Download MetaTrader 5

Should Trader System Developer Have Multiple Systems

To add comments, please log in or register
goodoboy
106
goodoboy  
Hello, 

From my research and reading, I have read that one trading systems do not work for all market conditions. 

Questions:
1. Should a system trader have multiple trading systems for different market conditions? 
2. If yes, do you recommend system traders keep all their systems running in sim mode to constantly evaluate the performance and turn on best performing system as needed?
3. Should a system trader develop skill for accessing when market conditions are changing and create one system adaptive for all market conditions.

The questions are from readings that no one system stay consistent profitable forever. Unless the systems is highly adaptive to market conditions. 
I hope I make sense. 

Thanks for your comments.
Alain Verleyen
Moderator
35039
Alain Verleyen  

Moved to correct section.

Ahmad Zuhairdi Noh
4295
Ahmad Zuhairdi Noh  
goodoboy:
Hello, 

From my research and reading, I have read that one trading systems do not work for all market conditions. 

Questions:
1. Should a system trader have multiple trading systems for different market conditions? 
2. If yes, do you recommend system traders keep all their systems running in sim mode to constantly evaluate the performance and turn on best performing system as needed?
3. Should a system trader develop skill for accessing when market conditions are changing and create one system adaptive for all market conditions.

The questions are from readings that no one system stay consistent profitable forever. Unless the systems is highly adaptive to market conditions. 
I hope I make sense. 

Thanks for your comments.

Well, 

  1. Not really if your EA can "quickly" recognize a trending and sideways market. Please take note that I said "quickly" because of many available EA only able to recognize such condition only after it has established for quite some time.
  2. I've answered above.
  3. Yes.

If your EA can successfully able to quickly recognize the market condition. You can scalp the market with a help of martingale without worry. I just did even though it's not perfect yet.

no one system stay consistent profitable forever.

Quoting your word there. Its because a manual professional trader usually depends on the news and market while most EA is depending on indicator and charts. Somebody needs to create something different.

Who knows, maybe you can come up with a special algorithm or something. That sure will change the world of trading games.

Good luck! :)

Juan Fernandez
3673
Juan Fernandez  

You only need your EA works always in a specific conditions. You dont need try trade in all behaviors. But one thing is true. When EA find the conditions you need it do perfect or you will have manu probabilities to fail in long term

Fernando Carreiro
3951
Fernando Carreiro  
goodoboy: From my research and reading, I have read that one trading systems do not work for all market conditions. 

Questions:
1. Should a system trader have multiple trading systems for different market conditions? 
2. If yes, do you recommend system traders keep all their systems running in sim mode to constantly evaluate the performance and turn on best performing system as needed?
3. Should a system trader develop skill for accessing when market conditions are changing and create one system adaptive for all market conditions.

The questions are from readings that no one system stay consistent profitable forever. Unless the systems is highly adaptive to market conditions. 
I hope I make sense.
  1. Yes. You should never rely on just one or two EAs. Just as Professional or Institutional Traders diversify their investments in many different types of assets in their portfolio, in order to diversify and spread out their risk, so should you do with your strategies and EAs. You never know when a particular change in sentiment or overall "personality" of a certain market or asset will change, and for which your EA was never designed to handle.
  2. You don't have to keep all of them running in "simulation mode", but you can do that for some of them. For most, you can simply run back-tests on a regular basis or if you are already experienced enough to know where and when they work best. For some EAs you can also build in a certain amount of adaptability or an ability to disable and re-enable based the type of conditions that are required. This however, can be a very complex and advanced area of a coders/traders expertise and skill.
  3. A good EA is normally (but not always) based on good solid manual trading strategies, and so a originated from the skills of a trader with the ability and experience to know and understand the markets in which one is trading, but I doubt you could ever program a single system that can adapt to all and every possible market type and condition. That would be a monster of an EA, that still resides in the realm of Sci-Fi Artificial intelligence. Traders and EA developers live in the real world and we tend to work in "compartments" creating smaller solutions for a set number of conditions. That is why there are so many different tools we use for many different types of tasks. It is not like we are Dr. Who with his "sonic screw-driver" that seems to be capable of doing everything he applies it to.
PennySeven
449
PennySeven  
Fernando Carreiro:
  1.  That would be a monster of an EA, that still resides in the realm of Sci-Fi Artificial intelligence. 

 In my opinion, that "monster of an EA" resides between an experienced, consistently profitable, manual traders ear´s. It is called the average human brain of a normal person with an IQ of 100, the average human intelligence level. 

An experienced, consistently profitable, manual trader has at least one indicator that timeously signals the change in the intra-day market from a volatile, short period, relatively quick - but still tradeable - trend-reversal market to a long move continuing-trend intra-day (possibly inter-day) market.

An experienced, consistently profitable, manual trader with that "monster of an EA"  (absolutely normal human brain) between his or her ears has (1) short period trading rules and (2) long move trading rules and trades accordingly.

The emphasis is on "an experienced, consistently profitable, manual trader" and "normal human brain". 

So, Goodoboy, you already have 50% of what is required, your brain. Now you have to get the experience on the Demo Platform, normally 10 000 hours. 

Yes, you are right: you need (1) rules for the short period market and (2) rules for the long move market. 

Remember, only trade in a real, live account once you are consistently profitable on the Demo Platform. This will guarantee that you have a very good chance of being consistently profitable trading in a live or real account too.

Good luck.

Fernando Carreiro
3951
Fernando Carreiro  

PennySeven: In my opinion, that "monster of an EA" resides between an experienced, consistently profitable, manual traders ear´s. It is called the average human brain of a normal person with an IQ of 100, the average human intelligence level.

An experienced, consistently profitable, manual trader has at least one indicator that timeously signals the change in the intra-day market from a volatile, short period, relatively quick - but still tradeable - trend-reversal market to a long move continuing-trend intra-day (possibly inter-day) market.

An experienced, consistently profitable, manual trader with that "monster of an EA"  (absolutely normal human brain) between his or her ears has (1) short period trading rules and (2) long move trading rules and trades accordingly.

The emphasis is on "an experienced, consistently profitable, manual trader" and "normal human brain". 

I beg to differ! Even the "human brain" is not capable of being able to trade any market, on any asset, on any time-frame, under any condition, profitably all the time.

Good retail traders select just a few markets, or assets and use only a few well defined strategies at a time with which they have the most experience and knowledge on, in order to trade successfully.

Humans are not very good at multitasking and need to focus on just a few things at a time in order to really be able to to them properly.

If all one needed was an average "human brain" to be able to successfully trade any and all markets with ease, then mostly everyone would be rich (at least 50% of them, since its a zero-sum game)!

We all know that it is not the case! So, no - the "monster EA" is not a "human brain"!

EDIT: But yes, a "human brain" is needed to devise a good strategy and to construct a good EA!

PennySeven
449
PennySeven  
Fernando Carreiro:

I beg to differ! Even the "human brain" is not capable of being able to trade any market, on any asset, on any time-frame, under any condition, profitably all the time.

Good retail traders select just a few markets, or assets and use only a few well defined strategies at a time with which they have the most experience and knowledge on, in order to trade successfully.

Humans are not very good at multitasking and need to focus on just a few things at a time in order to really be able to to them properly.

If all one needed was an average "human brain" to be able to successfully trade any and all markets with ease, then mostly everyone would be rich (at least 50% of them, since its a zero-sum game)!

We all know that it is not the case! So, no - the "monster EA" is not a "human brain"!

EDIT: But yes, a "human brain" is needed to devise a good strategy and to construct a good EA!

I agree 100% that ´the "human brain" is not capable of being able to trade any market, on any asset, on any time-frame, under any condition, profitably all the time,` 

and that 

"Good retail traders select just a few markets, or assets and use only a few well defined strategies at a time with which they have the most experience and knowledge on, in order to trade successfully."

I suggest Goodoboy trades only the EuroDollar. It is the biggest and best market in the world. All trading dynamics play out best in this market.

For example: one simple long move rule yesterday resulted in a Euro/Dollar BUY at 5 am (GMT) and a SELL at 9 pm (GMT) producing 145 USD (118 Euro) Pip profit which resulted - at 50 leverage - in 59% profit - in one day. Who needs crypto-currencies?

I only trade the EuroDollar. 

I absolutely maintain that all that is required are (1) "an average human brain" plus (2) 10 000 hours on the Demo Platform plus (3) being consistently profitable on the Demo before trading on a live account.

Nº (1) is freely available. Nº (3) guarantees that I am 100% right. Thus, all that is required are the 10 000 hours on the Demo. 

So, that undeniably proves that the "monster EA" is the average human brain. 

Have you spent 10 000 hours on the Demo before you started trading live?

How many people do you know who have done that before they went live?

Enrique Dangeroux
302
Enrique Dangeroux  
PennySeven:

I agree 100% that ´the "human brain" is not capable of being able to trade any market, on any asset, on any time-frame, under any condition, profitably all the time,` 

and that 

"Good retail traders select just a few markets, or assets and use only a few well defined strategies at a time with which they have the most experience and knowledge on, in order to trade successfully."

I suggest Goodoboy trades only the EuroDollar. It is the biggest and best market in the world. All trading dynamics play out best in this market.

I only trade the EuroDollar. 

I absolutely maintain that all that is required are (1) "an average human brain" plus (2) 10 000 hours on the Demo Platform plus (3) being consistently profitable on the Demo before trading on a live account.

Nº (1) is freely available. Nº (3) guarantees that I am 100% right. Thus, all that is required are the 10 000 hours on the Demo. 

So, that undeniably proves that the "monster EA" is the average human brain. 

Have you spent 10 000 hours on the Demo before you started trading live?

How many people do you know who have done that before they went live?


10.000 hours is 5 years of 40 hours a week with practically no holiday. if you would do it in your spare time, say 2 hours a day it will take over 19 years. 

If you need 10.000 hours, maybe trading is not your thing and you should consider doing something else. 

PennySeven
449
PennySeven  
Enrique Dangeroux:

10.000 hours is 5 years of 40 hours a week with practically no holiday. if you would do it in your spare time, say 2 hours a day it will take over 19 years. 

If you need 10.000 hours, maybe trading is not your thing and you should consider doing something else. 


I did it in 28 months - 17 hours Demo trading per day.

Outliers by Malcolm Gladwell  The 10 000 hours book.

Tom Hoang said on this forum it took him 5 years of part-time trading. He now trades full-time for a living. 

Outlier - Wikipedia
Outlier - Wikipedia
  • en.wikipedia.org
In statistics, an outlier is an observation point that is distant from other observations.[1][2] An outlier may be due to variability in the measurement or it may indicate experimental error; the latter are sometimes excluded from the data set.[3] An outlier can cause serious problems in statistical analyses. Outliers can occur by chance in any...
PennySeven
449
PennySeven  

Enrique Dangeroux:

If you need 10.000 hours, maybe trading is not your thing and you should consider doing something else. 


Outliers by Malcolm Gladwell. The 10 000 hours book. 

I did not come up with the 10 000 hours theory. 

I found it to be true. I did not know about it when I started Demo trading. 

Outlier - Wikipedia
Outlier - Wikipedia
  • en.wikipedia.org
In statistics, an outlier is an observation point that is distant from other observations.[1][2] An outlier may be due to variability in the measurement or it may indicate experimental error; the latter are sometimes excluded from the data set.[3] An outlier can cause serious problems in statistical analyses. Outliers can occur by chance in any...
12
To add comments, please log in or register