Is there anything like a best trading strategy?

[Truckmorrisanathoy]

traider is right, HFT is a guaranteed money maker; however, it requires a huge capital investment beyond the means of most individual traders.

For individual traders, yes there are several strategies that are very profitable. However, there are none that anyone would be willing to publish for free. Let's say a trader has a strategy that averages $100 per trade. If he published it, more and more traders would start using the strategy, and the average profit would drop to $50, then $20, then $10, then $1 (yes there are traders who would be happy with only $1 profit per trade).

You have to find your own winning strategy.

I wouldn’t suggest this form of trading as suitable for newbies, or anyone with less capital. Isn’t market manipulation even more here?

 

[Itglive]

Trading is all about luck. In some cases, strategies may work or not. It is totally depend upon the luck. Sometimes it gives fruitful results, sometimes not.

 

[shriekpurser]

The best is
Day trading, LFT

I would second that, I have been exploiting hourly charts with CHF now more than others, also eyeing Asian markets after disregarding EUR and USD temporarily. What are your hot favourites?

 

[Nealeliff]

Can start with same strategy for different markets. Robert Carver's books are good reference. Perry Kaufman book on Alpha Trading Profitable Strategies that Remove Directional risk is a good read to illustrate this concept.

For customised strategies specific to markets, you can look at Ernest Chan books.

Yes, in the quant space, diversification is the only free lunch to get higher risk adjusted returns. And you can lever up and down according to your risk. Of course you need to be aware of hidden theoretical tail risks. Example selling puts strategy is one. So don't over lever for this strategy.

Manage your strategies as a portfolio and preferably allocate capital to them using a risk parity approach. That will result in more consistent and sustainable returns streams. Remember that your overall returns are path dependent. Try not to suffer irrecoverable losses (30-50%).

If you backtest your strategy, carry out walk-forward analysis & bootstrapping. In fact, i wrote a python package recently for this.

Thanks for all the reference stuff to learn from. I would also wanna know just one more thing - is mt4 alright for backtesting (what I’m using now) or something like tradingview would be a better option. I want to backtest to as far as 10 years old market data.

 

[sef88]

Thanks for all the reference stuff to learn from. I would also wanna know just one more thing - is mt4 alright for backtesting (what I’m using now) or something like tradingview would be a better option. I want to backtest to as far as 10 years old market data.

I rely on python for backtesting and deployment. R is another alternative for backtesting.

I'm not completely familiar with mt4. But I have seen its C-based syntax before. To me, it seems tedious to code in that.

 

[Nealeliff]

Don't diversify unless you want normal kind of passive returns. Just learn to trade 1 ticker and then once you master it then you can trade more...

I am actually leaning towards this thought.

 

[Snuskpelle]

I understand that it’s a zero sum market where not everybody can win. But many like me try to be on the winning side and are ready to put in the required effort to learn all the ropes.

That's a bit of a simplified view I had my first years. Even if we leave aside equity long bias, there are actors that are buying and selling for other reasons than to have "highest return" in your selected time frame. You may effectively be providing such actors with a service (being the best party for them to transact with) and your positive expectancy can be considered the premium you are paid for that service.

Consider for instance dip buying an evening the market tanks 3% and holding until a few days later after it has recovered. In such a case you are warehousing risk some actors don't want.

 

[zdave83]

Trading is all about luck. In some cases, strategies may work or not. It is totally depend upon the luck. Sometimes it gives fruitful results, sometimes not.

"I am a great believer in luck, and I find the harder I work, the more I have of it."
-- Thomas Jefferson

 

[Johannab]

I suggest you take the pipsology course on babypips: learn different strategies and all there is to trading. What pairs to trade, use of leverage, etc.

 

[Nealeliff]

I rely on python for backtesting and deployment. R is another alternative for backtesting.

I'm not completely familiar with mt4. But I have seen its C-based syntax before. To me, it seems tedious to code in that.

I have used it somewhat because I suppose it works well for less complex stuff, and perhaps that’s the reason why most pro traders don’t use it. I would surely want to scale up, even if it would require taking up some programming courses.