The Rise and Fall of Mechanical Trading Systems

[DT-waw]

Quote from intradaybill:

The systems you are looking at are probably developed by amateurs with little or no trading experience who have nothing to lose posting them. [/B]

yes, i'd also bet this is the case.
but one thing puzzles me- why these systems made money since they were published on TS? is it just luck? if it is, these systems should start losing soon.

 

[DT-waw]

look at the Gold system.
https://strategynetwork.tradestation.com/StrategyNetworkStore/StrategyPerformance.aspx?ParentId=818

lost 975 dollars on long trade yesterday,
-235 after that and now is long since 1376.10

 

[DT-waw]

Another system to track:
Retrace_LONG_D_ES_2501.b
https://strategynetwork.tradestation.com/StrategyNetworkStore/StrategyPerformance.aspx?ParentId=912


94% profitable trades, profit factor over 8 in the last 3 years, unbelievable!

 

[DT-waw]

Cruiser system still holds a EURUSD short trade.
https://strategynetwork.tradestation.com/StrategyNetworkStore/StrategyPerformance.aspx?ParentId=1076
Who knows where it will close it.
It would take a lot of stop losses to wipe out such huge gain.

How it is possible that this system makes money and it is public?
Is it a weak system? What are the potential weak sides of other systems I track in your opinion? Besides being offered for lease?

 

[DT-waw]

Gold system is long from 1376.1
Current price 1389
The system is in $1,400 drawdown on closed trades.
Will it recover and hit new equity highs?

 

[DT-waw]

Forex Sniper system went short on USDCHF at 0.96528 on Dec 20th

https://strategynetwork.tradestation.com/StrategyNetworkStore/StrategyPerformance.aspx?ParentId=724

it is at approx $2,800 drawdown before that trade.
current price 0.9584

ScaleOut Barracuda
https://strategynetwork.tradestation.com/StrategyNetworkStore/StrategyPerformance.aspx?ParentId=1012

lost a grand on dec 20th.

Cruiser holds a short EURUSD trade. Wow, which manual trader would have the cojones to hold a trade for so long?

 

[DT-waw]

Forexsniper closed a short trade with a $558 net gain and is short again from 0.9545

 

[goodgoing]

Of course if you have a lot of systems in a network, some will generate large profits and even some will have huge profit factor and very high win rate. It is called the Normal Distribution. The performance of most of them is due to chance. Give them enough time and they will post net losses.

 

[DT-waw]

Probably its true- in the long run, all of these systems could end up losing.
But some of the systems available seem to be exceptions. Take a look at the ranking according to number of days since TS began tracking the strategy.

I wonder whether the outlier systems will continue delivering positive performance and more importantly- what is the difference in their trading rules which allow them being ahead of the others.

 

[DT-waw]

Or is it just luck?
Funny, when I've started a similar thread back in 2001 (loooong time ago!) about manual traders- why some make money - is it skill or luck? most people responding were outraged- saying of course when a trader makes money its a skill.....