How much time is needed to measure the consistency or you can gauge it based on your results?

[CBC]

Well, I can't agree, What if I prefer a bicycle?

They can get expensive to Emmet

 

[Handle123]

Hello All! Nice to be back in this site after a long break.

I have been trading on and off with mixed success and failure though in my last successful period, I was able to convert an account with 1X$ to 3 or 4X$ in 30 to 45 days. Though I had a system my losses were due to my own breaking the rules of the system and the system lacked few key parameters which I fixed now and started trading again since last 2 weeks. I am more disciplined and strict with closing wrong trades and I am able to convert 1X$ to 30X$ in 2 weeks or less. Though I still made some mistakes which I was able to correct quickly and able to maintain the discipline.

I want to know how long (in weeks or months) needed to measure a system's consistency to say this is a good system or reliable? It depends on the market cycle or economic conditions or it is based on the trading system alone?

Thanks for your time / replies.

Really hard to tell, I been trading same Long Term Commodity method over twenty years and tested it thirty years before I started it so I know what may happen. I have known what the drawdowns can be expected, and I have learned to never say "never". Since President elect Trump, I have had the biggest drawdown in all the time I been trading it, 50% of my positions have gone from sizeable gains that were closed out but due to rollovers and my stops are back to where I originally got in, lost all the closed gains been, so never think it will continue to roll along. It is all about playing the game and you have to put in enough fail safe rules so you can play tomorrow, otherwise there be no tomorrow and THEN you will be making those rules. When I design a system, I brainstorm of all the ways something could happen to go bad, if you not ready, market one day will. Three years if very good number whether system is more reliable.
Good luck.

 

[kent]

Thanks all for the comments/replies. I am a programmer turned trader and I have created trading systems and tested my strategy with backtesting in MQL4/MT4 with 4+ years of back data and this system was kind of promising though it was not a great winner. I also tested with forward testing with live funds too. I had to alter some parameters or go manual on final decision making before executing the signal. Also I take the profits out of the account based on one logic I got from this or other forum. When 1x becomes 3X remove 1X and keep it aside and trade with 2x and repeat the same. I intentionally started testing the system after Trump won, to test the system as well as my discipline. Also no holding trades after friday. Flat on Friday evenings.

Thanks again. So will have to wait for at least 12 months to measure the systems stability.

 

[Stockmarketmap]

"Reliability" can be subject to underlying growth that an asset class can / has produced. As equities tend to have an underlying understandable "rationale" for persistence in growth ( companies produce earnings by providing goods and services in the economy ) then there has been and, most likely always will be persistence and pervasiveness in their returns outcomes. Using academic and empirically derived "Capital asset pricing model" factors, by utilizing / investing in stock universes producing highest "performance premium" above other stock universes, we can view returns history ( provided by academia ) over vast time samples.
As you mentioned "market cycle or economic conditions", the equity market and attendant tactical investment allocation processes need many years for compounding to achieve it's full effect as market rises and subsequent corrections within economic cycles can encompass 5 - 10 year periods. This is why I tend to focus mainly on 15 year total returns outcomes.

For example, one simple 2 transaction per year strategy utilizing "highest performing" small cap value, emerging small cap, large cap value universes purchased in November and switched for more "defensive" utilities sector, bonds, or cash ( dependent on strategy heuristic signaling ) in May has produced risk mitigated, median 15 year rolling total returns of > 1600% over 60+ year sample ( column G). http://tinyurl.com/hh3ymn8 This type of repeating evidence accompanied by these type of returns, has steered me away from trading and into "tactical investing". Less time spent for a reasonable and empirically derived payoff. The ability to access, in recent years, the purchase of ETFs representing these underlying stock universes, has made this possible.

- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of world economies work for you

 

[Scataphagos]

I don't think it never, truly ends...even the best systems or traders...are always on the verge of suffering a noticeable hit
...that's just simply the nature of this game...of trading the market.

Ditto.

Here's a market axiom... don't know who said it first (might have even been me)...

"Keep doing what you've been doing... what has been successful for you... and the market will eventually knock you on your ass".

IOW... Things go "one way" for a while, then they go another way. As a trader you have to be ever vigilant about change.

If you can't adapt to change, you won't survive the long run. Just because you've made a lot of money in the last year(s), doesn't mean you're a winner just yet. (1 or 2 big mistakes can wipe out 20 years of profits.)

You haven't won the trading game until you retire and have the market's money. IOW... "You never count your money when you're sitting at the table... there's time enough for counting when the dealing's done".