According to their website, everyone does it wrong, they're the only ones that are right and they can sell you the software for few grand, so you can be right too. PriceActionLab is a definition of curve fitting, it's surprising that such blatant advertising on ET goes unbanned.
It has a one-click OOS test, something that is very honest and straightforward. Some other programs I tried in the past may be using the OOS to improve IS results. I was attracted to this approach because it is outright honest. You can hide the OOS from the search and then apply it afterwards.
I think you have it wrong as far as curve-fitting. Price action cannot be curve-fitted because it is already the curve. It can be biased, I agree, but not curve-fitted. You must review your understanding of curve-fitting. I had the same misconception as you before. I had to go to my local college and talk to a math professor. Reality cannot be fitted to reality, this does not make sense. If you realize that you will start making money and be relieved from the various frustrations that cause you to declare posts discussing approaches to trading as blatant advertising, especially when they contain no links and such.
This is interesting, as I just described a test with another software for finding price patterns - you can read about it here - http://www.elitetrader.com/vb/showthread.php?s=&threadid=239403 - and the test results strongly suggest that single 3-bar price patterns, such as generated by PAL, have no predictive value. They appear highly profitable with in-sample data, of course, but that's classical curve-fitting. They fail in OOS tests. As you seem to have experience with Price Action Lab, maybe you can comment on that test, and on the difference of the test results and the claims by PAL? Surely there must be an explanation of the discrepancy?
The money has become too efficient with these algorithms to leave any scraps for little guys.It is time money wasted to invest any more. None of these outfits ramped up are worth bothering with ,out of their 100 strategies , the net effect is loss after spread and paying commissions to these scammers.
I got 44 automated systems that worked in history ,I don't use them because they don't carry a guarantee of future performance. The profitability has gone down due to the uncertainties of this financial crisis. If the o/h/l/c scenario changed from extreme volatility to low volatility market conditions and noise volatility increased , with more of false market moves than profitable moves , would the systems be profitable?No.
+1 Right on the money there Alexander, but don't forget the big firm's execution algos. There's a bit if quant work there if you want to be moving big blocks quietly.
Smarter isn't the correct word , experienced is more appropriate , or able to read context correctly.