All System fail sooner or later , you rely on trader's skills.The answer has more to do with trader's stress management, nothing to do with systems.
Demo trading or simulator trading should only be used to test a potential new broker platform prior to opening a trading account with them, learn your broker trade execution platform after opening a trading account with them and/or briefly test run a new completed trade method with a completed trading plan. Thus, demo trading or simulator trading is not good to use while still "developing" a trade method because that's what backtesting is designed for. Simply, as soon as you have completed developing your trade method and completed developing your trading plan...it's time to go to real money trading with a small amount of capital until you've determined you're ready to trade with your full available trading capital. Note - Trade method and trading plan are different. A trade method is a component of a trading plan. In fact, there's a common problem many traders make on demo/simulator is that they use it while still "developing" a trade method or use it when they have a completed trade method while not having a completed trading plan...doing such creates discipline problems along with not properly preparing a trader to handle the stress of trading with real money. Also, it will teach a trader that its OK to trade when your trade method or trading plan is not ready...one of the worst poor trading habits to learn and just as difficult to unlearn. Just the same, if you have problems with your trade method or trading plan while trading with real money...stop trading and go back to the backtesting phase and do not go back to the demo/simulator phase unless you think your trading problems are related to not being able to adequately use your broker trade execution platform. Therefore, the only way you can learn how to deal with the stress of trading is via real money trading and not via demo/simulator trading nor via posting real-time signal calls at a discussion forum. Mark
Technical trading skills and emotions associated with trading activity are two different problems. Skills are to be developed first, then, as I said, one should start slowly trading real money, using the smallest size available for a given instrument, to learn to deal with emotions and other nuances of real trading. Nothing should be done in a shocking way. It would make a lot of emotional (and likely financial) damage instead of positive result.
I am far from thinking that all systems fail. Trading method is a skill-set of a trader, the longer you practice it, the better it works for you. And successful trading is far not just the stress management. How should one be called, who does not feel any stress while obviously trading badly, consistently losing money? Did I hear the word "idiot"?
There are three classifications system, method or discretionary trading.A system has set of rules, write them code it and back test it.sooner or later the results will show a failure of the system , unless the system is made up of 50+ sub systems.
Well, my style is not purely mechanical, so from my point of view and experience, the more you practice your method, the better it "works" (in reality you just trade better). I agree, that some mechanical systems, especially those based on correlations and stuff like that tend to stop having an edge eventually, because world changes and markets change. That's what I like about semi-discretionary approach. It evolves with you and with the whole world, not being based on some rigid rules, which are only applicable to certain conditions.