stategy research feedback

Discussion in 'Strategy Development' started by sped1111, Oct 13, 2002.

  1. sped1111

    sped1111

    Hello all
    I have been a member of this site for a few months, and yes I am a newbie and aspiring trader. This is my first post and it is in regards to a search for information about a strategy. I have gotten bits and pieces of systems from this site but would like your comment on sites such as www.futures7.com that sell systems. I understand that it would be wrong to ask for a system but thought having one from a site like this as a sample or a point of reference would be a good start. I have researched all the components of a system such as the moving averages, indicators, indexes but would like some guidance regarding putting them together even if it is a basic starting point.
    I have a good understanding of the other aspects of what makes a good trader such as not being undercapitalized, pro's and con's of pro firms and going it alone. Of course the need for a good internet connection and excellent equipment. And as of late it seems to me a good mentor is essential in avoiding time and money being wasted.
    Please don't think I'm asking for secrets to be told, simply point me in the right direction. Thanks in advance for your feedback.
     
  2. I would recommend you get some backtesting s/w and experiment with various approaches. There are many systems detailed at www.wealthlab.com. The biggest expense is not buying a system, it is the money you can lose trading it. It is pretty easy to curve-fit a system so that it produces great past results but invariably they will blow up in real time trading. You might also check out www.futurestruth.com. They've been around a long time and have a pretty good reputation for system testing.
     
  3. sped,

    A lot of what you are asking about putting stuff together depends on what time frame you are trading and also what markets. I did some testing several years ago and found that it is very hard to make money with indicator-based systems, even though they look great on the charts. Most of the time-tested futures trading systems are trend following systems that are applied to a portfolio of commodities. You get about a 35% win ratio, a 40% drawdown but if you're lucky you catch a couple fo big moves a year and make moeny. Moving average crossover systems, channel break systems and volatility breakout systems are typical examples. If you are a beginner, you need to pay close attention to which markets you trade. The stock market has traditionally not been a good market for this type of system, although the last few years have been ok because of the big moves. I think the eurodollar market is a good one to trade with a trend following system, also the currencies but watch out for the big overnight moves.
     
  4. sped1111

    sped1111

    aainthebeltway..... Thanks for your reply, your input is greatly appreciated. I checked out the websites that you mentioned and find them both to be a wealth of information. To clarify my intent. I would like to start out with trading emini futures and or s&p minis mainly for the lower capital required to start out. I fully accept and realize I will lose money. Trading is inherently risky and nothing is a sure thing. I am more than willing to invest a great deal of time researching and spending time on trading simulators before committing to trading my own money. I'd like to hold on to contracts for a short duration. Never holding overnight. At least not at first. I have traded stocks in the past but don't feel they have the same advantages as eminis do for a novice "day trader". I like the fact that eminis can be traded almost 24 hours although the best time to trade is during the day. I have explored the possibility of working nights at my job, I do have that option.
    In the past couple of days I have found a few sites such as ck futures that give a few systems and information for a foundation for a self made one. Thanks again for your reply and I look further to exchanging further ideas.
     
  5. sped,

    well, I was afraid daytrading the e-mini's was what you wanted to do. Very few daytrade systems have proved out over time. The ones that have typically don't trade that much, certainly not several times a day or even every day. I suggested the eurodollars because the margin is very low and they have nice trend runs.

    There are a couple of threads in the journal section here by guys who daytrade the e-mini's. I'm not a big fan of their methods, but Quah is making money. I would also suggest reading everything OldTrader has written here.
     
  6. OldTrader is as discretionary as a fortune teller.
     
  7. sped1111

    sped1111

    aaainthebeltway:, you would suggest eurodollars, sounds good to me, I'm totally open to suggestions and input from someone such as yourself. Keep in mind most of my assumptions have been the result of fragmented bits of information. So if you say eurodollars, by all means I'll check it out. Just to clarify, what vehicle would you suggest to invest in eurodollars, forex currency trading, a futures contract for currency. What were you thinking, I've been looking at FXstreet.com and a few others I have been looking at alot of different aspects of trading. I will talk to the fellow you suggested just to see what he has to say about futures.
     
  8. Mir

    Mir

    Sped, I would sugegst you study the www.traderclub.com website: good knowledge, conversation, video tapes, systems for sale, and a very knowledgeable owner/leader Chuck LeBeau. I hope this helps and good luck :)
     
  9. OldTrader is discretionary but his posts are a wealth of information on how to understnad and analyze the markets. I think any good system has to try to exploit observable aspects of the market. You have to understnad how the markets operate, how different participants operate, to understand if a system is reasonable or not.