My automated system - thoughts

Quote from travis:


This strategy, more or less, intermittently, makes money, but that is not the point. Let's think about why it should make money, and if it's likely to make money in the future.
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That is a clearly stated strategy. It is interesting you want to know WHY your strategy works. Reading your comments it is very clear how each qualifier reduces the opportunity of a negative expectancy trade.

It seems that strategy will make money in markets that reverse off of old and new highs. That the price must be within a narrow range, reversing, and within the time paramaters of >40 min, I would reckon the trade is rather intermittent for each index or equity it trades.

For predicting whether the strategy will remain "intermittently profitable" consider what scenarios would generate losing trades. 40 minutes pass since the new high occurred, the stock is trading in the top of the channels, and reverses enough for the 6 and 15 minute MA's to cross, but the reverse is false and the trade continues higher... how often does that happen?
 
Thanks to Mark for the link. I know you want me to share more of my strategy in order to help me, but I am only capable, in terms of time, effort and faith in people, to explain as much as I have. I'll see in the future, maybe I will be like you, sharing things more than I do now.

Thanks to bellman. He understood everything of my system. And the problem he mentions - he also understood that. That is the exact description of the problem I have, and it's what has been keeping my system from being profitable for years, until I made some changes in order to avoid some of those false reverses, but even now I have doubts on whether it will stay profitable, otherwise I wouldn't write here to reason about it, but I would quit my job and go on vacation. Those false reverses took profits away from my system, so much that the system was not profitable altogether. Another thing he understood is that the system basically only makes one trade per day on every market it trades. It waits all day long for that reversal. And sometimes it spends days without trading, even if it's trading (or rather "monitoring", because that's what it does most of the time) on about 5 markets at the same time. So this system makes 30 minutes long trades, and depending on the type of market, it will make from about a minimum of 5 to a maximum of 25 trades per week.
 
Maybe I missed something, but for this "clearly stated" system, I see no mention of exits, which in my experience are often much more important than entries to the profitability of a system.

Unless I missed it, if there are no mention of exits, it's tough to discuss the system as profitable...
 
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