Quote from traderNik:
Hi everyone
Just getting started in systems writing. I would appreciate any comments from experienced systems developers. I am working on EOD data.
1. I am finding that I _can_ develop potentially tradable non-discretionary systems; the problem is, the good ones tend to go off very infrequently. I am wondering - do those who trade these systems exclusively have a large number of different systems that each go off rarely? Of course the type of system you are shooting for matters - I am speaking here of what should probably be called 'swing' trading systems (although in my development work I have found that a swing trade is simply one which you are not stopped out of!).
This system guarantees at least ten choices per day for entry and the trend is always well under way.
Part of my problem may be that I have this idea in my head that I should be able to devise a system that wins a large percentage of the time. I therefore work each system to the point that it produces a higher percentage of wins but triggers infrequently.
Because I have suggested a prefilter (below), you will find that all trades you take on have low risk because they are taken as the last half of a trend that is underway.
2. More importantly - I have found that the best stuff I have would be hard to trade, psychologically speaking - that is, it is very hard to devise a 'swing' type system that reliably goes off in every dip during a nice clean uptrend; it is easier to develop a system that goes off 1/2 way through up legs. What kind of an answer am I looking for here? Not a pat on the back - just want to hear from others who have been down this road and know what I'm talking about. Are your good systems 'hard' to trade in that they give signals in counter-intuitive spots? (Hmmm... what's counter-intuitive to one person might be perfectly reasonable to another, right?)
This is the prefilter section. You are chicken to trade the beginning of trends for psychological reasons that you have "learned". They impact you to the point nowadays that a lot of other related important learning is not possible since it is "blocked" biochemically.
Daily, go to stocktable.com or equivalent and set up a sort using the following: over 10 dollar stocks. Quality determined by EPS and RS set at >80 percentile. Order set by using % increase in volume (most to least.) Enter other stuff as you please.
Export the top 8 stocks with plus price change for the day to an âincubatorâ file. After 3 days delete each stock you added to the incubator.
Daily, transfer from the list of 24 incubator stocks 10 stocks to monitor. Do an add and delete daily if some stocks poop out on you. Maintain a âbestâ list of 10 that you do not own. All of these are just potential buys.
For timing of entry, monitor as follows for the best 10 stocks: Add the channel. Watch as the stocks BO of prior trough. Watch first right to left channel traverse (point 1 to point 2). Watch the first left to right traverse (distribution leg) (point 2 to 3).
Trade as follows: Enter as the stock begins itâs second right to left traverse.(Second accumulation for the cycle, the herd is entering at this point. You are, psychologicall, a Herd trader because of prior failures. Exit when the stock fails to attain a right to left traverse in the channel you have set up (this will turn out to be the maximum price in a bout three days).
NB Use 30 minute charts to monitor and daily data to get all selections.
I am using Metastock right now but the system tester in v 8.0 is not great; I am considering WLD but I would have to learn Pascal for that... any comments about the best system development program for non-programmers?
I have this stuff in an expert version in C language completely mechanical. Results for 6 months as used by a newbie are 11.1% per cycle. Cycle length 6.6 days. You will do better than this.
Some of the posts here are obviously written by individuals with heavy programming and high math chops. That's not me - I am hoping that a good system can be devised by someone like me who substitutes hard work for high concept.
You are citing myths here. There is no math IQ connection relative to making money. There is no hard work requirement for making money either. Most people are blocked from doing hard work. The above can be programmed by a beginner programmer for sure. In actual fact it is better to do the 15 minutes daily work by hand. Why? Because you will make more money. People cannot, as a rule follow rountine. They have IQâs that are too high. The other factor is their EQ. You are damaged good vis a vis EQ as I pointed out. How EQ is repaired is by doing successful routines. If a person makes 11.1% every 6.6 days on all his capital, he finds out that his EQ is repaired.
Just as with success in professions and careers, high IQ is not what counts; high EQ is what counts. Most people cannot learn this as a starter.
