Not sure what point you're making. Markets trend up and they trend down, and they range. volatility goes up and down. That's what they've always done.
How long does a system last?
- Thread starter pwells
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Not sure what point you're making. Markets trend up and they trend down, and they range. volatility goes up and down. That's what they've always done.
I can't show you a system that stopped working because the markets changed because I say this does not happen. I'm not clear what point you're making.
So, the market changes.
A system optimized to a market of a certain volatility, or of a certain trend, may malfunction if the trend/volatility changes.
Trends and volatilities can last years.
So, again. A system that does the same thing, day in, day out, and doesn't change; yet, suddenly starts losing money, after making money, obviously implies the market changed, since the system did not change.
I can't make it any clearer. We'll have to agree to disagree if you can't follow that a system that doesn't change; and suddenly starts losing money; implies that the market must have changed.
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I am speaking about 12-24 months ago and now. Percentagewise the moves are much bigger than the change of the index.
Watch the ATR on the chart. Index rose 63% volatility rose 133% from 2016 till today.
My average profit per trade, with the identical system, is roughly 3 times bigger than it was 2 years ago.
Covid changed the market too, but a change is a change and has impact on your trading system. There is always an explanation why it changes. So the market changed, that was the point.
What you say is so general that it will always be correct.
If tomorrow the markets starts to jump up and down 1,000 points ES within 1 session, your statement is still correct. Markets go up and down as well as volatility.
It is like saying: the last years was a normal year. Each year people get sick and can die. Sometimes more and sometimes less. So Covid-19 has no impact on us. These +2,000,000 deaths are normal.
Equally possible that the system was simply experiencing a random period of good results. You can't show any evidence to prove your point.
The chart very well illustrates the effect of the covid pandemic on ATR.
Clearly, prices will become suddenly more volatile during times of global crisis. But we have had such a crisis every few years since history began.
Actually, many systems should work better under conditions of increased volatility, which seems to be the opposite of your main point. This doesn't prove your point that the market inherently and continually changes and undermines profitable systems, it just shows how these rotations cannot be proven. Like myths can't.
My point is that there are no invisible changes going on in markets that eliminate the profitability of consistent trading systems.
Step 1: Predict the market direction and trend strength, call tops and bottoms and targets
Step 2: Why not just buy and sell every bottom/top? Reasons.
Step 3: Apply a system with 60% winrate depending on where the price is and where you think it is going
GG, if you manage to correctly predict every top and bottom, enough to become the richest person in the world, you can be a daytrader with 60% winrate making a 6 figures living
Step 2: Why not just buy and sell every bottom/top? Reasons.
Step 3: Apply a system with 60% winrate depending on where the price is and where you think it is going
GG, if you manage to correctly predict every top and bottom, enough to become the richest person in the world, you can be a daytrader with 60% winrate making a 6 figures living
It is because you are not able to find market change,not because market doesn't change.
There are too many market changes, but most changes I don't want to talk in public because that is not in my interest.
For the past a few months, on the day NQ was outperform ES,the market had high probability to go up . I mean on average each ES point is equal to 3 NQ points. If for some day at market open you see NQ is up 100 but ES is up 10 points, that means the day's probability of market going up is very high. I remember on one day I was long ES before market open as NQ outperform ES, but at about 10:00 am NQ was fading quickly and became underperform while ES was still going up strong, I immediately exit ES and in 5 minutes ES also formed a top and going down for the rest of day.
I mean this is a pretty reliable indicator that help me spot a top and why should I not take advantage of it?
But in history this is not a consistent phenomenon and it started a few months ago and I believe it won't last long. So I don't make it part of my consistent strategy.
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