Is there 1 Strategy that just works?
Author: garron
Creation Date: 2/2/2009 1:04 PM
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garron

#1
i have to ask this question.
Is there a strategy that just works....Budda-Bing?
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DrKoch

#2
I have to answer this question: Yes.
In fact, many.
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garron

#3
Hey Doc, encouraging news to know there's strategies that work, but a daily winner??
What should i test out so i can get my daily winning buzz.
I dont care how small the win is, as long as it's a win- everyday.
thanx
g.
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Eugene

#4
QUOTE:
Is there a strategy that just works....Budda-Bing?

Yes. The $64,000 question is: how long.
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Cone

#5
QUOTE:
as long as it's a win- everyday
You'll need to talk to Bernie Madoff for details about that strategy.

garron, you're not being realistic.
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garron

#6
Nice one Eugene, now that crakt me up...lol.
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LennyNY

#7
I apologize in advance if I'm stating the obvious below -- I mean no one any disrespect -- but your question gives me the feeling that you've had limited experience with trading, or at least with software that programs trading strategies. Also, a couple of your statements get me concerned that you may be poised to lose a lot of money. If I've misread you, by all means feel free to skip the rest of this post.

In general, the aspect that makes WealthLab, & for that matter any other trading software, valuable is the ability to backtest. The reason it's necessary to backtest is because there are far too many variables for any strategy to work all the time, on any stock under all market conditions & any trading style, i.e., position size, money management, exposure, etc. We backtest to see how a strategy will perform over a period of time with different market conditions (see Eugene's response above) & trading parameters. For instance, I've seen some strategies that work great with a lot of capital & large positions like 1000 shares, but perform miserably with positions of 100 shares. It's not necessarily advisable to trade every single day no matter what -- if you don't see the right setup, some days it's best to sit it out. Sometimes the trick to winning is in the trades you don't take; on the other hand, if you try to screen out every condition that ever causes a loss, you can write a strategy that won't lose any money -- because it'll never make any trades.

The best you can hope for is a method that gives you at least one of two performance metrics: (1) percentage of winning trades over 50%; (2) average gain amount larger than average loss amount. A strategy can make money over time with just one of these being true, but if you have more losing trades than winning trades, your average gain per trade is going to have to be significantly larger than your average loss; the larger the ratio of losers to winners, the larger ratio of average gain to average loss you'll need to balance it out. If your average per trade loss is greater than your average per trade gain, you'll need to have significantly more winners than losers. While I've seen strong performances from strategies, some of which were described & presumably used by acclaimed "experts" (no, I can't cite any right now -- you'll just have to take my word for it -- or not), that have only one of these metrics, I generally raise my eyebrows at them, preferring strategies that have both.

There is no absolute definition of what "works"; it can vary widely from one person to another or even with the same person at different times -- my risk tolerance right now is different from what it was six months ago; six months from now it may be different again. Trader A may be comfortable with a strategy that loses more frequently than it wins because the average gain is three times the size of the average loss & results in a large total gain; Trader B may feel more secure with a strategy that wins 75% of the trades, but has a slightly larger average loss than gain because he feels more secure seeing a winner more frequently, even if he makes lower overall returns than Trader A.

QUOTE:
What should i test out so i can get my daily winning buzz.


Pardon me if I'm being overly blunt, but if your motivation for trading is to get any kind of "buzz," the only buzz you're likely to experience is that of the chainsaw that's shredding your account.

QUOTE:
I dont care how small the win is, as long as it's a win- everyday.


Really??! You mean if you spend a year busting your hump daytrading, jumping in and out, & by some miracle manage to squeeze out some net gain every single day, finishing the year with an overall 2% gain, & then find out that by buying only 10 stocks -- the right 10 stocks -- & just holding them for a year, you could have made 20%, that's okay?

Before doing anything else, it might be worth your while to read a book on the psychology of trading -- there's a bunch of decent ones out there.
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Eugene

#8
That was well put LennyNY.
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garron

#9
LennyNY, my American Friend.
Your perfunctory apology accepted old chap.
So i'll elaborate.
The minimum trade budget is $100k to $1mil max.
Activity objective is intraday.
Funds employed must be swept back EOD for Non U.S. mkt opg.
Minimum profit goal per day is 10 basis points.
The securities are limited to, DIA, Q's, SPY & 2x ETF's with minimum volume 100k per 3 minute session.
(No bonds, debt, options, swaps, spreads, condors, blah blah)
The trade win ratio minimum 66%.
AND, Yes, strategy NEEDS TO PASS CONSISTENT backtests for months B4 funds are committed.
(B&H is not a part of this scenario, but thanx for the tip)
Does ANYONE have ANYTHING to offer?
Thanx again.




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futurewag

#10
the safest and only place to win everyday is a savings account, of something like that. No one, no matter how skilled wins every year. LennyNY is right on target suggesting that you study, read books, search the web, and you'll find information to help with your expectations and how to meet them.

Good Luck
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warren631

#11
Sorry futurewag,you are wrong. My script wins every year. It is based on classic technical indicators (I developed it for my 401K) and I have been using it over the past 2 years. It has kept me out of the major downturns. See what it is forcasting for the next few weeks.

Performance:
78.95% profitable trades.
Long only. Daily. Suitable for S&P, ETF's, QQQQ, large mutual funds.
$598,000 profit vs. B&H -$590,000 loss.

Download screen shots of my WL at:

[LINK]http://www.4shared.com/dir/12439182/5d6ff779/sharing.html
[/LINK]
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brucev

#12
Hi Andrew,

"The minimum trade budget is $100k to $1mil max.
Activity objective is intraday.
Funds employed must be swept back EOD for Non U.S. mkt opg.
Minimum profit goal per day is 10 basis points.
The securities are limited to, DIA, Q's, SPY & 2x ETF's with minimum volume 100k per 3 minute session.
(No bonds, debt, options, swaps, spreads, condors, blah blah)
The trade win ratio minimum 66%."

These are reasonably odd as "must meet" requirements. Presumably these constraints are put on you by "the boss". Can you elaborate on what industry you work in?

These constraints don't match my understanding/experience of constraints on any of the main professions of hedge fund trader, bank trader, algorithmic trader, retail trader, etc. They appear to show a lack of understanding of the "business" side of trading.

Regards,
Bruce
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jaadatepe

#13
Wow, you guys are polite. I expected someone here to really let him have it!

First, mechanical intraday trading is not often successful. The "meat" of the mechanical trading world is trend following over longer periods of times, i.e. several months or longer.

Second, as was stated, your daily "winning buzz" won't be gratified with any strategy. Your desire for a *gambling* buzz may be gratified, but a gambling buzz does not equal a winning buzz!!!! It should be obvious that anyone seeking a "buzz" will lose. All of the books on trading repeat this over and over: if you go to the markets seeking a "buzz", like a gambler in Vegas, you will lose all of your money -- just like a gambler in Vegas!

In conclusion, your whole attitude is wrong. There is no "1 strategy that just works" for anyone who is thinking like you do, period. Read up, get some books from Amazon.

And realize that your question was horrendously, ridiculously absurd. You have no business trading now, and, most likely, you have no business trading ever. You will lose *all* of your money if you go out there with this attitude. No one is going to point you to a single system that is the best. No one here who is actually making money with their system will give you direct tips.

You'll have to do a lot of work, and there are very, very few successful mechanical intraday traders.

For your own sake, don't take your million dollars to the market. You'll just destroy your account. Buy a mutual fund while the American market is so low, and hold for the long term. At least you'll actually make some money. As for your buzz, go to Las Vegas -- it's more fun to lose large sums of cash while getting free drinks and enjoying a gaudy hotel.
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marron

#14
I like what Dr.Elder wrote, "3M, Mind, Method then Money".

Assume that you have the winning strategy/system, but you have no clear mind, confidence, discipline.. , you can overdrive the signals or stop auto trading system ... . After a chain of small losses you can't handle it, overdrive your system& that's it .. .

Thus, bottom line I think without the discipline mind, chance to make $ in trading ~ 0, my 1 cent's opinion.
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