Say you found a technical system that worked v.scalability

Discussion in 'Technical Analysis' started by IronFist, May 9, 2007.

  1. Generally speaking, should a system that works based on a chart with candles of x length of time, should it also work on chart with candles of y length of time?

    So if you have a system that works on 2 minute candles, should that same system also work on 5 minute candles, 60 minute candles, 1 day candles, etc. obviously adjusting your holding period accordingly (so your trades off of 2 minute candles would be held for a shorter period of time than trades off of 1 day candles)?
  2. maxpi


    I have one that barely works at all if the bar interval is changed too much.

    Why impose an intellectually derived extra burden on a system?
  3. Because I think someone said that a system should work on all timeframes.

    That being said, I have one that works decently on 3 min candle charts. On 2 and 5 min candle charts it starts to do poorly. I just tried applying it to 30 min, 60 min, and 1 day charts, and it failed miserably.

    So I was wondering if it's junk and I should start over because of this.

    edit - I was also wondering about this from the perspective of how easily day traders could change to swing traders and vice versa.
  4. maxpi


    It's your system, you can do what you want to with it I suppose. My criteria for a system is in the equity curve.

    I have tested things with tradestation by generating the bars in arrays. That way I can vary the bar interval as an optimized parameter. Those tests did not reveal much that I could not have found by manually changing the bar interval and were a horrendous pain to get working.

    It might be a good thing to work towards a system that was useful more generally over bar interval, that work might teach you something.

    I've found that trading a system with real money makes a difference in the speed of system development. I'm not trying to be funny here either. When I worked as a technician I built eletronic items for engineers. I noticed that many of them would not be sure of what they wanted until I gave them the item constructed as per their request. It just always worked out that as soon as they saw the item they would request some feature they omitted or had not thought of. It was not incompetence for the most part, it was something about human nature, seeing the item in 3D versus drawing it was a completely different thing. I'm finding something similar in the system development, if I fire up the software and have the order bar ready to go and place a few trades the system development leaps ahead by light years sometimes.
  5. False.
  6. ER9


    in my experience not at all and it can be very dangerous to assume they will . for example cci can work very well when combined with other information trading cetain 5 minute futures but when dropping to faster time frames like 1 or 2 minute.....what worked in 5 minute will wipe out your account on a 1 minute chart. and to complicate it even more that same information/technique will make you a poor man trading forex, hsi or even stocks etc..... so not even might in not transcend time frames, certain information/indicators may be hand tailored for certain markets.

    sorry i know thats a bit more than generally speaking but after 2 cups of starbucks coffee im a typing madman on the pc.
  7. ^ Thanks.