Netpicks Ultimate Trading Machine
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I sent an email question to them about a week ago asking about how it backtests, profit factor, etc, and near instantly got the following response:
"Hello. This is not a Tradestation plugin â it is a full trading strategy. There wouldnât be a button we press in Tradestation to run a report and if youâre familiar with systems of that sort they rarely work in real-time. There is a set of rules, not overly complicated that you follow between two different charts that will line up to give you a buy or sell. From there it is our targets and stop placement that takes over from there including moving stops and locking in gains. Thanks."
When I responded confronting them that if it is rule based, of course you could easily produce a strategy performance report with TradeStation, I never heard back from them again...
With that being said, their magic indicator merely appears to be a slow stochastic with some different settings for the 3 and 10 min charts. I haven't had time yet to throw together their obvious "strategy" into TradeStation to get a real performance report, but no doubt it backtests poorly or else they'd have been marketing that too.
If anyone actually bought the package, I'd love to hear from you about any particular "rules" which weren't obvious in the demos to backtest it more accurately.
"Hello. This is not a Tradestation plugin â it is a full trading strategy. There wouldnât be a button we press in Tradestation to run a report and if youâre familiar with systems of that sort they rarely work in real-time. There is a set of rules, not overly complicated that you follow between two different charts that will line up to give you a buy or sell. From there it is our targets and stop placement that takes over from there including moving stops and locking in gains. Thanks."
When I responded confronting them that if it is rule based, of course you could easily produce a strategy performance report with TradeStation, I never heard back from them again...
With that being said, their magic indicator merely appears to be a slow stochastic with some different settings for the 3 and 10 min charts. I haven't had time yet to throw together their obvious "strategy" into TradeStation to get a real performance report, but no doubt it backtests poorly or else they'd have been marketing that too.
If anyone actually bought the package, I'd love to hear from you about any particular "rules" which weren't obvious in the demos to backtest it more accurately.Anything that has a risk of 2.1 points ( russell ) and a reward of 1.5 pretty much speaks for itself .
Just to break even every 100 trades you'd need 58 to be winners @ 1.5 and 42 losers @ 2.1.
To make any worth while money you'd need to be CONSISTENTLY well in excess of 75-80 % win rate.
Now to be fair, I understand there is a money mgt rule so not all losers will go the full 2.1 that's as much an emergency stop as yes/no proposition.
But still, I've been doing this for a number of years and have never seen anything consistently approach 70% overall ( including my own ) .
If there, is I'd sure appreciate being educated !
Anybody have anything to volunteer with the other "TM" as in ATM vs the UTM? ( Austin Passamonte - coiledmarkets.com )
Just to break even every 100 trades you'd need 58 to be winners @ 1.5 and 42 losers @ 2.1.
To make any worth while money you'd need to be CONSISTENTLY well in excess of 75-80 % win rate.
Now to be fair, I understand there is a money mgt rule so not all losers will go the full 2.1 that's as much an emergency stop as yes/no proposition.
But still, I've been doing this for a number of years and have never seen anything consistently approach 70% overall ( including my own ) .
If there, is I'd sure appreciate being educated !
Anybody have anything to volunteer with the other "TM" as in ATM vs the UTM? ( Austin Passamonte - coiledmarkets.com )
e.s.t., I'll just add this:
In my opinion, NO intraday trade method = system = approach can succeed <b>over the course of time, thru all market conditions</b> without at least a +2/-1 reward/risk ratio.
I personally trade the ER with -1.5pt initial stop seeking +4pt to +5pt profits. Today there was one to the short side (morning) and two - three of those to the long side (afternoon) using the correct entry-signal techniques.
I personally trade the ES with a -2pt / +4pt ratio expectancy, but the win rate for ES can be higher than ER due to more methodical price movement of ES versus spiky ER.
Using trailed stops when price action moves in favor shaves some of the max-loss scenarios and likewise max profit gains. Trade management is a personal task... one size definitely does not fit all for everyone.
Lastly, I absolutely do not use any type of systematic approach to entering trades. I've spent enough 100s of manhours writing = tweaking systems and trading them forward to know that arena is definitely not for me.
In my personal experience, learning to use chart indicators for defining potential direction and then chart patterns = price action for specific entries is the simplest, most effective mode of intraday trading.
No opinion on NetPicks specifically, just agreement with statements earlier about win/loss ratios. Any inverted ratio cannot, absolutely will not suceed over the course of time thru all market conditions.
A higher risk / lower reward scale demands the trader be perfect always, and we haven't seen to many of them around here... starting with me!
Hope this helps
Austin
In my opinion, NO intraday trade method = system = approach can succeed <b>over the course of time, thru all market conditions</b> without at least a +2/-1 reward/risk ratio.
I personally trade the ER with -1.5pt initial stop seeking +4pt to +5pt profits. Today there was one to the short side (morning) and two - three of those to the long side (afternoon) using the correct entry-signal techniques.
I personally trade the ES with a -2pt / +4pt ratio expectancy, but the win rate for ES can be higher than ER due to more methodical price movement of ES versus spiky ER.
Using trailed stops when price action moves in favor shaves some of the max-loss scenarios and likewise max profit gains. Trade management is a personal task... one size definitely does not fit all for everyone.
Lastly, I absolutely do not use any type of systematic approach to entering trades. I've spent enough 100s of manhours writing = tweaking systems and trading them forward to know that arena is definitely not for me.
In my personal experience, learning to use chart indicators for defining potential direction and then chart patterns = price action for specific entries is the simplest, most effective mode of intraday trading.
No opinion on NetPicks specifically, just agreement with statements earlier about win/loss ratios. Any inverted ratio cannot, absolutely will not suceed over the course of time thru all market conditions.
A higher risk / lower reward scale demands the trader be perfect always, and we haven't seen to many of them around here... starting with me!
Hope this helps
Austin
Hi Austin,
Thanks for your posts and positive contribution to ET. I enjoy reading your thoughts.
However, I disagree with your statement that you need a 2:1 RR to be successful in daytrading the ES.
It depends on your style. I find 1:1 entries (worst case scenario) are fine as long as you win 70%+. Now, I remember on one of your videos a while back you said your type 2 entries (trend continuation) have about a 70% win ratio. I am highly selective with my entries and I find that I get 0-3 trades per day in the ES with a 70%+ win ratio.
+4 is possible during normal market conditions, but during times of low volatility like recently I find the max moves are less. So, you have a choice to either keep a profit target based on normal volatility and have periods of not making much money or adapt your profit target based on the current market volatility and be willing to take less on some days.
Cheers.
Dear London,
Excellent points, I agree 100%. If a trader can hold disciplined to what you describe, success is highly probable.
The point I tried to make has emphasis upon <i>over the course of time.</i> Thru any six-month or one-year measure, we will see periods of low volatility and price range along with periods of normal and then high volatility and price range. There will be points where strings of big profits and high win ratios accumulate, and points where small profits or chopped stops will prevail.
Most traders find it very difficult to break 50% win rate, some cannot do better than 40%. That has little to do with their method or system in most cases... it is a case of over-trading, taking signals outside the system or method.
In other words, the "human error" factor is real, directly inverse to patience and discipline. Whereas a 1/1 ratio and 70+% win rate approach can exist, most (not all) traders find it nigh impossible to adhere themselves to such.
This is the difference between building a mechanical system with stellar track record versus tradint thru all of the drawdowns in reality, trade by painful trade. Likewise, any method that works well on paper must be operated with enough efficiency to profit.
Both systems and method trading require emotional control to operate effectively. That is the human error component for both, it exists, and the better a profit/loss ratio we have, the more probable said trader will succeed with real money over the course of time.
Hope my expanded explanation here helps!
Austin
Excellent points, I agree 100%. If a trader can hold disciplined to what you describe, success is highly probable.
The point I tried to make has emphasis upon <i>over the course of time.</i> Thru any six-month or one-year measure, we will see periods of low volatility and price range along with periods of normal and then high volatility and price range. There will be points where strings of big profits and high win ratios accumulate, and points where small profits or chopped stops will prevail.
Most traders find it very difficult to break 50% win rate, some cannot do better than 40%. That has little to do with their method or system in most cases... it is a case of over-trading, taking signals outside the system or method.
In other words, the "human error" factor is real, directly inverse to patience and discipline. Whereas a 1/1 ratio and 70+% win rate approach can exist, most (not all) traders find it nigh impossible to adhere themselves to such.
This is the difference between building a mechanical system with stellar track record versus tradint thru all of the drawdowns in reality, trade by painful trade. Likewise, any method that works well on paper must be operated with enough efficiency to profit.
Both systems and method trading require emotional control to operate effectively. That is the human error component for both, it exists, and the better a profit/loss ratio we have, the more probable said trader will succeed with real money over the course of time.
Hope my expanded explanation here helps!
Austin
I agree with what you say. A couple of points.
I think any good system should still be net profitable even if you trade it poorly. So, if you only made 50% of decisions correctly it should still be net profitable. We are human and no one can or will trade perfectly all the time.
I think what separates good intraday traders from the losers are primarily two things. The ability to think and good discipline. It's not really about the method. All traders actually have access to the same tools. There's nothing new in trading.
Humans consistently fail in any endeavour which requires discipline. Most people have no discipline unless it is enforced by some hierarchial structure. Think of dieting and people trying to give up smoking or people drinking too much or a myriad of other human behaviour. Think about what happened when the Romans left Ancient Britain. Even though the country had established laws left by the Romans anarchy prevailed as there was no one there to enforce them. Think about why there is so much divorce these days compared to our parents times. Social structures no longer encourage people staying together in their marriages. Think about why so many people cheat on their partner's these days.
This human weakness is really what creates opportunity in the market and always will. Despite the advance of technology and other factors the market really hasn't changed that much since it began. There are still humans making the decisions. Most of who are still weak hands. Technical analysis and quant techniques just make more people think they can win. It gives them the illusion of certainty when in reality there is never any certainty in the market.
I personally believe that there has never been a greater opportunity to trade successfully. We live in an instant gratification society where greed is paramount. Where competition is even more intense every year. It is no coincidence that the wealthy are getting wealthier and the poor getting poorer (just analyse the salary's of CEOs now and 10 years ago). It is a winner take all game these days. I am sure the top traders are making more money than ever.