Strategy/method with high percentage of losers

B

bln

Anyone know of bad/failing strategies that have 80% or more losing trades?

If you take a losing system (negative edge) and inverse it, you will inverse the profit/loss ratio?

or if you take the order flow of a losing trader and inverse it in realtime, you will win?

I would like to test this teory out.
 
I am not saying this can't work but i can tell you that many have reported that they have tried to do exactly what you described and could not make it work.

Why? I have no idea.

Quote from bln:

Anyone know of bad/failing strategies that have 80% or more losing trades?

If you take a losing system (negative edge) and inverse it, you will inverse the profit/loss ratio?

or if you take the order flow of a losing trader and inverse it in realtime, you will win?

I would like to test this teory out.
More...
 
Quote from bln:

Anyone know of bad/failing strategies that have 80% or more losing trades?

If you take a losing system (negative edge) and inverse it, you will inverse the profit/loss ratio?

or if you take the order flow of a losing trader and inverse it in realtime, you will win?

I would like to test this teory out.
More...

This doesn't really exist. The reason most traders lose is not because of bad trades but commissions. It's the vig over time that will grind your account down to zero. The other way people lose is just the old fashioned martingale. Averaging into one bad trade. You can't reverse that because usually they are not following a signal, they are just having a psychological break down.
 
Trading MACD crossovers is a losing strategy in the longterm. Go long when the fast line crosses the slow line to the upside. Stop and reverse when the fast line crosses the slow line to the downside. So you are basically always in. If you happen to do this when there is a random big, prolonged rally it will be profitable for that time period, but stretch it out over a long enough timeframe and it will be unprofitable.

(here is where tons of passionate yet unprofitable traders/salesmen chime in that MACD is actually a brilliant tool).

Reversing the strategy is also unprofitable.

The market is a paradox like that.

You won't believe me, so backtest it yourself.

It still won't make intuitive sense even when you have the data in front of you. If you can manage to accept this, however, you will be in a better position than 90% of traders.
 
Quote from bln:

If you take a losing system (negative edge) and inverse it, you will inverse the profit/loss ratio?

or if you take the order flow of a losing trader and inverse it in realtime, you will win?

I would like to test this teory out.
More...

If a losing system when reversed is a winning system then it is as hard to find as any other winning system. It is actually a winning system, reversed. Get it?

This is usually one of the first aspirations newbies have when they start trading. The other is to take both a long and a short position in different accounts.
 
Quote from 1a2b3cppp:

Trading MACD crossovers is a losing strategy in the longterm. Go long when the fast line crosses the slow line to the upside. Stop and reverse when the fast line crosses the slow line to the downside. So you are basically always in. If you happen to do this when there is a random big, prolonged rally it will be profitable for that time period, but stretch it out over a long enough timeframe and it will be unprofitable.

(here is where tons of passionate yet unprofitable traders/salesmen chime in that MACD is actually a brilliant tool).

Reversing the strategy is also unprofitable.

The market is a paradox like that.

You won't believe me, so backtest it yourself.

It still won't make intuitive sense even when you have the data in front of you.
More...

False. There is no positive or negative expectancy on the moving avg cross over trade. Again, what will eventually kill the trader over a large amount of trades will be the vig. You can't blindly say something will just work or not work. Trading is more nuanced then that.
 
Quote from intradaybill:

The other is to take both a long and a short position in different accounts.
More...

This is actually viable, it's just most people think about it wrong. Going long 2 and short 1 at the same time is equivalent to being long 1.

Going long x shares/contracts and short y shares/contracts at different times with different objectives is, in the long run, not equivalent to being long (x-y).
 
Quote from Maverick74:

False. There is no positive or negative expectancy on the moving avg cross over trade. Again, what will eventually kill the trader over a large amount of trades will be the vig. You can't blindly say something will just work or not work. Trading is more nuanced then that.
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Well, if it's false, then just set up a system to trade the way I explained and rake in the profitzzz.

Wait, if you're saying there is no positive or negative expectancy, are you saying it's neutral expectancy?

I'm saying based on extensive backtesting, all variations of MA crossover systems are unprofitable in the long term. Reversing them is also unprofitable in the long term.

The only way an MA crossover system would be profitable would be if one could predict ahead of time whether or not the market was going to be trendy or choppy for a given timeframe.
 
Quote from 1a2b3cppp:

This is actually viable, it's just most people think about it wrong. Going long 2 and short 1 at the same time is equivalent to being long 1.

Going long x shares/contracts and short y shares/contracts at different times with different objectives is, in the long run, not equivalent to being long (x-y).
More...

That is not what I meant, you know it and you are wasting your time. I talked about newbies.
 
Quote from 1a2b3cppp:

Well, if it's false, then just set up a system to trade the way I explained and rake in the profitzzz.

Wait, if you're saying there is no positive or negative expectancy, are you saying it's neutral expectancy?

I'm saying based on extensive backtesting, all variations of MA crossover systems are unprofitable in the long term. Reversing them is also unprofitable in the long term.

Of course, if one could predict ahead of time whether the market would be choppy or trendy, then MA crossover systems would be the holy grail. But no one can predict that, and if they can, they're already worth 8 figures and they're not sharing their secrets.
More...

No, I'm saying the reason they don't work is not because the strategy is flawed, but because of the vig (both the spread and the commish). There have been countless studies on this with both retail and prop accounts. Over millions upon millions of data points, the avg loss is roughly equivalent to the total vig.

As was mentioned above, it's not mathematically possible for any strategy to consistently lose without consistently winning.
 
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