use some filters (indicators, volatility, est) you might have better but still negative results in case they don't have so big impact.