..about half of my systems are contras to strategies which I tried which seemed to make good sense at the time. IMO a very powerful technique. Obviously from the other posts I am full of shit.
Hypo - again, you save the day (answer I wish to hear!). This will only lead me to try it (not trade it). I will check to see if contra stragedy works out or not. I will need to PM you one day soon. I have oh so many questions... Hope you are up to it.
...I recall that we traded public posts some time back. If I didn't piss you off, feel free to PM me. However, for any general issues which aren't proprietary, I suggest you keep it public so that the ignoramuses here have at least the opportunity to learn and to repent and recant. That said, always glad to correspond privately. As the old joke goes, "Therapists go into private practice so they can practice privately." I offer as proof of my assertion about reversing system rules that George Pruitt of Futures Truth said recently in ActiveTrader that it's stupid to contra.
If you are going to "reverse the signals of (a worst) system, and trade it from the other way" you are already well down the wrong track; you have lost your way and just want to jack away your time. You have to have, or better still you have to develop, your own system that works very reliably.. as simple and as difficult as that. You do that; you have then gone done the right track. This is the only road to success and fortune!
...speaking of contras, I assume you adopted an unwontedly obnoxious style for your post solely to match the style of your recipient. I would be pleased to move your cheese for you. When I get home I think I can find some references to book learnin' which will help make my case. I cannot do so myself because my own examples are proprietary.
Cheese, I am upset that a theory I had about the market is completely wrong. I take each hunch that I have, backtest it, with as little expectation of its results as possible. When the result fails, the logical step would be to discard it and move on. But, the issue I have is that there is no denying that the system counters my original thoughts.... If this is the case, and it turns profitable with a simple changing of my code to reverse buys and sells, then neglecting to go down this path seems like throwing away a good idea. It is good to see other members of the forum (Hypo) can validate he has tryed this before with positive results. I think that the real question to this forum I have started is about theories we form on the market, and how valid they really are. For example, a system created for the sole purpose of trading a "hunch", and that hunch being proven wrong.... well if its wrong, what is right? The reverse seems to be based on the data I have availble. Problem is, I cannot explain why the reverse is true! Therefore, is anyone elses system they trade (mechanical) make complete sense (can any system developer look at a chart and say "Here, this is why price does this at this point?")
in my experience, the reason you can't just fade any negative equity curve is because of transation costs. if you want to see an equity curve upside down, flip the signals and remove the commission. once you add in the commission (especially in high frequency systems), you will see, it is not a situation with two outcomes.
...I take your method and stretch it to outrageously absurd and exaggerated ends. I SOMETIMES TEST THINGS THAT I AM SURE MUST BE WRONG! My theory is that "malipulation" (that's a contraction of "malicious manipulation") rules the day in the markets. If the am's must be made to wrong so that the pro's can be right, and the ams trade what makes sense, then trading what doesn't make sense must be what works. Comprenez-vous?
...with all due disrespect, you must think I am a dumb f**k (I am trying to learn to be obnoxious like Jack so I can become a guru). Of course the contra system has to overcome the costs. It also has to be rigorously tested like anything else wrt the quality of the equity curve, the Z-score, peculiarites in the shape of the equity curve, ad nauseam. I am telling you, as straight as I can, no BS, that contra-ing a failed system SOMETIMES works. I didn't say ALL the time. Nowhere in backtesting is there room for asking whether or not a system makes any sense. My two best systems make no sense at all, and they each yield over $800 per NQ per month.
fading a system... i go contra certain setups, but i have a ton of fundamental and technical exceptions i've built up. having said that...the big thing is to avoid the bad tail. i have a high % of winners, but always, always, ALWAYS close out my negative trades overnight, because i can get killed the next day if i'm already down a chunk. so i'd say, if you're fading anything (and having a high winning %), just make sure that there's virtually no chance for a bad tail.