Thread: Trading Myths

Originally Posted by ;

this is a fantastic topic to discussion

here is my take...

quant systems... there is NO universal system. On the other hand, the more universal the better, the system. Its always a good sign to find that a system work on the USD/JPY and the EUR/USD, as the pairs have quite different characteristics so the system must be strong to be profitable in the two. It'd be better to find out the system work on a very different market like oil. With this said, almost all of my own systems are benefiting from market inefficiencies that only exist in a specific location. Therefore, quite few universal-type systems are traded by me. In trading I feel its more profitable to have a tight focus.

Discretionary trading... YES, you will find universal egies that work. Because I have pointed out many times, I usually exchange the human element of this market (ie reading the order flow and imagining what the major players are thinking/doing). I use the same doctrine that is precise in the stock market, currencies, oil, bonds, you name it. And it works everywhere, in each timeframe from 5mins to 5years, since the human element is still the same. While I dont believe in universal systems, I certainly think there are universal egies and strategies that are profitable in every market in every timeframe.

SOOOOOO TRUE

Fantastic Article Merlin

Originally Posted by ;

.. .the human part of this market...

Yep that is why machines won't ever outdo humans in the long run... besides... machines are just as good as the guy who left them (they are not perfect either). Lucky for us it is a lot simpler to adapt to current conditions and future conditions. All markets change every couple of years in some way or another and we can adapt without having to scrap months or years worth of testing and coding.

Originally Posted by ;

besides... machines are just as good as the guy who made them

exactly!!!! Im fond of stating that decisions go into building a system than goes into a year of trading.

I dont know about you guys, but when I build a method there are hundreds and hundreds of little decisions involved. Systems trading IS discretionary!

Originally Posted by ;

Yep that's why machines will never outdo humans in the long run... besides... machines are just as good as the guy who made them

There's been genetic software evolution algorithms for years. They adapt and learn. By placing them into games in which you get monsters that learn the things you reveal them A number of these algorithm have been showcased teach them. Including language e.g., albeit this is in it's infancy. It's no small wonder that they also attempted to check whether they might teach those calculations how to fly a combat jet in their...(I believe it was they could, only the landing piece was a bit complied for em Then again I don't think that's gonna disturb many. .) Btw FF is broken for me personally. 404s, fully broken formatting, etc.. .

Originally Posted by ;

this is a great topic to debate

here's my take...

quant systems... that there is NO universal system. On the other hand, the more universal the better, the machine. Its always a fantastic sign to find a system work on the EUR/USD along with also the USD/JPY, as the pairs have very different attributes has to be robust to become more profitable in both. It would be better to find out the machine work on a different market like crude oil. With this said, most of my systems are benefiting from market inefficiencies that exist in a really specific place. Therefore, few systems that are universal-type are traded by me. In trading I believe its more profitable to have a tight attention.

Discretionary trading... YES, you will find universal egies that work. Because I have pointed out many times, I usually exchange the individual element of this market (ie reading the order flow and guessing what the major players are thinking/doing). I utilize the exact doctrine in the stock market, currencies, oil, bonds, and you name it. Also it works everywhere, in every timeframe from 5mins to 5years, since the human element is still the same everywhere. While I believe in universal systems, I certainly believe there are universal egies and approaches that are profitable in every market in every timeframe.

My experience with quant systems (and I loosely use the term quant because it normally applies to alternative pricing etc; I should probably say algorithm here) is that in case you want it to work reasonably well over something such as the EUR/USD along with also the USD/JPY (if I am taking this strategy its likely linked to portfolio dimensions ) then I would build the system around a USD Index where one trigger in the machine could be spread across the underlying pairs. This creates the model scalable and helps protect the trading process itself; you may also be a bit more covert with the place building as well.

Another thing I've discovered and have found support for in other folks work is; you have to always update the quant model. Randomizing a dataset once and then using the forecast going forward for a protracted period does not appear to work in addition to regressing (curve fitting) out of a sequential pair of information and upgrading the algorithm every quarter. That's my experience at least... I sadly really do not know the math behind the process and can't get a handle on the why. It has something to do with the curve fitting process and longer term price action momentum, but that is only speculation on my part.

Originally Posted by ;

this is a great topic to discussion

here's my take...

quant systems... there is NO universal system. However, the more universal the system. Its always a good sign to see a system work on the EUR/USD and also the USD/JPY, as the pairs have different attributes so the system has to be robust to be profitable in both. It would be better to see the system work on a market like crude oil. With this said, almost all of my systems are taking advantage of market inefficiencies that exist in a specific location. Therefore, very few systems that are universal-type are traded by me. In quant trading I feel its more profitable to have a focus that is tight.

Optional trading... YES, you will find universal egies that work. Because I have pointed out many times, I typically exchange the human element of the market (ie studying the order flow and guessing what the major players are thinking/doing). I utilize the identical doctrine in the stock market, currencies, oil, bonds, you name it. And it works in every time from 5mins to 5years, since the human element is still the exact same everywhere. While I dont believe in systems, I certainly believe there are worldwide egies and strategies that are profitable in every market in every timeframe.

Well said Merlin.

Base on the survey, up to now, there are 24 people who think in a Universal System. I just wish to clarify that there's a major gap between analyzing the market and a trading system.

Allow me to give you an instance. If you a visit a Top formation you might conclude that the price will fall soon. This is analysis. You may even say the area of the price fall.

But a trading system based on double-top is beyond the analysis. This system answers these questions:

* Recognition of this patter
* Stage of entrance
* Profit target
* Stop Reduction
* How many lots to Buy
* Money management configurations (for instance when to secure the profit)

This is an illustration. In fact the trading systems can vary and their components can be a lot different from each other.

The bottom line is a trading system is beyond analysis of this market. Your trading system can enter the market in the wrong direction of the price movement but make money. It follows your analysis was wrong but the system worked.

With this definition in mind I feel that the odds you locate a Universal System is slim to zero. You may locate a process of analysis which works for different time frames, currency pairs, or perhaps distinct markets but the odds that you find a system which can exchange any time period plus any currency pair is zero. I do accept - as mentioned - by a few of you that there are systems which are more flexible and less independent on time frame or the currency pair but in my humble opinion the notion of Universal System or whatever you call it's more of marketing character than truth.

[quote;1714126]For this and in reply to pretty much all...

So yes, embracing this view there is a universal strategy, should you see a trader for a platform (this IS a workable outlook, as imho you must actually do so if you've got several under management - every used trader over time becomes a system having an expectancy and risk modalities and so forth. .) As I expect he is going to have the ability to get it done on any market which has ticks and bars

SL,
Being a Discretionary Trader...I agree with your Statement. The trader, trading the Individual element (see Merlin Post ) having an unbiased slant, although informed of over all Market sentiment....which can change like the weather some days, leaves discetionary trading to become, in consequence, the system....and the system being the trader's ability to adapt to shing sentiment.
Please give the benefit I am less of a writer of ideas as I am Trader of these charts.
Fxj

Originally Posted by ;

There's been genetic applications development algorithms for years. They learn and adapt. A number of the algorithm are showcased by putting them into games where you get monsters that actually learn the things you show them teach them. Including language e.g., albeit this is all in it's infancy. It is no small wonder that they also attempted to see whether they could teach those calculations how to fly a combat jet in their...(I feel it turned out they could, only the landing piece was somewhat complied for em Then again I do not think that's gonna bother many. .) Btw FF is broken for me personally. 404s, totally broken formatting, etc.. .

Well.... Let us put it this way... would you rather have your own life rely on another individual or a machine? I'd rather have another individual...