I don't understand how choosing a profitable strategy from thousands of unprofitable strategies will lose money.
How to avoid cherry-picking?
- Thread starter failed_trad3r
- Start date
The problem is that the cherry-picked system usually really isn't profitable.
Imagine this experiment - I take 4096 monkeys and give each one an ES short and ES long button. They press them randomly based on whatever whims go through their banana-addled brains.
At the end of the month, ignoring commissions and gap, roughly 1/2 the monkeys will be ahead. I shoot the other 1/2 (hey, this is a tough business) and let the survivors trade for the next month. At the end of a year, I will have on average one monkey left with a 12-month winning track record with no losing months. If you want a longer track record, all I need is more monkeys.
Is the surviving monkey a winning trading strategy?
Imagine this experiment - I take 4096 monkeys and give each one an ES short and ES long button. They press them randomly based on whatever whims go through their banana-addled brains.
At the end of the month, ignoring commissions and gap, roughly 1/2 the monkeys will be ahead. I shoot the other 1/2 (hey, this is a tough business) and let the survivors trade for the next month. At the end of a year, I will have on average one monkey left with a 12-month winning track record with no losing months. If you want a longer track record, all I need is more monkeys.
Is the surviving monkey a winning trading strategy?
Love you're monkey story! Are you an Economic or Military Adviser for the current administration?
The current administration has no economic advisors.
bravetom, I could not agree more.