Most profitable / favorite strategy

[intradaybill]

Trend following is by far the most profitable stra.rtegy both in theory and in reality. It is the only startegy where the enemy is you, not the counterparty or the broker. It is also the most difficult.

I am surprised you have not included TF.

In faster time frames, only parameter-less startegies have a chance. Any strategy that includes even one parameter that is optimized will fail. This does not mean that all parameter-less strategies are profitable.

 

[ssrrkk]

Quote from intradaybill:

Trend following is by far the most profitable stra.rtegy both in theory and in reality. It is the only startegy where the enemy is you, not the counterparty or the broker. It is also the most difficult.

I am surprised you have not included TF.

In faster time frames, only parameter-less startegies have a chance. Any strategy that includes even one parameter that is optimized will fail. This does not mean that all parameter-less strategies are profitable.

Oops, yes, duh, had a mind block on that one and obviously I don't use that strategy. I guess we need to redo the poll, or ask people to reply this thread and say TF and we need to add up. Sorry!

 

[ssrrkk]

Quote from ssrrkk:

Oops, yes, duh, had a mind block on that one and obviously I don't use that strategy. I guess we need to redo the poll, or ask people to reply this thread and say TF and we need to add up. Sorry!

Just one question: do trend followers not use price action to decide entries and exits?

 

[gmst]

Quote from ssrrkk:

Just one question: do trend followers not use price action to decide entries and exits?

TF followers do use price action but still TF is a class in itself. It definitely deserves a different option, pls don't include it under price action, for otherwise price action will be all encompassing.

Also, add one section for quantitative trading - to include trading strategies like mean reversion, momentum etc. Stat arb is too wide a name and usually is applied when trading multiple stocks/futures together. But there are a lot of traders who apply quantitative techniques just to trade 2-3 markets to trade that specific market's behavior. In your present choices, there is no category for such traders.

 

[Wide Tailz]

Quote from intradaybill:

Trend following is by far the most profitable strategy both in theory and in reality. It is the only startegy where the enemy is you, not the counterparty or the broker. It is also the most difficult.

I am surprised you have not included TF.

Exactly what I was thinking. I guess it could be considered part of "technical analysis".

 

[ssrrkk]

Quote from Wide Tailz:

Exactly what I was thinking. I guess it could be considered part of "technical analysis".

can someone please define trend following? thanks!

 

[Wide Tailz]

Quote from ssrrkk:

can someone please define trend following? thanks!

Using any type of price action, technical indicators, or other price based method to define rules with the objective of buying when price is going up, selling when price stops going up, and likewise sell short and cover.

The idea is to use statistics generated from simulation, "back testing" or chart observation to capitalize on the theory that the market requires time to adjust to changing fundamental, psychological, economic, and liquidity inputs.

A mandatory rule for any trend follower is "never predict the future".

 

[HATEtheRisk]

Quote from Wide Tailz:

Using any type of price action, technical indicators, or other price based method to define rules with the objective of buying when price is going up, selling when price stops going up, and likewise sell short and cover.

The idea is to use statistics generated from simulation, "back testing" or chart observation to capitalize on the theory that the market requires time to adjust to changing fundamental, psychological, economic, and liquidity inputs.

A mandatory rule for any trend follower is "never predict the future".

LOL

Thats exactly what i understand under Technical Analysis discretionary trading.

Yes i trade trends, but with trends i mean patterns what repeat over and over - this is a trend and why it is my friend.
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I thought always trend trading is, to buy in a started up move and hope it will go on........ no patterns, just bet on an up move, or a continuation ........???

i am confused....

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This is too funny

 

[Handle123]

Quote from ssrrkk:

Of course, the best is the method that is completely novel and nobody has ever heard of yet.

Actually, this is funny to me, as I have literally tested or had tested a few thousand methods in my time. After awhile, the best methods are not completely novel and everyone has heard of them. There are as many ways to define trend as there are entry methods, where the metal meets the meat is how to read what happens next. The real profits occur after the entry, and if you don't spend 95% more time on what happens after entry, most likely you will become one of the 95% who fail.

In my testing, whether long term or day trading, methods that work best are generally very boring ways to trade that require large stops for long term or no stops in day trading.

You work long enough in this business, nothing is novel any more, it takes long hours to become the best of taking many nuances and blending them into trade management.

 

[ssrrkk]

Quote from Handle123:

Actually, this is funny to me, as I have literally tested or had tested a few thousand methods in my time. After awhile, the best methods are not completely novel and everyone has heard of them. There are as many ways to define trend as there are entry methods, where the metal meets the meat is how to read what happens next. The real profits occur after the entry, and if you don't spend 95% more time on what happens after entry, most likely you will become one of the 95% who fail.

In my testing, whether long term or day trading, methods that work best are generally very boring ways to trade that require large stops for long term or no stops in day trading.

You work long enough in this business, nothing is novel any more, it takes long hours to become the best of taking many nuances and blending them into trade management.

I think this will be the experience for the vast majority of traders in all their lifetimes. Almost all viable methods that worked up to now have likely been found. However, there could be newer edges that arise due to changes in the market -- e.g., in market regulations, international affairs, introduction of new trading instruments, change in communication, other technology changes, etc.

So for the vast majority of traders, it will make more sense to focus on refining existing methods, i.e., use a known method, but do it better (faster, smarter) than anyone else -- that is until everyone catches up to you.