Odds Maker

Discussion in 'Strategy Development' started by jtTrader, Feb 24, 2007.

  1. jtTrader


    I have been trading with odds maker (The Trade Ideas add-on) for a couple of weeks and I have been pretty happy with it, though two weeks isn't really that much of a test. But, the systems have exceeded the backtested performance so far.

    I'm not anyway connected with them and this post is just my comments.

    Any one else using it?

    I have about 12 years of experience coding systems in Trade Station, and while I think it is the best product for coding systems, I think you end up spending too much time developing systems and not enough on trading. I think it is easy to get hung up on indicators and such. Trading is really much simplier than we make it. Its just price/volume/momentum/direction and their isn't a magic oscillator. I have been a software developer since around 1977 with coding experience in many languages. I'm old enough to remember arguing whether DOS or CP/M was better and if it was worth it to buy the Microsoft C compiler or stick with Borland's Pascal, so I have written a few lines of code. If these references confuse you, I was a geek when it meant something.

    With Trade Ideas/Odds Maker, you build systems out of their own building blocks, so you are forced to use simple concepts like breakouts, retracements, etc. I think this prevents curve fitting, and these systems can usually be developed in a couple of hours at the most. With tradestation I would spend months refining and testing a system.

    In order to use odds maker, you have to have a fundamental understanding of trading strategies that work, or work under certain conditions. Without this, its not a crutch. Someone who has a solid understanding of this but lacks coding experience would have no problem using it.

    What I do is test a simple concept without stops and see if it is more than 50% successful with at least a 1.5 to 1 return. You will get so many trade triggers it will not be tradeable. Then I start adding filters weeding out trades and pushing it up to around 60 - 70%, and getting the return to 2.5 to 3 to 1, with stops. The filters have to be reasonable, like RSI below 50, etc. (Meaning they have to make sense for the system).

    I have about 7 different systems, but I get only about 4 - 8 trades a day which is what I want. Most exit with a profit stop, or are in for 45 mins to 2 hours at the most. They all have $400 dollar stop loss exits on 2000 shares or 20 cents. I exit all postions 60 mins before market close, and take no positions until after 60 mins of market open. I find this time too noisy and random and too fast if you are on the wrong side.

    My focus is completely on trade/money management. Myself, I like it, but I guess time will tell. I use a PPO histogram as an exit, and usually exit before the profit exit is hit, or the stop loss is hit, which is why the real numbers are better than the tested numbers. (You can't code these types of exits with Odds maker).

    I run the systems every morning and monitor whether they are improving or not. I usually find trades that I don't want and look at what would filter them. If it's a reasonable filter (Like increasing the volatility) I add it, otherwise, I don't.

    I won't disclose my trading strategies, so I apologize in advance.

    I'm more looking to see if there are other users out there and their experiences (I assume some have more mileage on this than I do).

    As the market changes character, have you been able to keep adapting Odds maker to it, or am I just lucky and don't know it yet?

    Thanks ...