Fading an unsuccessful strategy?

Discussion in 'Trading' started by clambill, Feb 12, 2010.

  1. Has anyone here thought about doing the exact opposite of a trading strategy that just seems to totally BOMB!? I mean, in the last 30 trades, I've had like 27 losses. It's stupendous. Now, I just realized I could possibly just DO THE OPPOSITE and own the world in 4 months. What do you think?
     
  2. You will most likely still lose because of a couple of reasons.

    Your system is most likely designed to take advantage of "Choppy" markets or "Trendy" markets. Losing that many trades can happen if you get a really trendy day and your system is designed for chop, vice versa. So you might reverse your strategy and now the day becomes choppy instead and now your system starts losing again.

    If you have lots of small losses you will still have losses reversed because of slippage/commission.)


    Your best bet is to forward test a strategy over a month (I use ninjatrader market replay) and if it meets your expectations, then trade it.
     
  3. You are headed for disaster. If the market constantly moves against your trades, then your strategy is obviously flawed. What are you trading?..stocks, options, futures, forex?....what time frames??..... the culprit could be one of many things in regards to your strategy.

    Post some charts of your losing trades on here, explain where and when you entered and exited the position, and explain what strategy you been using, then we can look at it and give you an honest opinion of what you might be doing wrong.
     
  4. It's a method to participate in a change of direction in the EUR/JPY to capture large waves. Like if I wave made like a U, it wouldn't be to get in at the bottom of the U, but right when it starts to go back up again.

    One thing I did do however, is to look at 60 potential trades on screenshots that I did. During this period, I had losses as well. But, I noticed something peculiar. Let's suppose the method gives me 4 potential trades in 2 days. And the profits are twice as large as the losses, so I'd end up with a profit after those 4 trades. HOWEVER, let's suppose I get a signal to go long then the price goes up only a little only to take a large dive afterwards. I would usually wait until the price came down to hit my stop before getting out. But, during that time, I missed the signal to go short (because I was already long and waiting for my stop to get hit before exiting that position). In other words, every time you get in (either long or short), you might miss a signal in the opposite direction that could be a winner. This almost leads me to believe I should try taking every signal and reverse from long to short every time I get a signal. I did that once though one morning and was whipsawed.
     
  5. The opposite would be to stop trading.
     
  6. schizo

    schizo

    LOL. A typical beginner's bad luck. What will most likely happen is that you will buy at the top or cover at the bottom. It happens time and time again. It's incredible how the noobs always pick the exact top and bottom to bail out of their losers. So my answer is learn to trade properly instead of resorting to wild hints and guesses.
     
  7. what time frame(s) are you using?...are you using fibonacci retracement levels? You should. Fibs are very useful in forex, i use them when I trade the GBP/USD and EUR/USD.

    Is there a particular reason you are trading that pair? I honestly think you should concentrate on pairs that move with the most volume. Generally speaking, pairs with more volume(like GBP/USD and EUR/USD arent as succeptible to whipsaws and other choppy movements.
     
  8. Well, you're never going to believe this. But, I've read 37 books on trading, watched 24 videos on trading, worked as a day trader for 3 months, worked on developing my method for 18 months and feel like this is the twilight zone.

    I kind of don't want to totally give the idea away even though it's not working. But, it would be almost like trading a moving average crossover system. And since the EUR/JPY typically makes large waves, I figured it would be an easy fit. I'm going to keep on testing, I just don't believe the results.

    The time frames I've used? I've tried 45 minutes, 30 minutes, 15 minutes and lately even 5 minutes is failing.

    EDIT: If you want to have the biggest laugh in the world, I just like almost this instant made a trade and was already stopped out in a matter of minutes in the EUR/JPY. It's incredible, I mean it doesn't even make sense.
     
  9. schizo

    schizo

    Believe it or not, I was being quite serious even though it sounded little trite on the surface. BTW, you think you've read a lot of books? I'm pretty damn sure that I can count more than 37 trading books that are collecting dust on my bookshelf. :D

    Anyway, get rid of those books and the DVDs. With the exception of one (or possibly two) nearly all of them, if not all, are worthless. The book that I can recommend without feeling guilty is Marcel Link's "High Probability Trading". The other one is "Sniper Trading" by George Angell.

    With that I bid you success!
     
  10. i dont' understand how intraday people don't fade losers- all i do is fade and all it does is print money.
     
    #10     Feb 12, 2010