Trading the Enterprise...!
- Thread starter linkon7
- Start date
Pitfalls of black boxes. You dont know whats happening, and most importantly, why its happening. Abhi to shuruwaat hai, aage aage dekho hota hai kya....
Simple reason is that if you know the logic of your system, you know how it will behave when the market is not moving according to normal patterns.
Also, you have a list of days where your system did not perform well, so you know...... that in such and such scenarios, the chances of your system's performance going down is acceptable. Like you may know with statistics, that your system does not do well on huge gap days, or after heavy movement days, or such things. Or that the first 1 hour is choppy for you system so you keep volumes low, etc.
But as they say, Ghar ki murgi daal barabar. Maybe you would be more comfortable trading a moving average system than a black box, because at least you would know whats going on.
Just my 2 trillion cents
Simple reason is that if you know the logic of your system, you know how it will behave when the market is not moving according to normal patterns.
Also, you have a list of days where your system did not perform well, so you know...... that in such and such scenarios, the chances of your system's performance going down is acceptable. Like you may know with statistics, that your system does not do well on huge gap days, or after heavy movement days, or such things. Or that the first 1 hour is choppy for you system so you keep volumes low, etc.
But as they say, Ghar ki murgi daal barabar. Maybe you would be more comfortable trading a moving average system than a black box, because at least you would know whats going on.
Just my 2 trillion cents
Any system will be dependent on its data and signals can and will shift if data changes.
GDFL data has a habit of adjusting itself in the first 1 minute. I have experienced this before last week. Its the way the data is fed to amibroker that causes this. It has almost zero delay which has its side effects as sometimes system misses few ticks and then adjusts them in real time. The HOD and LOD is always the same on amibroker and trading terminal for even the least traded options and futures. We have to live with it.
As a rule never punch a trade on the first 1 minute till u see the high / low of NF sync on ami and terminal...!
Pitfalls of black boxes. You dont know whats happening, and most importantly, why its happening. Abhi to shuruwaat hai, aage aage dekho hota hai kya....
Simple reason is that if you know the logic of your system, you know how it will behave when the market is not moving according to normal patterns.
Also, you have a list of days where your system did not perform well, so you know...... that in such and such scenarios, the chances of your system's performance going down is acceptable. Like you may know with statistics, that your system does not do well on huge gap days, or after heavy movement days, or such things. Or that the first 1 hour is choppy for you system so you keep volumes low, etc.
But as they say, Ghar ki murgi daal barabar. Maybe you would be more comfortable trading a moving average system than a black box, because at least you would know whats going on.
Just my 2 trillion cents
Simple reason is that if you know the logic of your system, you know how it will behave when the market is not moving according to normal patterns.
Also, you have a list of days where your system did not perform well, so you know...... that in such and such scenarios, the chances of your system's performance going down is acceptable. Like you may know with statistics, that your system does not do well on huge gap days, or after heavy movement days, or such things. Or that the first 1 hour is choppy for you system so you keep volumes low, etc.
But as they say, Ghar ki murgi daal barabar. Maybe you would be more comfortable trading a moving average system than a black box, because at least you would know whats going on.
Just my 2 trillion cents
Before we trade any system, even a black box system, we need to see how it performs by doing a BAR replay for at least few months. Watch it live for 1-2 weeks and then gain confidence and only then trade it. There is no excuse for not knowing how a system works under various phases.
The outcome of a particular trade is always unknown. But over a series of trades taken with a system, the outcome has an edge if the system handles the exits very well. With this system i know very well that if a trade goes wrong, the worst case, my loss with be 12 points. It will give me an exit before that 12 point stop is hit. I know that my system wont let me have big losses, which leave only 3 more possibilities left on the table. Either i have a minor profit, minor loss or a big profit. Minor losses will be taken care of by the minor profits leaving the big ones to add to my profit.
Stats says 57% of the trade are profitable and that means i know out of the 6 trades, only 2-3 will be winners. I give myself a 20% slippage on the maximum points system throws at me after deducting cost of transaction @ 0.03% on each leg (brokerage + taxes) from each trade. I have given myself that room for bad trades.
just my 1 cent...!
Similar threads
-
-
What's the most irritating in trading?
- Started by ReggieFx
- Replies: 0
-
High Leverage trading with Metatrader (400:1, 500:1)
- Started by ReggieFx
- Replies: 0
-
-