I rarely chime in to comment on a particular call, unless it strikes me as profoundly absurd. This was such a case. And if we dont see a cover or some other action, we know this is pure paper trading
Nitro, I like you, but you are delusional. You are the alcoholist who refuses treatment, because he doesn't have a problem... Every time this violation occurs is an evidence, that your model (and the theory behind it) is fundamentally WRONG. What you are missing is that you have a notion that a plain mean reversal prediction can be used with a high probability ratio to predict the market. After 2 years and 4 major overhauls later, you have plenty of evidences to the contrary. I predicted in this thread 18 or so months ago that the market can trend longer than you can survive. That's what happened in the 2nd half of last year. Now you are back again, with version 5.0 or what and it still SUCKS. Timing is everything in trading, you predicted a -2% drop and we got a 1.5% rally so far. (For crybabies, on Friday I predicted a 13 pts upmove by Monday and that got fullfilled by 5 am Monday morning. That is because my patterns work, and when they stop working, I abandon them.) So do yourself a favour and stop this modeling nonsense. Again, the whole theory what your model is based on is incorrect. I am telling you this as a friend. You are an modeloholic. You need to get help....
What defines an uptick? The market red? The price at the bid? It is sound advice, I am just curious what your definition is. Allow myself to be wrong? My model spews out a number. The difference between it and SPX is either in a range or it isn't. If it is, I stay neutral. If it isn't, I act. There is no room for "allowing" anything. As soon as I introduce what you are suggesting, unless I misunderstand your intent, I have introduced subjectivity into my methods. Now, it is certainly possible to say, _subjectively_, well, this model has run off the rails, and "allow myself to be wrong". Of course I do that! Where I think you and I disagree is whether it is possible at all or not, or even if it is, in the approach I am taking to automated systems. I do not disagree with that, but that is a whole another huge subject. Further, with each iteration of fixing the model when it goes off course, the length that the model stays on course is longer and longer, perhaps a sign that I capture more and more dynamics each time! What is funny is, the model has been collecting small wins for months, and then it blows most of it on one trade (although still up decent even after Friday and today, but that it can go so wrong is what bothers me). It feels an awful lot like selling naked options... On the other hand, one great thing about it is, I _KNOW_ instantly when it has run off the rails. That is extremely valuable. What I don't understand is why it works for months, and then something unknown to me makes it stop work...In this case, I know exactly what changed, but I don't know why the market isn't keying off it...
I think part of the problem is that I assume people have a scientific background, and therefore things like "model" and what we mean by it require no exposition. From dictionary.com mod·el    [mod-l] Show IPA noun, adjective, verb, -eled, -el·ing or ( especially British ) -elled, -el·ling. ânoun 1. a standard or example for imitation or comparison. 2 .a representation, generally in miniature, to show the construction or appearance of something. 3. an image in clay, wax, or the like, to be reproduced in more durable material. 4. a person or thing that serves as a subject for an artist, sculptor, writer, etc. 5. a person whose profession is posing for artists or photographers. 6. a person employed to wear clothing or pose with a product for purposes of display and advertising. 7. a style or design of a particular product: His car is last year's model. 8. a pattern or mode of structure or formation. 9. a typical form or style. 10. a simplified representation of a system or phenomenon, as in the sciences or economics, with any hypotheses required to describe the system or explain the phenomenon, often mathematically. Obviously I mean 1,2,9, and 10. It is a simplification by definition! Therefore, of course it could be wrong, by definition. The goal of a model isn't to say, this _IS_ the market, or this _IS_ the way the proton works, it is to say, this is the way the proton works to some degree of accuracy, under some simplified assumptions. The model is often useful, even if it is wrong in many instances. Take Newtonian physics for example! As soon as a counter example to your predictions occur, you have to go back and rethink your theory. This is all elementary science, and the way by which all knowledge progresses, at least by the scientific method!
Nitro, the model is beating you over the head and you are telling me it's doing that because it loves you. LOL. Seriously, you are a smart guy. You are smarter then I am OK. But the fact that you are not willing to accept that the problem may be "you" as "you" are the one that gives the model life. The model only exists because of you. And just like God, you can take it's life away. The model can only spit out what you put into it. All I'm saying here is you model is serving it's purpose. The bigger question is, are you?