Always Profitable Trading System

Discussion in 'Trading' started by scalpmaster, Nov 1, 2006.

  1. Can a trading system have a net positive expectancy (2 accts or indices spread) by virtue of an algorithm itself without the need for accuracy (technical indicators/ back/forward testing/charting)?

    Have anyone given a thought or done research on trading algorithms/concepts that is purely based on money mangement?

    Maybe FX grid trading can be modified so that you do not need large capital/margin to implement in index futures trading...

  2. No, it can't be always profitable purely by virtue of the money management, that would be akin to the perpetual motion machine, but it might be profitable due to trading algorithms/concepts that exploit market features, like trends diversifcation etc
  3. money management: suppose the market is random, you will always end up around 0% roi, whatever system you might use. add to that risk of ruin.
  4. You might enjoy researching "Shannon's Demon" on the web. It's an algorithm for making money from a stock whose price is a random walk.
  5. enjoyable indeed. a problem i have with this theory is that it's tested on a ranging set of (random) data. i believe if you would test it on truly random data, which is not ranging, you would still go back to 0% profitability. or am i wrong?
  6. Um, why not test it on the historical data of IBM's stock price, or INTC, or SPY, or RMBS, or other interesting but decidedly non-random data?
  7. piezoe


    Scalpmaster, good luck in your attempt to find the Holy Grail. Since i am of the opinion that trading is as much art as it is science, i don't spend any time trying to find the "system" that works. I am just a prisoner of my trader's education i guess. I am stuck with basics and judgement based on the school of hard knocks.
  8. Anyone heard of STARS (Securely Trading A Revolving Spread) or used this book's method? Thinking of buying it...any comments?

    STARS is the ONLY method that will allow you to trade with no care at all about market movement. Why pretend you can predict the future when you know you can't?

    You know precisely how much you much invest for a particular return, and have no risk of ever losing because the wave peaks just keep rolling on.
  9. spinn


    I always ask the same question..........if it works, especially with no risk, why wouldnt they just trade a milliion dollars....make $100k a week.....and not deal with the admin of selling a book for $200 at a time and dealing with the closet knuckleheads who couldnt trade if they had tomorrows newspaper?
  10. kevinmr


    Taken from the TradeToFreedom website:
    STARS works by achieving two seemingly impossible goals: 1) you never lose, and 2) you earn money without ever predicting the direction of the market.

    Yeah, right. Don't waste your time.
    #10     Nov 3, 2006