read your PM, thanks
vital analitics
(Why) do most traders lose?
- Thread starter kiwi_trader
- Start date
read your PM, thanks
vital analitics
one would think with a user name of vital-statistix you would find some value to backtesting.....
Perhaps alittle clarity wouldhelp...
Do you make a distinction between trading systems and backtesting???
I find it hard to believe you would think there is no value to backtesting and looking at various distributions and "vital statistics"..
the emphasys is on backtesting, not on testing in general. The premise upon which backtesting is based is totally flawed and results 99% of the time in curvefitted systems.
one can take an example how testing is being accomplished in neural networks where data is split up in three pieces: one for the development, one piece for the back testing and one piece for forward testing.
but having said that the whole principle of testing in this manner is fundamentally flawed but I do not want to get into that as it gets too close to my trading philosophy.
statistics are an integral part to my trading environment, but these are not implemented in the "tradional" way
vital statistics
Ranked- Retail Traders are under-capitalized.
- Retail Traders do not know how to take losses.
- Retail Traders are not realistic when it comes to their goals and their risk.
- Retail Traders are Gambling and are not doing the boring job of execution. They need the exhilaration and the adrenalin rush, from what they perceive as trading.
- Retail Traders do not have a complete plan to follow.
- Retail Traders most of the time do not keep a trade journal and refer to it.
I know I'm going to get a bunch of flak about this comment, but backtesting is of little value for most trading strategies and decisions, IMO. To do so properly, one would have to take into consideration so much peripheral data that it would become onerous. History, only adapted to current interest rates, current "global" conditions, gold, oil, war....and then overall volatility....dollar valuation, etc. etc. Simply reading what "was" without all the reasons for "why" it was, seems like a false reading to me.
However, backtesting to see how Specialists handle such things as opening prices, MOC's, intraday gaps, etc., would be of some benefit.
Just MHO.
Don
Interesting....But if you find backtesting of little to no use,than what is it that you could possibly find useful.Every form of technical analysis from Gann-Elliot-Edwards/Macgee-Wycoff is visually(and imprudently) backtested at a minimum,and clearly fundamental data has been rigouously backtested..
Statistical arbitrage and all mean reversion strategies as well as option dispersion strategies involve intense mathematical modeling and simulations...
I understand where you are coming from,but certainly see it in a different light..
I actually agree, to a degree. I fully agree that to just back test in a vacuum and not take into account tax policies, price of gold, geopolitics, dividends, interest rates, market psychology etc............... Is just back testing for the sake of back testing. I also think there's too much emphasis on rigid trading "systems" as well.
I personally think that at some point trading becomes an ingrained process and instinctive. That's not to say that there aren't things/indicators a trader should use, but those are just pieces of the puzzle and can often serve as points of fascination/distraction from the 'big picture". When it's all said and done, this isn't a pure scientific/mathematical practice. There is a lot of art to this game.