Trading systems

Discussion in 'Educational Resources' started by MJ_Trader, Jul 19, 2005.

  1. MJ_Trader


    Hello all. I've been researching trading systems through to determine whether trading systems you can buy, actually work. Is there anyone out there who has purchased a system and has consistently made money over time..? If the answer is yes, don't feel like you have to mention the system, I understand. Any input will be appreciated.

  2. They haven't updated their page since May??

    BTW, are they a paid sponsor here?
  3. MJ_Trader



    Can you elaborate on 'paid sponser'.. Paid by whom..?
  4. I've bought several vendor systems that are tracked by futurestruth. I've also done my own historical backtests to see whether or not I agree with FT's published backtest results. Consistently the answer has been "Yes, but". Yes, my backtests match FT's when I use their testing methodology. But I think some aspects of their test methods are awful.

    For one, they test with single contract position sizing. All markets have the same position size: one lots. This is ridiculous, the risk of a 1-lot of CME Euro Currency futures is 6.5 times greater than the risk of a 1-lot of Corn futures. If you've got the money to trade a 1-lot of Euro Currency, you've also got the money to trade a 6-lot of Corn. Does FT test this way? Nooooooo. Then when the account value doubles, triples, or quadruples, does FT increase their position size? Nooooo, they stick with one-lots for 15 solid years. Real traders with real profits would ratchet the betsize up, probably using "Fixed Fractional" arithmetic to determine the position size as a function of account value.

    For another, FT tests with incredibly small portfolios: usually 4 to 7 markets. But if you're going to trade the exact same system on more than one market, you're going to go for the free lunch called DIVERSIFICATION and you'll trade 12-36 markets. Not a half dozen.

    There are more issues but those give you a flavor. I'd suggest that you can probably use FT as a filter to decide which systems NOT TO trade. If they consistently lose money in FT, you can safely ignore them. But choosing which system(s) you WILL risk your money upon is such an individual, specific decision, depending on so many details about you and your available capital and your tolerance for risk, that you'll have to do the tests and make the decisions yourself. No magazine, no website, no stranger on a PHP chat system, can possibly know all the details of your individual needs and your risk psychology and your financial situation. So you can't trust them to suggest what's best for YOU. You'll have to do that yourself.
  5. MJ_Trader


    Thanks horribilicus for your insight. That was very helpful.

  6. Prevail

    Prevail Guest

    Coin Collector looks like it may be promising. Should be fairly easy to reverse engineer but slippage may be a hurdle for it.