HowardCohodas Index Options Credit Spread Trading Journal

Discussion in 'Journals' started by HowardCohodas, Dec 30, 2010.

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  1. If memory serves, I said that your backtesting methodology, as you described it, looked rigorous and reasonably well-designed. However, I never saw anything more than the general description (you were unable/unwilling to provide anything more than that), so I wouldn't have been able to say whether this methodology has been conscientiously applied.
     
    #511     Mar 5, 2011
  2. It all comes down to earn enough premium before the blackswan big loss. And/or having the ability to predict an upcoming vol gap and stay on the sideline for that period. Not sure what else can be said about this topic.

    So howard either you get very lucky, or you can predict the market/blackswan correctly. Good luck and happy trading.
     
    #512     Mar 5, 2011
  3. Thank you.
     
    #513     Mar 5, 2011
  4. I don't think you have the complete set of alternatives. Therein lies the rub.
     
    #514     Mar 5, 2011
  5. His edge lies in a backtest in which he simply avoids trading any historical dataset that gives him the heebie-jeebies!

    Innovate!
     
    #515     Mar 5, 2011
  6. And this is bad? How?
     
    #516     Mar 5, 2011
  7. This is sad commentary on the state of affairs here on ET.
     
    #517     Mar 5, 2011

  8. omfg.

    1) It's intellectually dishonest and fraudulent. You're attempting to persuade subscribers based upon a fatally-flawed backtest.

    2) You cannot avoid it when trading live. Therefore the backtest is complete f*cking garbage. My 14yo niece knows better.
     
    #518     Mar 5, 2011
  9. To put the dialog in context and to present here what it was that I did, I went back and looked up the posts.

     
    #519     Mar 5, 2011
  10. It is irresponsible to assume that the first of four stages of qualification is the dominant contribution to the total qualification of the strategy.

    It is further irresponsible to suggest that one of the results of back testing should not be to identify conditions under which the strategy may not apply. Not identifying areas where the strategy does not apply is one of the common mistakes amateurs make when doing back testing. Next to "curve fitting" exuberance, this seems the most common error I have seen others make. And it is the mistake I made when beginning to learn about back testing.
     
    #520     Mar 5, 2011
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