Do people get same results with real trading as backtesting?

Quote from edbar:

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I contend that with TEST1 you will get stopped out 90% of the time. While with TEST2, it will be 50-50.


Ed [/B]
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LOL of course if you don't place the limit order but write it down instead you won't get stopped out. The position will also run past your stop and you will lose more than you bargained for.

If you getting stopped out too quick it's a risk management problem not an order problem. Your position size is too big, causing you to set your stop too tight.

Note that some scalping systems depend on limit orders. If you WAIT for the price to reach a certain level, THEN send your order you will miss the trade.
 
Quote from cunparis:

This should, in theory, be positive.

But what about in real trading? I'm a bit skeptical because it just seems too easy.
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When all the exact same people, who all have the exact same account size and who are all in the exact same mood are back again tomorrow as they were yesterday, then your back tested strategies should will work perfectly.

That's not much to ask for is it?
 
Yes, from the outside it looks easy; But it's not.

Even if the backtest looks pretty you still have to test the strategy with live shares and then make adjustments. Sometimes they work, sometimes they don't. When you find something that works well for a period you ramp the size and hope your hard work and diligence pays off. They're are no shortcuts, only more efficient ways to test and implement.

>8=]

QB
 
Quote from edbar:

TEST1
Buy 100 Shares of MSFT
Place a Limit Order to sell .05 higher
Place a Stop Loss to sell .05 lower

See which one gets taken out first.

TEST2
Next Buy 100 Shares of MSFT
Write down on paper to sell .05 high
Write down on paper to sell .05 lower

Now see which happens first.

Ed [/B]
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This test isn't reliable because you can't control how many others have their stops. At the same moment you put your stop for test 1, someone else could have put a stop for 5000 shares and he got stopped out (and you with him).
 
Quote from Joab:

When all the exact same people, who all have the exact same account size and who are all in the exact same mood are back again tomorrow as they were yesterday, then your back tested strategies should will work perfectly.

That's not much to ask for is it?
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"Wall street doesn't change because human nature doesn't change."

Paraphrased from a quote from jesse livermore. :)
 
Quote from cunparis:

"Wall street doesn't change because human nature doesn't change."

Paraphrased from a quote from jesse livermore. :)
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"Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators to-day differ from yesterday. The game does not change and neither does human nature." Reminiscences of a Stock Operator
 
You're seriously suggesting market makers are going to move the market for your 100 shares?

That is the most embarrassing analysis and conclusion I've seen in some time.

Quote from edbar:

I don't know what brokers have for hiding the limit and stop loss orders. I know my software has it built-in called "stealth mode".

To convince yourself whether your 100 shares of MSFT limit order matters, do this simple test:

TEST1
Buy 100 Shares of MSFT
Place a Limit Order to sell .05 higher
Place a Stop Loss to sell .05 lower

See which one gets taken out first.

TEST2
Next Buy 100 Shares of MSFT
Write down on paper to sell .05 high
Write down on paper to sell .05 lower

Now see which happens first.

I contend that with TEST1 you will get stopped out 90% of the time. While with TEST2, it will be 50-50.

I've already done it, and those are my results.

Ed
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