Discussion in 'Strategy Development' started by radolym, May 1, 2006.
What is harder: to develop system that works or to follow system that you know works?
definately following a system you know works; almost any system can be made profitable, it's the stupid human nature of doubting yourself that ruins everything.....atleast for me - I'm always questioning myself like 'well, it did great in the past across all sorts of markets/conditions, but what it stuff changed that I havn't realized.... '
How could you ever know that a system works? That it worked in the past doesn't mean that it will continue to work.
You never know for sure. But I think any system that worked in the past have better odds to continue working in the future vs system that didn't even work in the past.
It's better than nothing. What are you going to do - start trading blindly praying that you won't crap out?
It may sound like I am splitting hairs here, but this fine distinction makes trading difficult. We never know for certain that we have a positive mathematical expectancy. There are only varying degrees of uncertainty. And there is also the possibility that a system's expectancy can change over time.
The skill in trading consists in having a system, style, or technique that we have confidence in; having adequate funding; then applying that approach consistently. How we develop that confidence largely separates the winners from the losers.
Beginners think that successful traders trade with confidence because they know how their trades will turn out. But it isn't so. Successful traders simply have reduced the uncertainty as much as they can and learned to live with the rest.
Develop your own.
Developing your own. I've been "developing" my S&P system for 10 years. I plan on simplifying it for robustness sake sometime this year.
My Forex system, which is a bout a year old now, is still under development but is coming along very nicely.
But it's true - no matter how good your system is or how right you have been in the past, there's always that bloody sticking second guessing. But I'm learning that it's not as important to be right all of the time as it is to be right when it counts. And that takes disicpline.
Managing systems are the hardest.
Both above are easy.
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