Are commodities better? Well, the whole premise of system trading is we don't know, isn't it? We design a system to do one of three things: (1)participate in every big move, at the cost of getting dinged in choppy markets, (2) catch reversals at the cost of missing some big moves and getting stopped out on some true breakouts, or (3) exploit some market anomaly or pattern you discover. All proceed on the basis that price or pattern tells more than logical reasoning. Plenty of people can't swallow that pill. Whether or not you should trade multiple markets with a system in part is determined by what kind of system you have. If you are trading breakouts, trend following type system, I would say yes, you need to trade at least 4 or 5 non-correlated markets. It's the one big move that will make your quarter and the more markets you cover, the better your chances. Kind of like fishing. I would look carefully at the eurodollar futures (note , this is interest rate product, not eurocurrency), the grains, maybe bean meal or bean oil, cattle, and the currency futures. I have found that systms that work on these types of markets often do not work well on the stock indexes. In backtesting, you need to make sure your data includes different market environments. I have seen several traders come on here convinced that a 30 minute breakout system was the key to trading the ES. It worked great for a period, but I know from prior backtesting that it will not alwys work well. If you want to stick to the stock indexes, perhaps you should consider a hybrid approach in which you have some systemized filters and entry set-ups but manage the trade using discretion, or some variation. You can get screwed badly by data releases, Fed meetings etc without an override.
It all depends on your timeframe. Choppinnes is not an absolute concept. Scalpers can tell you that they thrive in such an environment and a new system of mine is doing extremely well in it too, although it does have bad days, but that's understandable. You need to adjust in order to survive, nothing works all the time for all market conditions.
A month is not enough time: you are expecting instant results. Rather, expect something like a year before hitting upon some sound ideas and have the capital to fund yourself for at least that long .... If you are just starting out, stick to a few liquid indexes or stocks before jumping to other markets like futures... Profitable semi-mechanical systems can be built but it takes quite a bit of experience to do this: Dont expect to construct something easily: even if you have already done this for financial firms and / or trading houses it really takes years of experience to know how to do these. FYI: nobody will share a working system with you ... Be careful with advice on this board. There are only a few experienced people posting here. Your best bet is to hook up with a mentor and work directly under their guidance as an assistant trader if you have not yet had the experience ...
Good advice. Also, not everyone has the mindset to trade the same way. Some can tolerate a lot of losses, some can't,etc.
True, almost any system that relies on basically one breakout will fail from time to time. I know this from some other system of this kind that I studied. It did very well in 2002, but only broke even in 2001.
folks, you all totally rock. sorry if i'm slow responding to your specific advice... i'm still processing the wealth of ideas presented, and hugely appreciative of the input. thanks
IMHO one of the by far most neglected topic in private and semiprofessional daytrading is the portfolioeffect, resulting from several systems in several markets. peace
IMO vanilla should keep trading real money for a while , learn to understand the dynamics of the market and develop a few strategies then test their validity over the long term and refine them using TS . I don't see how you can start trading by playing around with backtesting softwares until you find a profitable strategy, it seems to denote a hope to find some holy grail that somehow is out there and it's only a matter of backtesting until you find it. I doubt technology and statistics are a superhighway to profits .