New book on how traders are beating the HFT guys

[justrading]

Oh I see.

Well I guess if I showed you a backtested "system" that consistently lost 10% a year for the last 25 years, you would "forward" test it immediately because "past results are no indication of future performance".

After all, only clueless traders seriously believe that this losing trading system will keep losing money in the future, eh JustTrading?

Honestly I have no idea what fancy systems you come up with that you think need to be proven as working for the last 25 years before they will work today.

Markets go up, they go down, they go sideways. I just trade that with a mix of watching price and using quantitative filters to keep me out of certain markets.

That's it.

 

[Craig66]

In fact I don't think any of the profitable traders I know rely on backtesting whatsoever.

But some do rely on forward/paper testing systems before committing money.
Testing/systems are not necessarily bad as long as you're not simply permuting rubbish.

 

[lotto]

In fact I don't think any of the profitable traders I know rely on backtesting whatsoever.

Are the books teaching this? Why does everyone think this is how you trade?

​

 

[Grandluxe]

The conditions for this style of trading have been slowly improving since last year. The past couple months have been even better than average.

That's good to know but how did you survive the barren years?

 

[xelite777]

As I posted on another thread:

Greetings,

I have just received an email today from John Carter's group at "Right Angle Trading". The email states that twice tomorrow at 8am & 1pm EST, John will be hosting a video presentation on:" How to protect yourself against the HFT's".

The email verbiage reads:

"John will also show you how to "get in front of" the High Frequency Traders so you can take advantage of big market moves. HFT impacts virtually ever segment of today's markets - options, futures, currencies, and stocks - so there's something for everyone in this free training webinar. And, if you missed his video explaining how HFT sees what's happening inside the markets before you do, it's still available, so check it out."

I have no affiliation with John Carter or any other vendor for that matter. Further, I have no hidden agenda's with regard to this email or anything or anybody. I'm merely presenting this offer to the group, since it is very much in line with the title of this thread.

If you want to see this presentation tomorrow, you'll have to register with this guy: bradpowell@rightangletrading.com.

He's definitely got my curiosity aroused on this one. But then again, that is what vendors do...smile. I hope some of you ET'ers who are well versed on this topic will be there to take him to task on what he has to say. It's currently way beyond my pay grade.

KDASFTG

High frequency trading is the hot new thing right now, and every trader and his cousin will try to convince us that they have a guaranteed system that will "beat them at their own game".

Yeah, sure, we are going to beat super fast computers connected directly to their liquidity providers via T3 network access lines with our oh-so-fast Pentium 4 computer located in some basement in Kansas City, from our E-trade account and with our DSL connection

 

[xelite777]

Honestly I have no idea what fancy systems you come up with that you think need to be proven as working for the last 25 years before they will work today.

Is that so?

Take a look at these trading systems, then come back and tell me that a backtested trading system cannot perform for decades and decades, with the same exact original parameters:

http://media.futuresmag.com/futuresmag/historical/Issues/2006/7/Documents/Top-10-Trading-Systems.pdf

Note from the article : "... a trader who takes the time to correctly develop a trading plan with a solid money management overlay, has a much greater chance of success. Starting with a trading system that has done well throughout time is step one"

 

[justrading]

Is that so?

Take a look at these trading systems, then come back and tell me that a trading system cannot perform for decades and decades, with the same exact original parameters:

http://media.futuresmag.com/futuresmag/historical/Issues/2006/7/Documents/Top-10-Trading-Systems.pdf

You seriously either have a comprehension problem or are desperately looking for validation of your ideas.

Read all I have said here. I accept that backtesting is the way some people go, no problem with it, I don't do it and nor do I buy that is the only way to go. I asked why a system needs to test OK for 25 years before it will work today, I didn't say that it can't so why are you wasting your time providing links I won't bother looking at?

It would appear you think you have found the Holy Grail of trading. Wonderful, why don't you run along and make some money instead of trying to convince people who have no interest in your ideas that yours is the only way?

At the very least then you wouldn't be such a crashing bore.

 

[Grandluxe]

Backtest for 30 years, blow up in 3 days.

 

[xelite777]

I asked why a system needs to test OK for 25 years before it will work today

I never said that, all I am saying is that trading a "system" immediately with real cash before testing it with historical data (to at least make sure it is not a losing system!) is insane.

If you have a problem with that simple fact that's your problem.

It would appear you think you have found the Holy Grail of trading.

No, I did not find any holy grail, playing the odds and limiting risk is all we need to consistently extract money from the market, assuming our system has a real statistical edge to begin with.

And again, there is no way of knowing if a system is profitable unless we test it with at least 10 or 15 years of historical data and under all kinds of market conditions (bear, bull, sideways).

Wonderful, why don't you run along and make some money

I am already making money with a long GBP/JPY trade I initiated this morning around 1 AM (EST) but thanks for the advice.

 

[justrading]

At the very least then you wouldn't be such a crashing bore.

Cool. One last thing left to work on then.