Should I buy a trading system?

Discussion in 'Strategy Development' started by bigboy, Aug 22, 2002.

  1. bigboy

    bigboy

    I just started to trade futures, should I buy one of the trading systems recommended by Futures Truth? Are the results really as good as they look tested by Futures Truth?
    Thx.
     
  2. bigboy

    bigboy

    Are there anybody here bought some trading systems and what are the results?
    Thx again...
     
  3. vikana

    vikana Moderator

    I haven't bought any systems, but e.g. RBreaker has been rated highly for S&P for at least 5 years.

    systems like aberation, are not worth it if you take rollover into account
     
  4. rcreal

    rcreal

  5. No.
     
  6. Most people who buy systems seem to end up dissatisfied. There used to be a group called Club 3000 which was largely composed of people who tried to use systems and thought they had gotten rooked. They called it that because all the systems seemed to cost $3k.

    My advice would be to get the actual historical trade runs for some systems and follow them day by day and ask yourself (1) would you have really put the trade on and (2) would you be able to stand the drawdown? Most people who try to trade systems fail because of these two issues. All that backtesting is useless if you decide to skip trades because the system has dealt 10 straight losers, etc.

    A 40% drawdown sounds easy enough on paper. When you start thinking you could have bought a new Viper with the money, it is another matter.

    Rather than just buy a system, think about these options. One, there are plenty of brokers who will trade a system for you. I don't know if you have to buy the system, but at least it removes the discipline issue. Two, put together a simple system yourself and trade it, on paper if necessary. Most of the more robust systems use simple logic, that is why they are robust. Example, buy 30 day new high, trail stop at 3 day low, etc.