If somebody has an experience of copying losing strategy with reverse?

Here is something to think about:
sometimes a perfectly good trade loses because the trader panics and gets out at the
first sign of correction, or has his stop too close

the "opposite" to his trade might just be to have a stop farther out

 

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Good one Carrer.
Long story short;
i did real, real bad/MUCH worse than random,LOL losing my first year daytrading. So PSAR it to swing -position trade . NOT meaning parabolic stop + reverse, i mean persistently swing and reversed from daytrading.
But be sure to do rule of 72 [12 hours work a day X6 days a week =72]+ get a good private library + public librarys card or all 3 . Market maker$ do real well daytrading so , it take$ all kind to make a market,BRY

 

About 5 years ago, there was a strategy I found explained in a book (by Kathy Lien and Boris Schlossberg) which I thought probably looked really bad, and it seemed to be hopeless on back-testing by eye, so I did actually try a lengthy back-test a little more formally, switching the long entries to short entries and vice-versa to test the opposite (using software called ForexTester-2 over a decade's price data, making plenty of allowance for slippage and commissions, and so on), and sure enough it really did make pretty steady profits with a PF around 1.3, and frequent trades, with absolutely no substantial drawdowns at all.

I'm embarrassed to say that I didn't quite have the nerve to try it live, just in case the markets had changed (and because the reverse strategy's PF of 1.3 was actually lower than everything else I was doing at the time).

But it was certainly a system that was bad enough to make it profitable to reverse the strategy and trade it.

I always remember that when I see forum posts claiming that the opposite of a losing system will always be a losing system too, by the time you factor in all the dealing costs, because I don't believe that's true.

There was also an academic paper published somewhere quite a while ago, which purported to show that fading a moving average crossover was profitable, but I can't remember the details now (I saw it refered to and cited in a textbook but can't remember where, now. As I remember one of the MA's was displaced to the right by about half of its own periodicity, and the stop-loss and targets were ATR multiples. Something like that, anyway).

(There was also something published once purporting to show that the original "Turtle methodology" could profitably be faded, at the time, on a range of instruments. Which I can fairly readily believe.)

So the overall idea perhaps isn't as outlandish as it appears, anyway.

 

HaHa, I think many if not most developing (frustrated) "traders" go through a period where nothing seems to work..."I know, I'll just fade myself."

 

If the opposite of a losing system is also a losing system, where does the money go? Trading is inherently a zero sum game? unless of course is it a marginally losing system, then yes-the vig will erode the other side but if a strat is 35% winners, with a reasonable risk :reward ratio, then fading that has got to be a winner.

 

The difference is more often the trader and not the system.

 

very well said ... speedo...

 

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Sounds fine, depending on which turtle sytem faded.
''Absolutely no drawdown??" Oh happy day, Oh happy day!! I'm glad to hear that-NOT sarcasm. Wonder if it like, XEla , it made,like a penny or 2 pennys?? Actually i will stop to pick a up a penny, cash market; a penny can add up over time ......US Penny sold for $2. 6 million , 1792 [lagging comment]penny.Good news...................................................................

 

Alas, no. (Wouldn't that be cool?!).

But absolutely no substantial drawdown that would, in itself, stop you from trading it.

From memory, some drawdowns of around 8-9% (not awful, for a system which trades very frequently and has a PF of 1.3?).

 

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Cool;
+ I remember her last name =Lien. I just noted what Miriam Webster says about Lien; The bank had a lien on our house .LOL
8-9% DrawDown seems very good ; would be for some.XEla i remember the name+ i never have remembered names easily. In MODERN TRADER magazine, before they changed their name, they had a fund ,a Hi% gainer, named''60% DrawDown'' . LOL; but true. I just looked thru 8 pages of google, dont know if they are still around ??LOL