After a TON of work, and the help of someone on here, I really have been able to successful produce 100% mechical trading systems, and the results have been quite good. However what I always wonder is how is it possible? How is it that the mutual funds and other large institutaions with TONS of resources can't beat the market? Why can't they hire the smartest people on the planet? I, whom I don't consider the brightest crayon in the box is able to beat the market, granted it took a TON of time to understand how to build trading systems that beat the market, but Just how is it that the big guys who all those resources can't find and hire the brightest minds in the world to beat the markets? It doesn't make sense!
You've only been on here six months and already, with the help of members and "a ton of work" you are beating the market with an automated system! Congratulations, you are among the sharpest crayons on ths board! I am sure that we'll see you, along with Timothy Sykes and other notables, at Stevie Cohen's next lawn party.
i started w/ stocks due to the fact that it's a better market to learn on because it's not leveraged. also, i use no stops i find they do not add anything to the underlying strategy. Also, I believe that money management, although a very important part in system design, has no effect on the outcome of the stategy. i don't know why people think that building mechanical trading systems are much more difficult than trading manually. I mean after all, I have no idea how one would figure out beating the market without a thorough backtest. Upon completion of this you have your mechanical system.
i should have written this better... if a one person team who really ain't that bright is able to havo an edge, then why isn't every single mutual fund able to beat the market?
Change your simulation to use a billion or two as starting equity and see what your positions sizes would have to be. Generally, what works for us "little people" does not scale up so well trying to trade billions. That's why it can work, we are able to live off crumbs, like cockroaches.
I can turn **ANY** losing system into a winning system with this little tweak: <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1508710">
And how do you control risk if you don't use stops? BTW I mean not so much exact stop orders but simply a point where you admit you're wrong and should exit a position. What I am trying to say is what Mike already wrote above: are you sure that you'll be able to exit without an adverse slippage if your position size will be worth say several hundred millions, not even speaking of billions?