How long does a system last?

P

pwells

My brother and father are day traders and I've been following their latest system, which has been doing well this year.

I have heard that the performance of any system changes depending on the market environment and possibly others trading or fading the system.

So how long can a system remain profitable - can it remain for years? Are there any factors or types of systems that correlate with the longevity of a system? Thanks.
 
An actual in depth system with solid framework, along with a strong understanding of how markets work that has multiple layers to it(works and understands bullish and bearish environments) can last a long time if not virtually forever from what I’ve seen. It helps to have a mixture of both static and dynamic tools. I think a lot of people mistake the markets changing for nothing more than the degree of bullishness or bearishness of the markets, they just lack a consistently effective way to measure the change.

If something only works in a bullish or bearish environment than that seems more like a strategy rather than a system to me. Or at the very least not a very strong or dynamic system.
 
pwells said:
My brother and father are day traders and I've been following their latest system, which has been doing well this year.

I have heard that the performance of any system changes depending on the market environment and possibly others trading or fading the system.

So how long can a system remain profitable - can it remain for years? Are there any factors or types of systems that correlate with the longevity of a system? Thanks.
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A system that can adapt to volatility, trend, new price action patterns, etc. can last forever, theoretically. Adaption is the key.

Adaption by self-adapting parameters, and/or adaption by a system that chooses among multiple pre-optimized strategies.
 
trdes said:
An actual in depth system with solid framework, along with a strong understanding of how markets work that has multiple layers to it(works and understands bullish and bearish environments) can last a long time if not virtually forever from what I’ve seen.
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That's my personal experience too from the last 20 years.
A system that adapts itself to the changing market behavior should work for a very long time, if not forever.
So I don't believe in KISS or 1-2 indicators systems, as these system don't work in all circumstances, they have huge limitations because of their simplicity.
I compare it with an automatic pilot in a car or the automatic pilot in a plane.
It can work forever if it can master all possible situations that can happen. But all possible situations means that the program will be very big as the all possible situations are almost endless.

All depends of course of what you call "a system that works".
In ES for example, for some "a system that works" makes 2 ticks a day, while for others "a system that works" makes 5 points a day.
 
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It depends. It can last for a few weeks only, or many years/decades.

For a system to last very long,
Day traders must recognize that there are many types of markets
(very fast/slow, very chaotic/messy, very gentle/smooth,
move a lot / move tiny amount, one-way market / swing-up swing- down market ....).
And their trade plan caters to the many types of markets.
It takes many years to learn the skill.

so if you hear traders saying don't use 1 min chart, you will
know his system will last for a few weeks only.
because at times, the market could be moving very fast.
 
1.The better system, the longer it can last. If a system can not last long, it is because it is not good enough.
2. The shorter the system's trading time frame, the longer a system can last. But shorter time frame system is more difficult to develop.
3.There are system's that can last forever. But adapting changing market can make them much more profitable.
 
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Some systems fail because they were just inconsistent. Even an inconsistent system could have long periods of profitability. But of all the times when we've been told this or that system failed because the markets have changed, has anyone been able to put up a chart showing how and when these alleged changes in the markets occurred?
 
tomorton said:
Some systems fail because they were just inconsistent. Even an inconsistent system could have long periods of profitability. But of all the times when we've been told this or that system failed because the markets have changed, has anyone been able to put up a chart showing how and when these alleged changes in the markets occurred?
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If a system is doing the same thing, everyday, every week, every month, then how can it be inconsistent.

The system didn't change, therefore, the market did. How?

Who knows all the ways the market can change, but easy to see changes are trend changes, and volatility changes.

I suspect that there are additional changes than just the obvious ones.
 
Simpler the system the longer it'll last, most obscure edges I've found don't last long then they get flipped from cash cows to just giving your money away.

Currently I'm just trading of ...

5Lwma High
5Lwma Low

Buy if upward near the low and vice versa, SL about 0.05% outside of the LWMA.

So simple, it'll work for ever*, just less trades if flatter or smaller profits per trade.


* I HOPE!!!
 
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