The Flaw in Trading System Reasoning...?

Quote from achilles28:

Doesn't it bode better for the future system profitability when the trader is aware of the root logic supporting that profitability; as opposed to blindly following a random mess of indicators and parameters that magically turned a profit over x days. Aka pure curve fitting using no logic.

Again, trying to connect the two doesn't make much sense.

Someone who is completely aware of his reasoning for placing a trade along the lines of what you cited earlier (psychological, geopolitical, environmental etc) will not care much for the statistical history of that particular trade, and in certain cases will even look to be more aggressive precisely because the position has a poor track record in the past given similar circumstances -- as those are the occasions where outsized positions can most easily opened and exited profitably. The trader relying primarily upon backtesting/statistics would not even consider this possibility, as it makes no logical sense whatsoever in the manner with which he views a market "edge".
 
Back
Top