Simplicity Rules!!

Discussion in 'Index Futures' started by wally_, Dec 9, 2002.

  1. Today the world simplest mechanical trading ES system scored 19 pts with one trade only!

    I know that I sound bombastic, but on the other hand the system is so simple that I am most likely correct. The system boils down to two rules, one of them being auxiliary and being applied very infrequently (this rule prevents trading tomorrow, for instance). The main rule is just a simple application of one basic arithmetical operation.

    I am a theoretical physicist by training. The goal of theoretical physics has always been to create one unified theory that could explain all known physical phenomena. Such a theory has not been created yet, but it is believed that the string theory is the best candidate for it. The string theory is simple in principle (that's what simplicity is all about, about simple underlying principles), but its math is incredibly complex.

    My system is very simple in principle and its math is amusingly simple. It is very easy to handle, particularly timewise. You will not get rich overnight using it, but you will not spend a lot of your time with it either.

    The system would make you about $13,000 per contract this year trading only several times a month, so if you want to get mega-rich this is probably not for you, but if you want to strike some balance between trading and still having life, this might be a good system for you. You would have needed about $5,000 per contract to safely withstand the worst drawndown this year which was less than $2,000, but for safety reasons $5,000 is what you should have to be able to trade this system without stress.

    I am considering making a limited number of copies of this system available to the public if only because I would like people to see how simple trading can be. It is not really about "keeping it simple", it's rather about making it simple because once you made it simple you don't have to worry about keeping it simple. It will remain simple.

    I will tell you more about this system and other things related to it on my webpage in some time. Please do not PM me about it.

  2. My System only requires $2100 per contract. It would have made you $72,647 per contract already this year. It trades 2 to 4 times a week. The signal is obtained by reading just 2 figures each day in the Wall Street Journal.

    I'm thinking about making this system available to just a few close friends or people that I like.

    Please don't pm me.

    Hope this helps
  3. DblArrow


    But wait, thats not all if you order NOW, we will through in this set of Ginsu steak knives absolutely FREE! What the heck we know you didn't ask, but, it comes complete with your own KITCHEN SINK!

    (This will not help with your trading but it comes in handy for that crow.)

    Make 'em pretty, Chris
  4. DblArrow


    Golly, and I just gave all the information to my simple sytem!

    Can I retract all that information then charge a nice big fee of say $29.95? (No steak knives)

    Make 'em pretty, Chris
  5. Well, Wally, you've sure piqued my interest. In my own trading, I have done a lengthy evaluation of my trading methods and came to the conclusion that I was inadvertently making my trading too complex with layer upon layer of indicators combined with several entry setups which often contradicted each other. What I have done, through a process of failure analysis, is to strip away the indicators one-by-one. And what I found was that most of them did not add any value to my analysis. In fact, I discovered a detrimental effect that was caused by there simply being too many indicators to consider. I then started from scratch, basing my new system on a very, very simple approach that I had worked on previously when I was trading the SPDRs. I've now distilled this approach down to a single indicator with a single filter. I have manually backtested this system over the last 20 trading days and I am impressed with the results. I am still in the process of performing a computerized backtest on it over several years of data (still learning how to use Wealth-Lab).

    As for myself, I studied both psychology and astrophysics in college.

    Perhaps the most famous equation of all time, Einstein's E=mc², is astonishingly simple. Yet, its implication that mass IS energy and that energy IS mass shocked many people of Einstein's day, and it ultimately changed physicists' view of the entire universe.

    "It followed from the special theory of relativity that mass and energy are both but different manifestations of the same thing -- a somewhat unfamiliar conception for the average mind. Furthermore, the equation E is equal to m c-squared, in which energy is put equal to mass, multiplied by the square of the velocity of light, showed that very small amounts of mass may be converted into a very large amount of energy and vice versa. The mass and energy were in fact equivalent, according to the formula mentioned before."

    - Albert Einstein
  6. As I put it already don't mix complexity and complication :)

    If something is intrinsiquely complex, like human being or stock market, you can't reduce this complexity, you can just try to adjust a point of view so as to reduce the variable numbers necessary to a GOAL (for example trading): this minimum number of variables depends on the capability of the system. This is a constraint. If the system is not capable of meeting your goal, then you will tend to add more and more variables to try to adjust and that makes thing more complicated. Complication is unecessary coats over the inherent complexity of a system. Yes trading can be made simple. But it will depends on goals. Most system will need enough capital which is over the capacity of many people : they can't bear the drawdown which is irreductible to a system they bought and they cut because they were told to cut their losses soon but it is a stupid thing to do if is out of the system capability. I think many try to add more and more variables trying to reduce the drawdowns.

    >Well, Wally, you've sure piqued my interest. In my own trading, I have done a lengthy evaluation of my trading methods and came to the conclusion that I was inadvertently making my trading too complex with layer upon layer of indicators combined with several entry setup
  7. See famous Larry William site, I thing he is saying something like that also.

  8. I come to this thread to make a public apology to my cat, Arlo.

    I was sitting at my desk here this morning, trading as usual, and I got this strong whiff of shit. Well, there are only 2 creatures in my apartment at that time of the day. So, after having pulled down my pants to check that I hadn't let one slip, I got hold of my cat by the tail. Suffice to say, my office doesn't have enough room to swing a cat.

    I then decided to surf the ET site and came upon this thread. This was where the smell was coming from, not from my poor (now in traction) cat. Thankfully my trading this morning was sufficient to pay for the vets bill.

    The lesson I've learned from all of this is: If there is a smell of shit, check to see if there is a wally in the building before blaming someone/something else.
  9. Ditch


    Seems like other people are smelling it too:p
  10. From day one...
    #10     Dec 10, 2002