i have a solid system. i'm looking for help - collaboration to trade it.

[JSOP]

This is where risk management comes into play. You should know going into live trading what your worst case scenario is and trade accordingly. If your strategy has a 20% win rate and you risk 10% of your capital on each trade then you're a fool, and will be a broke fool very quickly. However, a 20% win rate will absolutely work if your winners are outsized and you risk say 1% of your capital.

"Profitable" and "robust" have nothing to do with win rate. You have a lot to learn...

What's the point of trading then when you can't even risk 10% of your capital on a trade? LOL If you have $10K, you are telling me you can't even risk $1K on a trade just because it will lose 80% of the time??!! LOL If you are going to lose 80%, WHY bother trading??!! LOL Just to lose? By the eighth time, even if you risk less than 10% of the capital, you would've lost all or significant amount of capital that you won't have much left to trade even if the next one could be your home-run winner. And if you are only risking so little of your capital to trade on each trade, even if you make 100% of what you trade, your overall return would be very low. I said, I understand win rate isn't everything but when it's too low, it's really not worth it to trade.

But anyway, to each's own taste. If a 80% loss rate works out for you then that's fine with us.

 

[JSOP]

Psychologically that is too low for many people to deal with. Mind you I did cherry pick that contract to illustrate my example. Over time the win rate has been close to 50%.

And there is no hope involved. I backtested over 1,000 trades before I sim traded, and did that profitably before I live traded. I knew the math well before hand. I have periods where my draw down is over $1,000 per contract. I know this will happen because it has happened. I also know that I just keep following my plan and at some point the math will turn around. I know this will happen because it has and does.

If you trade based on hope you can be sure that you will lose your money to those that know.

Well like I said, most people have limited funds to invest. Once they have had a string of losses, they won't have enough funds to invest to make the next trade that could be the home run that make all their losses back. You must be loaded if you can afford to lose that much before a winner kicks in. Good for you and good trading!

 

[rtw]

Many new and unprofitable traders gravitate to high win rate "systems" or strategies. This is because it feels better to win more often. Invariably people try to use a high win rate strategy with a tight stop loss. In my experience this cannot work, except maybe in an institutional HFT algo, co-located server type situation. Maybe there are rare exceptions, but I'd think they are VERY rare. High win rate will generally mean low profit targets and high stop losses, so losers will be big and hurt. There's no free lunch in the markets, there is a trade off for everything you choose to do and how you design your strategy. That is reality.

your post is very interesting, i fully agree with your experience regarding developing automated strategies.

i would be interested in reading any further information you felt like sharing about your systems (what platforms do you use, whether your systems completely automated or you place orders manually, what kind of bars do you use, etc) but i don't want to distract from the original purpose of this thread, so if you have any threads where you discuss this and you could point me to them that would be great.

 

[JSOP]

you have been shown a couple of actionable, profitable, credible trading systems and couldn't be bothered to approve of any of them.

let's see your superior, unbeatable systems then. show us better results on the qqq for the weeks i sampled or stop wasting everybody's time. show us your systems with high winning rates, high returns and high profitability or stop wasting our time.

Your trading system is neither profitable (50% win rate with profits not even able to cover losses is NOT what I call profitable) nor credible( no actual proven trades paper or real-life), I shouldn't have to approve. Honestly I wasn't trying to approve. You needed advise and help so I gave you my honest opinion what traders are looking for, at least from my perspective what I am looking for in a trading system.

I am not wasting anybody's time, I am not the one here pitching a system to ask for weekly contribution when you can't even show a consistent profit rate or profit amount even over 20 sample trades. It's you who needs to stop wasting everybody's time LOL.

 

[WeToddDid2]

i have developed hundreds of strategies. i have backtested all of them to be able to tell what works and what doesn't. retail traders have a good chance to make good money with rather simple strategies on high enough time frames. as long as prices continue to be bought higher and sold lower in continued trends in the same way they have been for the last 50 years these systems will continue to work.

i'm a trained econometrist and statistician myself, i can tell you that your fear of the bogey phds is unfounded. some of them go on to develop winning systems but a lot of them never do.

You really missed my point.

 

[CHolmes]

I'm a mouse trader who started with a $7K account. I use Keltner Channels to help determine trend and trend extension. I trade CL and the indicies. Commodities tend to trend so I trade trend continuation on CL. Equities and therefore indicies tend to mean revert. I trade mean reversion 80% of the time on indicies, though I will trade trend continuation in some circumstances. I trade time bars, with CL being a little higher time frame than the indicies.

My win rate on my index trading is a lot higher than on CL. My stops are relatively large there also, so my losses are relatively larger then with my CL trades. A lot of new and developing traders think that a high win rate strategy is "comfortable". They confuse this with the ability to have a high win rate strategy where stops are also very tight. This is not possible in my experience. If you want (or in my case, happen to develop by chance) a higher win rate system or strategy it will naturally come with larger losses. In the beginning it's really impossible to have a fixed risk percent on every trade. But as your account grows it's easy. A 4 point stop on the ES is $200 so if you have a $5K account this is 8%. That's too high but if that's all of the money you have then you can either save more to build your account or roll the dice and see if you blow up or not. If you hit some winners and start to grow your account (or add more money) you can adjust your risk. Let's say you have $20K and the same 4 point ES stop. You can either risk 2% and trade 1 contract, 4% and trade 2 contracts or 6% and trade 3. That math is predetermined in your strategy and should be backed up by data, not just a hunch.

I've personally never really had the desire to pursue an automated strategy because I enjoy watching the markets and I enjoy executing trades. Even when it's painful and scary (and it still is at times), I still enjoy the challenge.

On your system, 20 trades over 8 weeks really is not enough. Considering the markets have been on tilt since early October and most of your data is from this time should be concerning. Maybe you have data going back to 2015. If so, then that's good. I'd suggest testing some out of sample periods to see how those hold up and really quantifying how your system performs under various market cycles and conditions. If it REALLY is profitable, you should consider ways to build more discipline to trade it yourself or find a way to automate it if that's possible. You're executing trades very infrequently so I can understand why it would be difficult to stare at a screen for days and days doing nothing and why this could lead to a lack of discipline. Perhaps there's a way to replicate your trades on a smaller time frame or with other products to increase frequency. That might help grasp your attention. It would be extremely difficult for me to exclusively trade a system or strategy that only gave 20 signals in ~8 weeks.

 

[JSOP]

i'm looking for help - collaboration from strangers with a shared interest in trading, i chose to be open and honest about all the relevant factors in this case from the start. i am indeed a hard worker, i hold two university degrees, i speak 5 languages going on 6, i'm passionate about finance and have spent untold hours researching and developing trading systems. it's just that i have never been a morning person and lately i have been struggling mightily with this even when i have robust systems that just need to be executed properly. i have tried everything i could think of, i have tried taking melatonin, but still i haven't been able to solve this on my own. fortunately, the world is full of resources and reaching to third parties is one possibility that could work great.

A suggestion: Since you obviously have such talents with language, why don't you become a linguist? That's obviously where your true passion lies and there is high demand for linguists and interpreters and translators and these professions command a quite high salary. Why not pursue something that you are truly passionate in instead of trying to do something that it's obvious you are just doing for the money? There is nothing wrong with pursuing trading just for the money but it's obvious it's not suitable for you. For one thing, your sleeping schedule doesn't even fit with the market. Finance requires a completely different mentality and frame of mind from linguistic studies and it's not something that you are used to.

i'm only thinking about win - win arrangements. there might be people out there who either have some trading capital but not a dependable system or who have no problem trading for all market hours or both. if we choose to go into a collaborative setup and they are making nice profits and are satisfied with everything they could choose to continue the partnership, if there's anything that was not to their liking they could stop at any time they want.

Trust me, nobody with money is going to be willing to trade a system that is only allowing him/her to win 50% of the time. Something that only wins 50% of time no matter how much is the win amount would not be considered a "dependable" system in most people's mind.

then again, there are other possible solutions i could take like hiring a person to sit in front of my computer and follow my systems or if it was possible to program automated strategies to reliably trade options that would be something magnificent as well.

This I think is the best arrangement for you at this point. Hire somebody to trade your "dependable" and "profitable and robust" system (since you can't even get up in the morning to trade) and to see for yourself how much money you can make although you could've done the same thing with a backtesting software which is basically automating your strategies to show you your potential profitability and it's free and you won't risk your trading capital but oh well, to each of its own.

 

[CHolmes]

Well like I said, most people have limited funds to invest. Once they have had a string of losses, they won't have enough funds to invest to make the next trade that could be the home run that make all their losses back. You must be loaded if you can afford to lose that much before a winner kicks in. Good for you and good trading!

If you don't have $1K to lose (more like $5K to $10K) then you cannot trade. Maybe trading micro lots in FX or something...

I mentioned I started with $7K. I got below $4K before I started growing the account. It happens very slowly. You have to have money to make money. There is no other way, except a combine or gauntlet and trade opm. But you first need a verifiable, quantifiable and repeatable trading edge. Without that you have a 0% chance of long term success. You might win a few hands but before long the house will catch up with you and eventually come out ahead.

I also posted my CLZ trades. This was a really good contract month. It's not always like this of course. I'm down 46 ticks per contract (-1.5 R) on the CLF19 contract. In trading you must, must, must be able to execute your plan even when the market is taking your money. There will be periods when you lose. This is not avoidable.

 

[JSOP]

If you don't have $1K to lose then you cannot trade. Maybe trading micro lots in FX or something...

I mentioned I started with $7K. I got below $4K before I started growing the account. It happens very slowly. You have to have money to make money. There is no other way, except a combine or gauntlet and trade opm. But you first need a verifiable, quantifiable and repeatable trading edge. Without that you have a 0% chance of long term success. You might win a few hands but before long the house will catch up with you and eventually come out ahead.

Well I define "having a quantifiable and repeatable trading edge" as having a higher than 50% win rate. I mean if you can't repeat your wins half of the time, how is that a "repeatable" trading edge? Anyway... Yes it helps if you are better-capitalized when you trade but that doesn't mean that you should throw it away on trades that you know that you are going to lose. Of course win rate is not everything. I mean you can still win 9 times out of 10 but this one time you lose, you lose everything (as what we have just witnessed with optionsellers.com) with bad risk management practice but still having a high loss rate is just not an efficient use of your capital in my opinion.

I also posted my CLZ trades. This was a really good contract month. It's not always like this of course. I'm down 46 ticks per contract (-1.5 R) on the CLF19 contract. In trading you must, must, must be able to execute your plan even when the market is taking your money. There will be periods when you lose. This is not avoidable.

It's good that you have the discipline to stick to your trading plan but if I were you, I would take a second look at that trading plan. If you can turn that 20%+ break-even rate to win rate, it would work much better.

 

[rtw]

i sent this by email to a friend, so here are some backtests for three symbols, for all of 2018 to date, trading one share in all cases. all three are profitable if they had been traded on options, and on aapl and nvda the largest individual losing trades were on positions held around earnings reports that a experienced trader would have never held.



qqq

TradeStation Performance Summary Expand
All Trades Long Trades Short Trades

Total Net Profit $19.00 $13.81 $5.19
Gross Profit $105.51 $56.95 $48.56
Gross Loss ($86.51) ($43.14) ($43.37)
Profit Factor 1.22 1.32 1.12
Roll Over Credit $0.00 $0.00 $0.00
Open Position P/L $1.53 $0.00 $1.53
Total Number of Trades 104 53 51
Percent Profitable 35.58% 43.40% 27.45%
Winning Trades 37 23 14
Losing Trades 67 30 37
Even Trades 0 0 0
Avg. Trade Net Profit $0.18 $0.26 $0.10
Avg. Winning Trade $2.85 $2.48 $3.47
Avg. Losing Trade ($1.29) ($1.44) ($1.17)
Ratio Avg. Win:Avg. Loss 2.21 1.72 2.96



aapl

TradeStation Performance Summary Expand
All Trades Long Trades Short Trades

Total Net Profit ($11.16) ($6.61) ($4.55)
Gross Profit $138.39 $78.55 $59.84
Gross Loss ($149.55) ($85.16) ($64.39)
Profit Factor 0.93 0.92 0.93
Roll Over Credit $0.00 $0.00 $0.00
Open Position P/L $15.97 $0.00 $15.97

Total Number of Trades 107 57 50
Percent Profitable 33.64% 35.09% 32.00%
Winning Trades 36 20 16
Losing Trades 71 37 34
Even Trades 0 0 0
Avg. Trade Net Profit ($0.10) ($0.12) ($0.09)
Avg. Winning Trade $3.84 $3.93 $3.74
Avg. Losing Trade ($2.11) ($2.30) ($1.89)
Ratio Avg. Win:Avg. Loss 1.83 1.71 1.97


nvda

TradeStation Performance Summary Expand
All Trades Long Trades Short Trades

Total Net Profit $47.85 ($7.88) $55.73
Gross Profit $314.58 $147.52 $167.06
Gross Loss ($266.73) ($155.40) ($111.33)
Profit Factor 1.18 0.95 1.50
Roll Over Credit $0.00 $0.00 $0.00
Open Position P/L $21.32 $0.00 $21.32

Total Number of Trades 102 55 47
Percent Profitable 35.29% 34.55% 36.17%
Winning Trades 36 19 17
Losing Trades 66 36 30
Even Trades 0 0 0
Avg. Trade Net Profit $0.47 ($0.14) $1.19
Avg. Winning Trade $8.74 $7.76 $9.83
Avg. Losing Trade ($4.04) ($4.32) ($3.71)
Ratio Avg. Win:Avg. Loss 2.16 1.80 2.65