This is the way I have taught my friends to trade. When you want to buy long, take a small short position in another account in the exact same instrument. You don't have to trade live. It is a means to condition your subconscious mind that the market will never do what you expect it to do. And once you find something that works, automation is the holy grail
Today I had 30 losing trades and 5 winning trades, I broke even so I think it's more about risk (money) management than strategy. I'm pretty sure those odds are worst than any casino in the world, so my system may not be the best but my money management is good so I can handle long losing streaks. By the way, I only hit one home run within those 5 winning trades I went long APC @ 64.90 @ 1:00 p.m. and sold it to 65.30. Almost shorted GS @ 2:30 for a second home run right when it went below the pp but the platform froze (Laser), that was .50. My losses did not exceed .10. I think if you focus more on exits than entries you can do better, and maybe consider scaling in.
Clambill, what platform do you use? metatrader?....if so, I have a template that could help you alot. Its called MurreyMath Timeframes. Let me know...
You'd have to tell me what that's all about. One of the things I'd need to know is the maximum number of consecutive losses I could expect. I use Metatrader4 with FX Open and a weird program called Classic FX with FX Club.
ROFLMAO! I just made some drawings to try to understand what the hell I'd be doing if I'd do the opposite. And it actually makes sense.:eek:
sigh. If you're going to try this, try it on a longer timeframe. Why? Because on a shorter timeframe you will get screwed by the spread. If you're trying to enter or exit at 1,000 on the ES, for example, you will probably actually buy at 1000.25 or sell at 999.75 due to the spread. If you're day trading within a tight range, that .25 spread may actually be a significant percentage of your gains (losses). But if you're on a bigger timeframe, then who cares if you lose .25 to the spread after you're up 30 points or something. The spread then becomes a smaller percentage of your gains (losses) and doesn't matter so much. Remember that just because you reverse BUY and SELL orders doesn't mean that the prices will match. If your losing system does this: Buy: 1000 Sell: 997 Then when you switch them, you will probably end up like this: Sell: 999.75 Buy: 997.25 Because remember the bid/ask spread is where the trades take place: not necessarily whatever price the chart shows. Go open two OEC demo accounts (use 2 emails) and open them simultaneously and buy on one and sell on the other at the same time. You'll see you won't get the same price because of the spread.
I agree with Iron, you can't reverse engineer systems with small targets and stops. One more thing to add, on the longer term/higher target systems what tends to kill them are the large losers. Reversing that would boil down to getting bigger winners and cutting losses. plus ca change, plus c'est la meme chose
WTF I am going to propose that you never get your hands on a gun when they do the check on you. Save some trees Jack-stop posting
This is a very interesting question and one that I have been curious about. In my opinion you are correct to assume that if you reverse your system, or to be more accurate, reverse all your trades, you would make money, the problem is no one exactly reverses their system. Let me explain. Here I am assuming that you are trading a time frame such that the commission is not prohibitively large as a proportion of the stop or any profit target. Imagine if every time you took a position someone sat next to you would immediately take the opposite position. Then when you get stopped out, he closes his position with a profit. This is exactly reversing the situation and if your system, as it is, looses money, the other person will win. The fact that you have lost money is proof of this. The reason most of the time reversing strategies does not work is that we do not exactly operate the reverse strategy. I shall illustrate this point by breaking down the strategy and its reverse into the following steps Strategy Reverse 1 Signal to enter Enters opposite position 2 Enter stop No profit Enter stop no profit target target This is were the problem arises. Step 2 for the reverse strategy should be Enters profit target equal to the system's stop and have no stop loss Here I have assumed that you have not had a profit target in your initial strategy. Perhaps you had one in mind or were using a trailing stop but I assume like a lot of traders you limit your loss and hope for a large gain. The equivalent reverse strategy would be to have a very large stop (eauql to that very large profit you are hoping for) and a profit target equal to the stop loss in your main strategy. But this would be very very hard to do because if the very large stop is hit it could wipe the account. This would be equivalent to that very large profit that you are after materializing. Theoretically it should but who can trade with an indefinite stop? Also this supports the fact that by doubling or tripling your stops you get you increase your chances of winning trades but you are always in danger of that one trade the "kills" you