Holy Grail Strategy (knowledge vs. opinion)
- Thread starter RockRudy
- Start date
If I got so lucky as to find one of my strategies very very early, I dont think I would ever have learned all my methods of determining when a strategy is the real deal.
I would say that finding a working strategy very early, can actually be very dangerous, in that it could get you over confident and thinking that you must be great or brilliant, or whatever, without realizing you were simply lucky.
I can honestly say, that only a very small percentage of people have the skills and determination combination required to find a method to consistently pull money from the market without being simply lucky.
It took me years of enormous effort before I figured it out, and I had skill advantage that 99% of people dont have.
I would say that finding a working strategy very early, can actually be very dangerous, in that it could get you over confident and thinking that you must be great or brilliant, or whatever, without realizing you were simply lucky.
I can honestly say, that only a very small percentage of people have the skills and determination combination required to find a method to consistently pull money from the market without being simply lucky.
It took me years of enormous effort before I figured it out, and I had skill advantage that 99% of people dont have.
HINT: What takes you days or weeks to determine if a strategy is valid, takes me less than 1 second via automation.
So I can easily tear thru thousands of strategies an hour, while you spends days on just one.
well thats pretty much my problem. i dont have the computer programming knowlege to devlop a system let alone how to involve indicators. do you have any advise or what kind of direction someone like me should we be heading in as far as making money in the market? I feel like I have the desire to make it but also I feel like I don't have the ability such as yours to develop systems but surely there must be away for the average person to make money without it being "lucky"....
Thanks for any advise or direction you can give
u only need to know 3-5 indicators well. from what ive read traderdragon simply has the brute force that 99% of us dont have.
most people have no idea of what type of market they want to trade.
hence the indicators they learn are widespread and useless
define the tyep of market u intend to profit from. Once that is defined, DO NOT DEVIATE from it
learn 3 or 5 reliable indicators relating to your type of market. and i mean LEARN, get the formulas, understand the reasoning behind them. deconstruct them and understand when they do/dont work.
Construct entry and exit signals based on a synthesis of those indicators and PRICE. INDICATORS AND PRICE, not indicator only, thats simply doomed to fail.
Utilize a good money management system, perhaps fixed fractional risk units etc.
build, backtest, backtest by hand.
and then do a backtest on at least a good basket of stocks markets etc.
most people have no idea of what type of market they want to trade.
hence the indicators they learn are widespread and useless
define the tyep of market u intend to profit from. Once that is defined, DO NOT DEVIATE from it
learn 3 or 5 reliable indicators relating to your type of market. and i mean LEARN, get the formulas, understand the reasoning behind them. deconstruct them and understand when they do/dont work.
Construct entry and exit signals based on a synthesis of those indicators and PRICE. INDICATORS AND PRICE, not indicator only, thats simply doomed to fail.
Utilize a good money management system, perhaps fixed fractional risk units etc.
build, backtest, backtest by hand.
and then do a backtest on at least a good basket of stocks markets etc.
The holy grail, such as it is, may be found in this thread:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=76477
http://www.elitetrader.com/vb/showthread.php?s=&threadid=76477
Great. I am finding some knowledge in your answers.
Whitster and OddTrader: I started this tread with knowledge
that Holy Grail does not exist. But since all my strategies were failing in some minority of stocks, I always tried to optimize. Then I though maybe I am chasing the non-existant holy grail again.
All: I have an advanced knowledge of programming and am capable of programming pretty complex strategies. That however does not mean I can find one. But at least I do not have a handicap. (I am using wealth-lab for all backtesting)
traderdragon: You write "If I got so lucky as to find one of my strategies very very early, I dont think I would ever have learned all my methods of determining when a strategy is the real deal. " While I do not deny your answer, I have hard time understanding it. If you find a working strategy (be it early in the game or late) then the strategy should work all the time? Right? It either works (prove by backtesting) or it does not. Black and white, isn't it? So why is it not good" to find one early in the game.
Now, I think you are probably right in your answer that early find hurts, but I am missing the why.
Can someone point me to a good money management system articles. Not the system, but some place where I can learn.
Let's focus from now on, on a definition of a good strategy. What is the definition? Please try to asnwer the following questions:
A good strategy :
a) has to be combined with good money management system before it works (yes/no)
b) works all the time at a specified market vs. statistically most of the time (always winner vs. always winner in the long run)
c) Can be completely automated (yes/no). Once a strategy is developed it does not need any human input/modification in order to "work". It is left alone and it makes money (yes/no)
d) Have to (!!!) utilize different trading strategies such as going long at times and also going short at other times, or a combination of options and commodity trading vs. simply going long only or going short only or call options only or put options only etc.
e) anything else
THANK YOU
Whitster and OddTrader: I started this tread with knowledge
that Holy Grail does not exist. But since all my strategies were failing in some minority of stocks, I always tried to optimize. Then I though maybe I am chasing the non-existant holy grail again.All: I have an advanced knowledge of programming and am capable of programming pretty complex strategies. That however does not mean I can find one. But at least I do not have a handicap. (I am using wealth-lab for all backtesting)
traderdragon: You write "If I got so lucky as to find one of my strategies very very early, I dont think I would ever have learned all my methods of determining when a strategy is the real deal. " While I do not deny your answer, I have hard time understanding it. If you find a working strategy (be it early in the game or late) then the strategy should work all the time? Right? It either works (prove by backtesting) or it does not. Black and white, isn't it? So why is it not good" to find one early in the game.
Now, I think you are probably right in your answer that early find hurts, but I am missing the why.
Can someone point me to a good money management system articles. Not the system, but some place where I can learn.
Let's focus from now on, on a definition of a good strategy. What is the definition? Please try to asnwer the following questions:
A good strategy :
a) has to be combined with good money management system before it works (yes/no)
b) works all the time at a specified market vs. statistically most of the time (always winner vs. always winner in the long run)
c) Can be completely automated (yes/no). Once a strategy is developed it does not need any human input/modification in order to "work". It is left alone and it makes money (yes/no)
d) Have to (!!!) utilize different trading strategies such as going long at times and also going short at other times, or a combination of options and commodity trading vs. simply going long only or going short only or call options only or put options only etc.
e) anything else
THANK YOU
Hi Rock,
Just caught up with this thread and read through your posts.
When you say that during your backtesting, your system works on some stocks but not others - what are the characteristics of the stocks on which it doesn't work? eg - are the stocks low volume, etc?
Thanks
Damian
Just caught up with this thread and read through your posts.
When you say that during your backtesting, your system works on some stocks but not others - what are the characteristics of the stocks on which it doesn't work? eg - are the stocks low volume, etc?
Thanks
Damian
Hi Damian,
you are right I should be more specific. It does make sense that low volume stocks have different characteristics (e.g. volatility) than high volume stocks. All stocks I backtested against, were very high volume, that is DOW30 companies I began with. I never had a strategy that would either win or not loose money on all DOW30 companies. There were always some stocks in DOW that I lost significantly.
Thanks.
you are right I should be more specific. It does make sense that low volume stocks have different characteristics (e.g. volatility) than high volume stocks. All stocks I backtested against, were very high volume, that is DOW30 companies I began with. I never had a strategy that would either win or not loose money on all DOW30 companies. There were always some stocks in DOW that I lost significantly.
Thanks.
Hi,
During your testing, what position sizing method were you using for your trades?
Thanks
Damian
During your testing, what position sizing method were you using for your trades?
Thanks
Damian