Turn false signals into profit

[ankur07090]

You asked a very inspiring question in a simple way.

" if a strategy is failing 80 % of time why not use it opposite way and make money "

Virtually it looks correct. But i think its not possible consistently.

There are many aspects to, why this logic wont work. But one simple answer is already there in your question.
You said lot of wrong signals in range bound market. This is not enough.

If you see lot of wrong signals in every kind of market ( trending/choppy --not just range bound ) then your idea of opposite signals may work.

A Rain coat for a rainy Day. And umbrella for a sunny day.

Is Rain coat useful .. YES on a Rainy day
Is Rain coat useful ..NO on a Sunny day

Problem is not with rain coat ..its with the climate.

Problem is not with the strategy... its with market.

What kind of Move in market( trending/choppy etc ) - will decide the success/failure of the strategy. So even if we take opposite signals of our strategy they wont work consistently beacuse market movement wont be consistent.

Here enters the Analysts - They say -
"Follow this strategy for trending market" " Follow that strategy for range bound market" .......... :lol:isn't it ?

Thanks for reply.
Can you please tell something about how to predict that commodity market trending or rangebound.
Or give some idea about it.

 

[mohan.sic]

Thanks for reply.
Can you please tell something about how to predict that commodity market trending or rangebound.
Or give some idea about it.

I dont trade in commodity market.

I trade equities. But i dont know how to predict if its going to be a trending or range bound market in equities.

 

[James Martin]

If you lose often when you pick tops and bottoms, then you may want to consider selling at bottoms and buying at tops. If you’ve a strategy that loses too much (always) for long periods of time; if that strategy loses more money in protracted losing streaks than it makes in short-term winning streaks, then you’ll experience your breakthrough if you open opposite orders when the strategy gives you signals, e.g., like going short when it gives a ‘buy’ signal.

 

[mastermind007]

STji Namaste,
It is NOT the Rainy n Sunny days 'm worried abt, It IS the Artificial FLOODs n DROUGHTs created by the FIIs/Market Monsters 'm terrified of.

Rgrds
--ShiraJ--

You hit the nail on the tail!

 

[ankur07090]

Got some idea that its not trading strategy that gives more false signal its the trader that does the mistake most of the time
anyway learning a lot from this forum

thanks for all replies.:thumb:

 

[vikasjournalist]

How Supertrend Had given you 500-600 points gain

Hi, '

Have you reead about supertrend?