If you could KIND OF predict turning points, could the remainder be done with money management?

Discussion in 'Strategy Development' started by 1a2b3cppp, Jan 28, 2018.

  1. -------------------------------------------------------------------------------------------------
    "The wife won't let me!"
     
    #31     Feb 1, 2018
    ironchef likes this.
  2. ironchef

    ironchef

    Good reason.:thumbsup:
     
    #32     Feb 2, 2018
  3. Cat88

    Cat88

    I think you are asking by managing 'how you add to the trade and take off some of your position' can you make money? I would say you need to do some statistics on your predictive ability with a reasonably large data set in order to have confidence.

    You might be able to make money but your question is asking about the predictive ability of your model and so to know the predictive ability of your model we need you to provide a little more detail.

    How are you determining your entry signals? Is it just by your own mental analysis - so you get a feeling because of a range of factors that you see or is it all quantitative signals?

    It sounds like your talking about relatively infrequent events and I suspect if you were already calculating a quantitative entry signal then you would have back tested it's on a range of data.

    Assuming yeah just buy based on your own assessment of the market and a range of Random factors that have caught your attention it will be very difficult to give you a definitive answer because you don't necessarily know how wide your stops will be and if you don't know that then it's very hard to work out the other parts of the calculation which is ultimately the sum of your winners being greater than the sum of your losers.

    If you could say that you were right about picking the market turn 30 percent of the time and the rest of the time you decided you were wrong when the market had moved 10 points below your entry then you can start to work out how far the market will need to go on one unit those 30% of times that you are correct in order to break even. Then adding to your position adds complexity to your analysis because you really need to have some rules around how you add to a position otherwise again the analysis will not be consistent so it will have little predictive value.
     
    #33     Feb 6, 2018
    tomorton likes this.
  4. tomorton

    tomorton

    Nice Cat88. Its not where you get in that makes the money, its where you get out.
     
    #34     Feb 6, 2018