Traders' Paradise System Explained

Z

Zizou

I was asked to come over to this board and demonstrate how I quit my job to trade the Traders’ Paradise System.

First off, I need to warn you from ALL the ones who are currently abusing the Traders’ Paradise system either to market themselves or their websites. Also don’t listen to anyone who says he/she has coded the system, simply because the man who spent 10 years building it has already stated that there is no way on Earth to code it.

Now how was I able to quit my job and trade for a living ??? :

1) I spent enough time reading and trying to understand the system as it was being published.
2) I spent no less than a month contacting THEEE_MAN (the guy who invented the system) with questions I had regarding the system. I did that almost on daily basis. This is when I realized that there is actually no way to code the system. Instead I tried to separately code some of the tools used by the system. Of course I couldn’t code everything, but the process helped me save some time.
3) I focused on THEEE_MAN’s favorite patterns and signals.
4) I back-tested the whole thing for the past two years. I looked at the results and I automatically decided to start trading it for real.
5) I traded the system for a month, and then I decided to quit my job and trade it for a living.

Now if you want to believe my story, then here it is as simple as it happened. And if you don’t, then just please waste no more time discussing this system, ESPECIALLY with the ones who know ASOLUTELY nothing about it, yet claim they have coded it, bla bla bla.

In the space below, I will share with you my QQQ trades ever since I started trading the system on August 14, 2002. By the way, I mainly trade the NDX and the QQQ :

August 14 : Positive close above a positive 5-day moving average, and difference between close and moving average is less than 3% ---> I go Long at $24.01
August 21 : 50% sold at previous peak’s resistance at $25.79
August 23 : Close below a flat moving average ---> 50% stopped at $25.16 ---> Profit $1.47 (+6.12%)
August 29 : Piercing Line ---> Buy Signal at $23.79
August 30 : 50% sold at the double moving average resistance at $23.96
September 3 : Piercing Line stop hit ---> 50% stopped at $22.70 ---> Loss -$0.46 (-1.93%) ---> Balance = +$1.01
September 11 : Dark Cloud Cover ---> Sell Signal at $23.45
September 13 : Piercing Line ---> Stop and reverse (Go Long) at $22.96 ---> Profit $0.49 (+2.09%) ---> Balance = +1.50
September 17 : Close below a negative 5-day moving average ---> Position stopped and reversed (Go Short) at $22.26 ---> Loss -$0.70 (-3.05%) ---> Balance = +$0.80
September 20 : 50% covered at the year low at $21.61
September 24 : Piercing Line ---> Cover and reverse (Go Long) at $21.10 ---> Profit +$0.91 (+4.09%) ---> Balance = +$1.71
September 25 : Dark Cloud Cover ---> Sell and reverse (Go Short) at $21.67 ---> Profit +$0.57 (+2.70%) ---> Balance = +$2.28
September 29 : 50% covered at the previous low at $20.69 ---> Current profit +$0.98 (+4.52) ---> Current Balance = +$3.26

Now the above balance holds a 14.54% profit, earned over a period of ONE month and a half. You call this a losing system, I call you STUPID ! People try to learn from others, especially the ones who are willing to help you for FREE !

Now, should you need to discuss this message with me, please come over to the Traders’ Paradise thread, and I’ll be more than willing to help you (and I’m sure THEEE_MAN would also love to), because honestly, I don’t have the time to spare on several message boards.

The link is :
http://www.stockhits.com/cgi-bin/ikonboard/ikonboard.cgi

Best Regards !
 
Zizou,
please kindly allow me to correct some of your statements that seem to be aimed at me and to give some comments.

1. I'm in no way associated with Wealth-Lab, Inc. and therefore have absolutely no interest in promoting their software or website. I'm a private trader and live in France. I just happen to be a user of WLD, which I like because I did a lot of Pascal programming in my life, and that makes coding in their programming language easy for me.

2. I have no reason to promote myself either. I have not and never had any intention to make money from my coding of the system, except for by trading it myself. When I saw the results of backtesting I was absolutely desperate - completely shocked. I had put a lot of time and effort into this work. That's when I decided to go public, in the hope that someone who has real trading experience with this system could help me out and tell me what's going wrong with the script. In the meantime, however, (and you can attribute that to the tone of your post) I came to the conclusion that there is nothing wrong with the *script*.

3. "the man who spent 10 years building it" has stated at the end of lesson 7 that the system can be completely automated. I can't quote from the stockhits.com website since this is "ENTIRELY PROHIBITED". I hope this is not already too much of a quote. But everyone who is interested can read it there. It was exactly this statement that got me startet to code the system.

4. I would be interested in your backtesting method, since you have not coded the system. Did you just look at the chart and say: "if I had bought here and sold there, I would surely have made a ton of money!" - Come on!

5. I will gladly follow your recommendation and waste no more time on this system. Already more than enough time wasted.

I wish you success in your trading and hope you will never have to try to get your job back.

Kind regards

Willi
 
Willibald,

I was one of the people who asked zizou to come over here and demonstrate the system. The guy doesn't know you, haven't heard about you before, so don't expect an answer. But it seems he and theee_man had already received several complaints from people accusing the system of being a failure, so the guy instantly accepted my invitation to come over and demonstrate how he traded the system.

As I told you earlier I'm still at the very early stages of back-testing the system. I know absolutely nothing about this pascal language you mentioned. However, I've got a few questions since you insist there's nothing wrong with the script, and I would really appreciate if you answer them.

First, I realized that many of the trades demonstrated by zizou were reduced at a previous support/resistance (trough/peak), does your code do that ? I am asking because I realized that without this specific modification the guy would have never made money trading this system.

Second, does your script reduce a larger portion of the trade when a double resistance/support appear on the chart, as demonstrated on the original lessons ?

Third, does your code handle gaps, and does it allow to reduce larger portions when a gap is combined with say a moving average or a support/resistance ?

From what I undestood so for, it is impossible to make money with this system unless all this stuff is included. Just like you, I read what theee_man wrote at the end of chapter seven, about automating the whole thing, but did you read till the very end of the sentence ? He also said that you have to make sure ALL inputs are stored. The guy admitted that he was never able to make it, but he invited other specialists to try. So did you really do it ? Did you include everything ?

If so, I guess you've already found yourself a partner !!!
 
Disclaimer : I don't know anything about the Trader's Paradise system.

I just ask myself :
How can someone could quit his job because he had a 14% return in one month and a half ?

I won't quit any job until I see this kind of return during one year at least.

Ok, my system is discretionary so I can't backtest it. May be that is the difference. I can't have such a strong faith in it.

Good luck to you Zizou.
 
TBA,
I don't know Zizou, never heard about him, and yet I did answer. I don't even expect an answer from him, however.

Now to your Questions:
I wrote that there was nothing wrong with the script (with emphasis on "script") because I got the impression to smell a rat. That was my way of expressing this feeling.

That said, I would like to quote here what I wrote in the "description" section of my script:

----------------------------------------------------------------------------------
Traders' Paradise system as described here: http://www.stockhits.com/site/id62.html

I have tried to program this as close to the plain English description as I could get. There was, however, some room left for interpretation. So here are my interpretations:

Entry must not be too far above/below MAShort:
above/below MA but below/above a tight Bollinger band (plotted black) of the same period. Coded in a boolean function so that it can be easily replaced by other "interpretations"

Enough volume for candle pattern to be valid:
I used a tight upper Bollinger Band on volume to determine this. Again, it has its own boolean function.

No trades when market goes sideways:
I used VHF indicator for that. Coded in its own boolean function. This could certainly be enhanced.

Interpretation of "Indecison" candle patterns:
The script doesn't act on these patterns.
----------------------------------------------------------------------------------

I never claimed the script to be perfect, and I'm in fact asking other WL members via this description to try to improve the script by programming and testing their own "interpretations". This process is the very nature of the WL community. I've been asking for help on the ET board, too. That was my very reason to post here.

The script doesn't take support/resistance and gaps into account. This is considered fine tuning by the author of the system, and thus - after I had programmed what I in my utter ignorance considered the core of the system, I thought that I'll do some backtesting first to get an impression before I engage in additional work. You know the results.

The fine tuning could be coded, but I will *certainly* not do it. For me, it's enough. All I tried was to get some help on improving my coding of a system that seemed appealing to me and to make public a script that could help other traders who are interested in this system. I never had the intention to harm anybody. But, as the saying goes: no good deed goes unpunished.

I suddenly found myself in the position of having to answer to a post of a guy who takes delight in name calling.

TBA, I hope that this post gives an answer to all your questions and has made clear what the script is and - more important - what it isn't.

Best regards

Willi
 
I'd do some Calculus on this system, find the derivative, and work up from there. Lot of mumbo jumbo that hides the real principle's behind what makes the system potentially work. It's basically a trend following system, incorporating early entries via candlestick interpretation, and exits using common S/R, with a built in trailing stop (ma). It tries to find a high % entry and then rides it for all its worth. I wouldn't personally quit my job after 1.5 months of successful trading. 10 years ago I doubled my money in a little over a month. After that I proceeded to lose it all. :)
 
ddefina,
you've hit the point exactly. It's a fairly conventional system based on principles you can read about in nearly every trading book - back to Edwards/Magee originally published in 1948. That's what made it so appealing to me - after all my recent scripting work with adaptive MAs of various kinds, Hilbert transforms, signal processing and auto optimization etc I thought it would be refreshing to go back to the basics and try something that simple. I hoped that using several standard approaches, bundled together in this trading system package, would lead to some synergy effects.

Honestly, I really don't understand why this has stirred up so much emotion. After all, it's just a trading system, and the trading systems available for free on the internet are innumerable. On the WL site alone there are several hundreds of them, and some show performances that literally dwarf even the claimed performance of Traders' Paradise. So what?

And that, hopefully, will be my last post in this thread. I guess I have said all I had to say. And I have learned my lesson.

Good luck to you all.
 
Originally posted by x-or
I won't quit any job until I see this kind of return during one year at least.
More...

Believe me, there are jobs even you would quit without a working system.
 
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