Winning in the EMinis

[MaxMin]

Quote from porgie:

I have no problem with stop loss settings or adjustments of same...I only adjust in direction of trade...I don't trail ....my sytem shows exit pretty accurately. Why do stops seem to be the big trick.

I don't understand the context of the question with regards to stops being the "big trick".

 

[privateisland]

Hi Gam, I think Don is full of $hit. I talked to him at the Las Vegas expo and he reminded me of a troll trying to sell posion. He lied to my face on a couple of items. I don't want to step on any toes so I'll leave it at this. He was a cocky, obese ass who disgusted me and my wife.
I also met Amt4swa there. He's extremly profitable. He does not post here now for other reasons, but he still rocks it everyday. So to answer your question- I think Don trys to sell his methods etc, by burning everybody else's methods.
P.S. Sorry to barge on this thread MM, just thought I'd throw in my two cents. Great thread and please keep it coming.

 

[Baruch]

Quote from porgie:

I have no problem with stop loss settings or adjustments of same...I only adjust in direction of trade...I don't trail ....my sytem shows exit pretty accurately. Why do stops seem to be the big trick.

Must be a very good system. Could you tell why exit is not problem?

 

[plumlazy]

Quote from MaxMin:

Imagine a purely objective system that has a win percentage of 90%. For every 10 trades, this system racks up 9 winners. But each of the losers is 5 times as large as each of the winners. In other words, the system has a 1:5 win/loss ratio. The system was developed on a backtest that only ran back 6 months, but because of the high frequency of trades, and the fact that it was properly tested on out of sample data there are 3 traders who have been given the system and the assignment to maximize their trading profits, using the trading system as they see fit. They must choose what their next course of action will be. The question becomes, which trader took the wisest course of action? The three traders are Archie, Bob, and Chris.

Archie looks at the test results and decides that he needs more information. So he acquires more data for testing, and proceeds to test the system an additional two years back. Archie finds that while the system performs well over the last 6 months, it does less well over the previous two years of data. In fact, the system is a net loser over the first two years, and a net loser overall when he includes this new data.

Archie sizes up the situation and decides to optimize the system so that it performs better over the entire period. So he does more in sample and out of sample testing to come up with a parameter set that is more *robust* over the entire test period. He finally settles on a parameter set and finds that it produces net profits over the entire period, but only performs at breakeven level for the last 6 months of data, and in fact the system happens to be in a drawdown for the last two months of that time. But Archie reasons that the system works well on a longer timeframe so that it should pay off in the longer term, so Archie decides to start trading his system.

Bob examines the test results and decides that he needs to now do forward testing to ensure that his system actually performs as well as it backtested. So Bob begins forward testing. He reasons that because the backtest period was only 6 months, he would make up for this small amount of data by doing a longer forward test. Bob chooses 6 months because it is equal to the length of the backtest, and feels that this should give him enough time to fully evaluate how well the system performs in all types of markets.

Chris examines the test results and notices that the results are extremely strong, particularly at the end of the test. Chris decides to forward test the system. But he chooses only one week because he reasons that this system can't stay this hot for long, and his job is to outperform Archie and Bob to keep his job. If the system forward tests favorably after one week compared to the results of the backtest, Chris decides he will jump right in and start trading the system.

Which trader maximized his trading profits?

Chris maximized his profits, Because:

A good solution applied with vigor now is better than a perfect solution applied ten minutes later.

- General George S. Patton

 

[MaxMin]

Quote from porgie:

I talked to a trader whose system allowed no thinking and no decision making....The system told him when to enter and when to reverse.........Exits usually only @ market close....always tight and safe stops...No psychology involved, thus, no pressure....I think he was not being honest with me or he was paper trading after the fact....Such a system is not possible...Is it?

Those who question whether something is possible are typically those who are looking and have struggled and struggled in vain and have either lost hope of achieving their goal or have serious doubts about reaching that goal and would like some confirmation. This applies to this particular question as well as the general question of whether anyone is making consistent money in the EMinis. Those questions are interesting but won't turn you into a winner.

There is no way to really know what another person is achieving in their trading over a message board. Even real life contact may be misleading. And in fact, the only way knowing this helps is in providing an incentive to continue working harder, and you may pick up some new ideas/perspective or be motivated to try some new things. You can get the same motivation from reading the "Market Wizards" books.

What is it that separates those who are struggling and doubting from those who are excelling and confident? It is simple really. Those who are excelling have done a better job of discarding what does not work, and exploiting fully those things that do work. Those who are struggling continue to test the same things in the same way, and on the same timeframes. They often have to do it their own way, and in so doing they find that even though their own way doesn't work very well, there is a certain amount of pride in holding onto that process because it is their process.

A good definition of insanity is, "Doing the same thing over and over and expecting a different result."

I would suggest to any aspiring pure mechanical systems traders to use the search feature on this site and read all the posts by acrary and vegasoul and to make note of any other system traders who they run into while reading those threads.

 

[Cheese]

"Those who are excelling have done a better job of discarding what does not work, and exploiting fully those things that do work." Agree. Nice one, MaxMin.

Yes, its problem solving really .. and on the macro scale this is the evolutionary progress of humans.

 

[PetaDollar]

Quote from SumJurk:

No offense, but unless you can post some proof that you're making money trading the e-minis (recent acct statement,etc), this thread is just a bunch of babbling.

Reading this thread reminds me of the vendors, giving all their wise advice, yet they can't make a dime trading.

Like I said..."No offense intended"

So you've read what he's got to say, and you think it's garbage, unless he's making money, then you think it's great??

 

[sunnyskies]

OK.. How's this for a very simple strategy. We calculate S2, S3, R2 and R3. If sometime during the day S2 or R2 is broken with strong momentum (however we choose to define it), we take a position in the direction of the break, with a stop being equal to half of (S3-S2) or (R3-R2). We take profits at S3 or R3 for a 2:1 risk/reward and exit EOD if neither exit is triggered. Will this make money? Well maybe not 3000% a year but say a consistent 40% with modest leverage?

 

[NihabaAshi]

Quote from sunnyskies:

OK.. How's this for a very simple strategy. We calculate S2, S3, R2 and R3. If sometime during the day S2 or R2 is broken with strong momentum (however we choose to define it), we take a position in the direction of the break, with a stop being equal to half of (S3-S2) or (R3-R2). We take profits at S3 or R3 for a 2:1 risk/reward and exit EOD if neither exit is triggered. Will this make money? Well maybe not 3000% a year but say a consistent 40% with modest leverage?

Hi sunnyskies,

The below link is to a thread by a guy that's currently trading a similar strategy...

http://www.elitetrader.com/vb/showthread.php?s=&threadid=29271

INihabaAshi

 

[SumJurk]

Quote from peterfigliozzi:

So you've read what he's got to say, and you think it's garbage, unless he's making money, then you think it's great??

Don't put words into my mouth. I didn't say it was garbage. I just get tired of getting sage advice from people who can't make a dime trading.

I guess it's just my distaste for the vendors and seminar teachers, who never show any proof they know what their talking about. Like I said, there was no offense intended.

If someone feels they're qualified to guide us, I think they should at least show a recent monthly account statement proving they are qualified.


Otherwise, it's just the same old rhetoric...