What actually works.

[Vicky.1994]

Hi I have been lurking for quite a while and think ffactory is a good forum with quality traders on the boards,please no comments like all methods operate its down to plogy only because they don't.



There are dozens and dozens of methods on these forums but which ones really produce consistent pips with low drawdown in different market conditions?


Which ones are actually utilized to make a living and are making a fantastic income, are any of these?


When you've traded a method that is posted here and it is the sole source of income and continues to be traded by you for some time please can you tell me about which egy you use and the outcomes you have achieved.


It must not have an excessive amount of discretion because if it does I can not expect to replie the outcomes so before you put in the trade you need to know why you're entering, exactly what your stoploss is and you may depart.

I have been searching for method I could trade full time for several years but have to confess I am still in the dark waiting for somebody to flip the light bulb .

Help please...

[facundttimple]

I'm going to clarify Craig's post a little to reflect my own experience:


The very important aspect of trading is risk management, the trading process is only a minor portion of the equation.
Once you've got a profitable system, the most important aspect of trading is risk management. If your machine has a negative expectation, no quantity of risk management tinkering will make it profitable. However, a profitable system can dismiss an account when combined with too much risk.


All systems triumph drop, it's not possible to forecast the market, all you can do is make sure your trades are well handled.
Yes all systems have wins and losses of varying size, and knowing with absolute certainty what will occur next is not possible. However probabilities do exist, and under certain conditions it is possible to say for instance, that 65% of transactions taken long at this stage will turn into a profit if handled in such and such a manner. Once the trade is underway, effort and all of your attention should be on handling the transaction according to your predefined rules, which should have an advantage if you are investing in a system.


Risk mangement is independant of the machine de jour (where there are many), risk mangement works in both trending and ranging markets.
My own view is that your risk management plan should have a lot to do with the way the market typically acts following your transaction entry is signalled - for instance MAE, MFE.


That is it all boils down to actually, it is possible to exchange randomly and still make money if this is exactly what you need...
This sounds nice but I have yet to see any system or any person who trades randomly that consistently makes money. There must be an edge in the machine design or series of transactions to constantly overcome transaction costs (spread) and still bank a profit, and that does not occur by trading randomly.

[elboticario]

When you get into a drawdown, you need to say yourself hell , it's time to make some money today! , not that system has drawdown, I stopped. I think twinchell would agree with me though that this does not mean that you should put more money on it. This is becoming the gambler's fallacy and quite poor money management. Doesn't indie you are due for a win just because you are on a losing streak. Do not let short term, and have faith in your system's long term results streaks down you.

[carurastaoxn]

The most important part of trading is risk management, the trading process is only a minor portion of the equation. All systems win shed, it's impossible to predict the market, all you can do is make sure that your transactions are well handled. Risk mangement is independant of the system de jour (of which there are many), risk mangement functions in both trending and ranging markets. That really is all it boils down to really, you can exchange randomly and still make money if this is exactly what you need.... . .and have the stomach to keep in when the going gets tough. Sensible exit and entry. You are able to fight the battle with mechanized assault or with guerilla tactics. What works for others may not work for you. Go back to the fundamentals. Buy and sell when you created your profit. When the tide is against you're certain that you have CORRECTIVE steps available i.e. enough cash to cover if you are staying in. If you are using it know exactly what a stop loss would imply to you. If you are not using it know how long you may stay.

Good luck and carry on.

[Piluptf]

Why can you examine a system within decades of data? You might not think the market in 1982 is exactly the same it's today? Every system that is even remotely profitable in the long term has to be optimized at least once every year a lot longer, particularly if it's an intraday system. Rightly or wrongly in this situation, I was hoping to generate a system which was able to'survive' in majority (if not all) market conditions, and I believed that back testing the system over a very long time frame gave it exposure to a larger range of market conditions and behaviours. From reading your answer, it seems you're indiing that traders should be tweaking / change their systems from time to time as no one platform will endure for ever?

Admittedly I am getting mixed signals on this one and will admit that I am confused on this. But a lot of people including individual traders and professionals have recommened formulating a method, sticking with it for the long hual and under no position given into the urge to tweak your own system changes.


When a system can breakeven in one form, and excel in a different kind of market, you have discovered something worth trading. Well... Admittedly, I have never seen or was able to invent a system which could possibly excel in one type and really breakeven at the other. By far and the huge majority of systems I have come across have exceled in one and decimate trading capital in the other... and also to drill down to core of my current dilema, is basically the systems have generated huge amounts of volitility / fluctuations in trading equity together with in the maximum, lack lustre or fair gains that could not even beat buying and holding blue chip stocks.

[bolindri]

I think if you're able to construct a system to have a positive expectancy within years of data, tweaking it slightly or so can make it quite profitable to exchange. By way of instance, if your system is hooked or feeds volatility off, chances are it isn't thriving as it once was in the present time. With diminished volatility, I would suggest tweaking the parameters to exchange based off the volatility that we have been experiencing. This does not signify that the system must fall apart should we regain volatility.


As per decimating funds in varying market conditions, there are a few articles in the past couple days regarding protecting your equilibrium which are good to read. I believe that protecting your account is a lot more important that achieving high yields. Drawdown, to me, is much more important than return, and should be for any serious trader.

[virr.exc]

It's called the coin sport, basically you use a coin to decide if you go long or brief then handle the trades (cut winners, let winners run), you may earn money as time passes. Also simulations can run on MT4, basically you pick a time and put limit orders above and below the price, you may optimize the MM parameters to make the system profitable.

By no means does that produce the most profitable system ever, but it makes the point that MM does have a major effect on system profit.

There are other things which may swing the odds in your favour (support, resistance, trend), but those things tend to be tough to automate in addition to a human can select it, I focus on automated systems mainly, just to clarify my opinions.

[milanichy]

My friend. . .if it will help

I use a combo egy of fibo(carolyn boroden/Mark Braun)

plus a method I developed called'the dual rajj'(my fav)

after attempting tons of egies I decided on this combo process which consistantly provides me 20 pips...

once I throughly test the R/R I shall post it...

[Vicky.1994]

Thanks to the offer Mr Kid!


If it works I am interested I am still searching for what really works!! (

[4betxino]

Hey schoe,

go and check out this survey and browse the steps/stages about the path to trading nirvana. See if any of it rings a bell https://www.cliqforex.com/trading-system-and-egies/2822-euro-yen-live-5-min-scalping.html
I read it every couple of months just to see if anything in my actions jumps out at me.

Love
Ademac

[facundttimple]

It's called the coin game, basically you use a coin to choose if you go long or short then manage the transactions (cut losers, let winners run), you may make money over time. Also you can run simulations on MT4, basically you randomly decide a time and put limit orders below the price, you can optimize the MM parameters to make the system profitable.

By no means does this produce the most profitable system ever, but it makes the point that MM does have a major impact on system profit.

There are different things which can swing the odds in your favor (support, resistance, trend), but those things are normally tough to automate in addition to a human can pick it, I focus on automated systems mainly, simply to clarify my remarks. Craig, cash management has a very specific definition and means something other than what you're describing. Here's the definition from Wikipedia:


Money management deals with the question of how much http://en.wikipedia.org/wiki/Risk a decision maker must take in situations where http://en.wikipedia.org/wiki/Uncertainty is present. More precisely what http://en.wikipedia.org/wiki/Percentage or what part of the decision maker's wealth ought to be put into http://en.wikipedia.org/wiki/Risk in order to maximize the decision maker's http://en.wikipedia.org/wiki/Utility_function.

Money management gives practical advice amongst the others for http://en.wikipedia.org/wiki/Gambling and for http://en.wikipedia.org/wiki/Stock_trading as well.

Money management can mean gaining greater control over outgoings and incomings, both in personal and business perspective. Greater cash management can be achieved by establishing budgets and analysing prices and earnings etc..
Boiled down to its essentials, cash management deals with what percent of this account to risk on a given trade. Money management will not turn a system profitable but should you risk too much per transaction, you can blow your account with a profitable system by taking on too much risk for the account dimensions.

What you're talking about when you add stop loss and profit target is trade management or depart rules. They could turn a system with no entry edge, if your departure rules have an edge. I don't have any issue with that statement. This can be a subtle but important distinction.

[virr.exc]

I know what you are saying but beyond dicing semantics, both are connected. An individual cannot consider position size without loss dimensions you cannot compute your maxium loss. I am aware that there are different egies to manage risk, but they all involve a linkage between standing dimensions and trading method. I don't know whether there is a name for the idea.

[Kivva]

Rightly or wrongly in this case, I had been hoping to generate a system that managed to'live' in majority (if not all) market conditions, and I believed that back testing the system during quite a while framework gave it exposure to a greater range of market conditions and behaviours. From reading your reply, it seems you are suggesting that traders should be tweaking / change their systems in time to time since no one fixed system will endure for ever?

Admittedly I am getting mixed signals on this one and will admit that I am confused on this. But many people including seasoned individual traders and professionals have recommened inventing a method, sticking with it for the long hual and under no position given into the urge to tweak / change your own system.



Properly... Admittedly, I have never seen or managed to invent a system that may both excel in one type and actually breakeven from the other. By far and the large majority of systems I have come across have exceled in one and decimate trading funds in the other... and to drill down to core of my current dilema, is basically the systems have generated enormous amounts of volitility / changes in trading equity together with in the most, lack lustre or mediocre gains that could not even beat buying and holding blue chip shares. Only a system that follows the price, will last for ever

[bolindri]

...2. When tested during quite a lengthy time frame (I am speaking about 2 decades and LONGER here), the net gain was only in the area of 1-5%, lower Rate of yield than buying and holding blue chips stocks... Why would you test a platform over decades of information? You might not think the market in 1982 is exactly the same? Each system that's even remotely profitable in the long term needs to be optimized at least once every year a lot more, especially if it's an intraday system.


. . .Most Mechanical Systems think either operate in Trending -OR- ranging markets, but not both. It the market is not fitting the system, drawdowns will result... Yes, you're correct. There's not any system which will perform well in all market conditions. If a system may breakeven in 1 form, and excel in a different kind of market, you've discovered something worth trading. Drawdowns need to be your friend. You need to say it is time to earn some money, hell when you get into a drawdown! , not this egy has drawdown, I stopped.