Inverting unprofitable systems to generate a profitable one - page 2

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Reasons:

1. In a linear system you change inputs and get corresponding output. We have already heard that markets are considered non-linear (chaotic) systems... so linear assumptions can be hardly applied.

2. Although the technical and fundamental analysis, markets also share the characteristics of a game. Let's consider poker... if you INVERT your bet, you may still not win, because your opponents change his/her attitude in reaction to yours. In aggregated terms, this is what happens in the market. The next question would be how to invert a bet in a poker game…

3. You can see this discussion in other threads. Observe open-book brokers at eurusd. You see 50 % of bulls versus bears in a regular basis, i.e. 50% of INVERTED POSITIONS, concluding that 50% will win and the other 50% will lose. Nevertheless, you know that only 5% (yes, five percent) of the traders are profitable ones… 95% will lose their money.



 

Main reason: spread.

There are a few very long threads on the subject, one that comes to mind: http://www.forexfactory.com/showthread.php?t=249402.

 

I'll do it this week and I post here my conclusion.

Thanks 1005phillip

 

Thanks Gordon, I read it...

How can I back test without taken spread in my considerations? It will solve the problem, and for sure we'll reach some conclusion.

 
rodrigosm:

Thanks Gordon, I read it...

How can I back test without taken spread in my considerations? It will solve the problem, and for sure we'll reach some conclusion.

U need to set the spread to zero... There is no built-in way to do this, but it's doable; for example -> https://www.mql5.com/en/forum/124778 (there are other solutions floating around the forum, you can search).

p.s. I have never tried setting it to zero myself, so I'm not sure if it's considered a valid value by the Tester...?

 
One more thing, u need to keep the Terminal disconnected or setup a bogus proxy before changing the spread, otherwise the Tester will just override that spread with a value from the broker you are connected to.
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