Can't say I have noticed that, no. I've seen systems that work well and then blow up in high volatility environments, ditto for discretionary traders. If your approach is critically dependent on what's happening with volatility, then you need either a way to forecast future volatility to some extent, or you need multiple approaches that are inversely correlated to each other with respect to volatility (i.e. one that does well in high/rising vol, and one that does well in low/falling vol) to smooth things out. Better still, find a method that is not correlated with volatility.
+1 "respect to volatility (i.e. one that does well in high/rising vol, and one that does well in low/falling vol) to smooth things out. Better still, find a method that is not correlated with volatility." hard to find though! I have the higher Volatility model, now I need o build a trend or lower vol model.... Thanks
it came from a reliable source from a respected person with a proven track record...among other people. so no it wasn't some ridiculous statement made by a condescending hack...but thanks for the extreme analogies you used to express your views. i'm surprised hitler wasn't in there somewhere.
Personally I would. I don't see how people over-leverage in such spectacular fashion and blow up. But it happens all the time. Some people must be predisposed to gambling in a huge way.
It is a problem with doing anything as an individual. If you do not have a community to critique your actions and ideas, you are most probably going to make the same mistakes other people have made. ET, unfortunately, can not be considered a true community - too many people here are either leeches or testosterone-intoxicated egomaniacs. And the fear of "you gonna steal my lunch" usually overshadows the fact that most of the ideas to be shared are common sense. I wish someone would create a smallish, selective trading community online - the ability to bounce ideas off each other and to leverage on other peoples skills/knowledge (e.g. one person is a discretionary oil trader, another is a stat arb trader) would make a place like that invaluable.
I agree LinkedIn I found useless, lot of garbage. I would be interesting in getting this started. Would it be free? Would it be anonymous? How can you really stop the dumb behavior rants? âSelectiveâ meaning only a couple topics or threads?
It seems you swing trade (you mentioned 10 trades / month), and you didn't mention what you trade (at least I didn't find it). Obviously your tested method is curve fitted to certain types of markets. You have to determine what are the type of markets in which your method doesn't work, and then a way to anticipate them. Look at a chart to see how June and December are alike, then look back of the four years you back tested and check similar periods' results. If you correctly identified the commonality that makes your method fail, you'll find that it performed poorly in other similar periods. They may be points where, on a higher time frame, the market turns in a specific way, e.g. before resuming the dominant trend. The market is currently in an uncharted territory if you're looking only to the last 20 -30 years. Nothing works reliably based only on statistics. You have to vet it thoroughly.
You're being academic as if this is philosophy 101 but I'm being practical. As I said....the past is not indicative of the future when it comes to trading. All trading systems ultimately fail....ALL Whether you have ever traded successfully will dictate your response.
+++ The market changes with respect to your system's performance because speculators, seeking the same as you, keep changing their own strategies when they wear out. Their behavior makes up much of the market's behavior. Take comfort in the Japanese manufacturing model of continuous improvement. If you continually look for incremental benefits and branch out with variety, you stand a chance of being where no one else is, before they realize they want to take your position, via your cash register.............