"The 'perfect' trading system - page 24
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Both of these points are interesting to discuss. However, there is little point in discussing the second without having dealt with the first. Therefore I would like to start with the OTT.
Unfortunately, I haven't found anything on your site, in the documentation to the builder, or here about it. Unless, of course, the image you have drawn with two straight lines is considered to be OTT content. Could you please provide a link to its statement - it would be good to get acquainted before discussing it. :-)
You see, this: "General Trading Theory (GTT): To profit, one should trade one's own function in sync with the market." is the entire OTT, i.e. all 100% of it.
The problem with a more rigorous description is that there is no mataparat for finnancial markets.
There are a bunch of mathematical theories "dragged by the ears" to the market, but there is no rigorous science - nothing can be proven, within any theory that already exists.
So OTT just needs to be understood - there is no mystery and the terms are standard.
To understand means to create a model in your head of what is going on. Having the model, it will be very easy to create new Trading Systems within the framework of OTT.
For example, "all objects falling down" is a model. Any child can use it and does not need to know the theory of gravity to do so.
For an example, see.
PAMM
43_EURUSD
Total Net Profit 49845 Gross Profit 194607 Gross Loss -144762 Profit Factor 1.34
Total numbers of trades 254 Number winning trades 144 Number losing trades 110 Percent profitable 56.69%
Largest winning trade 3260 Largest losing trade -2210
Average winning trade 1351.4375 Average losing trade -1316.0182 Avg trade 196.2402
Max drawdown 9421
Here the average trade is higher than the average loss and yet the percentage of successful trades is 56% - as you can see, stop-losses do not necessarily have to exceed targets.
This result is achieved elementary - there is no attempt to predict the future or obtain statistical superiority of profitable trades over loss-making ones using some titanically complicated method.
You see, this: "General Trading Theory (GTT): To make a profit, one should trade one's own function in sync with the market." is the entire GTT, i.e., all 100%.
The problem with a more rigorous description is that there is no mataparat for finnancial markets.
There are a bunch of mathematical theories "dragged by the ears" to the market, but there is no rigorous science - nothing can be proven, within any theory that already exists.
So OTT just needs to be understood - there is no mystery and the terms are standard.
To understand means to create a model in your head of what is going on. Having the model, it will be very easy to create new Trading Systems within the framework of OTT.
For example, "all objects falling down" is a model. Any child can use it and does not need to know the theory of gravity to do so.
For an example, see.
PAMM
43_EURUSD.
Total Net Profit 49845 Gross Profit 194607 Gross Loss -144762 Profit Factor 1.34
Total numbers of trades 254 Number winning trades 144 Number losing trades 110 Percent profitable 56.69%
Largest winning trade 3260 Largest losing trade -2210
Average winning trade 1351.4375 Average losing trade -1316.0182 Avg trade 196.2402
Max drawdown 9421
Here the average trade is larger than the average loss, and yet the percentage of successful trades is 56% - as you can see, stop-losses do not necessarily have to exceed the target.
This result is obtained elementary - without trying to predict the future or obtain statistical superiority of profitable trades over loss-making ones using some titanically complicated method.
Excuse me, but in my language this is called pseudoscientific bullshit.
The 100% OTT you cite is neither a theory, nor a trading recommendation, nor a model, nor even just a phrase that can be understood. It would at least be necessary to decipher the terms in order to understand. OK, you have deciphered your own function and that of the market, I've seen it. However, you have not deciphered the term "synchronise" anywhere or in any way. And what would you like to do with your "theory" without it?
I am not interested in the results of your trading robots or strategies. Their validity can always be challenged. Not in the sense of questioning the truthfulness of your words, but in the sense of their statistical validity.
I'm interested in the theoretical foundations of your developments. And precisely because you often refer to them. So, since you have proposed a discussion of OTT, then decipher all the necessary terms, explain what and how is done (at least presumably), in particular what synchronisation means and how it is done. Otherwise what is there to discuss ?
.
Your statements "Therefore OTT just needs to be understood" and "To understand means to create a model in your head of the processes going on" can be seen as a guide for creating your own function. Is it so ? Or am I wrong ?
If you add to this your formulation of OTT, then it turns out that the success of the trade does not depend on the quality of the model. Just as long as it gives its own function and this function is synchronised with the market according to the procedure you envisage. Did I get it right? What is this procedure?
If I'm wrong, how? Or am I supposed to come up with a model myself and synchronize it according to my own algorithm ?
In general, I would like more certainty. Trading and profit are very concrete things. And I will never believe that it can be arrived at with half a dozen general phrases.
PS
IMHO General theory in science (and in practice) is commonly used to refer to very comprehensive things that reveal both quantitatively and qualitatively entire classes of phenomena. "General trade theory" is too loud a name for the 100% you cite. And it immediately spoils the reputation of both it and its author. But you can certainly call it what you like.
I beg your pardon, but in my language this is called near-scientific chatter.
I am not aware of any work on financial markets that does not fall into the category of "near-scientific jibber jabber" :)
Fin markets are not a science yet.
The term "synchronise" is a standard, standard synchronisation of two processes.
For example, what happens if we "predict" the development of the NF so that it matches the FR as much as possible? Over time, due to the accumulation of prediction errors, the divergence between the two functions may reach such large values that the prediction will lose all meaning - the functions will become completely asynchronous, i.e. will exist on their own.
This is why synchronization is needed.
How you will do the synchronization is not very important, since it is at the level of the algorithm. For example, in the example of the adaptive EA, synchronization is carried out through a stop loss. Stop Loss triggered - changed the direction.
About "synchronization":
"Synchronization of oscillations, the establishment and maintenance of such a mode of oscillation of two or more systems in which their frequencies are equal or multiple of each other. For example, if there is a coupled system consisting of two self-oscillating systems with frequencies w1 and w2, then when w2 is close to w1, S. c. occurs, i.e. the systems begin to oscillate with the same frequency w. The greater the magnitude of coupling between the systems, the greater the frequency difference Dw= |w2-w1| occurs, Dw is called the band of C. c. There is mutual C. c. of coupled systems, in which each of the systems acts on the other and the frequency of C. c. differs from both original frequencies, and forced C. c., or frequency hopping, in which the coupling between the systems is such that one of them (the synchronizing system) affects the other (the synchronized system), and the reverse effect is completely eliminated; in this case, an oscillation with the frequency of the synchronizing system is established in the system.
The reason for the appearance of mutual C. C. of 2 systems consists in the fact that in the presence of coupling between them in each of them, in addition to the natural oscillations, there are forced oscillations under the influence of the second system. The forced oscillations in an oscillating system (e.g. in an oscillator) have a twofold effect on the natural oscillations of this system. On the one hand, there is a dilation of the frequency of natural oscillations and its approximation to the frequency of the external force; on the other hand - the forced oscillations suppress the amplitude of the natural oscillations and can completely cancel them out.
Mutual C. c. takes place at frequencies, which are close to multiples w1/w2 = n/t (where n and t are integers). At the same time the greater n and t, the narrower the area of sp. c. Therefore sp. c. at large n and t is observed only in the case when at least one of the interacting oscillators is the oscillator of relaxation type, for example an oscillator of saw-tooth oscillations. In the case of mutual oscillatory joints of two oscillators, strongly differing in power, more powerful oscillator plays the role of synchronising one and less powerful oscillator plays the role of synchronising one. This case is a transition from mutual to forced switching.
M. c. is important in Engineering, as it allows autogenerators, alternators, synchronous motors and other nonlinear systems to enter synchronous mode and operate stably within a finite frequency band, and also allows several generators to operate stably on a common power system grid or several radio transmitters on one antenna. S.c. is used in multipliers and frequency dividers. In complex nonlinear systems that generate multiple frequencies, it is possible to use C.Q. at different combinational frequencies of the system. For example, c.c. at differential frequency is used for synchronisation of laser modes. This is used in medicine, when, for example, patients with heart rhythm disorders have a pacemaker implanted.
Lit.: K. F. Teodorchik, Autovibrating systems, Moscow-L., 1952; I. I. Blekhman, Synchronization of dynamic systems. I., Synchronization of Dynamic Systems, M., 1971; Hayashi T., Nonlinear Oscillations in Physical Systems, translated from English, M., 1968.
I don't understand what else there is to describe in more detail - everything is clear as it is :)
Your statements "Therefore the OTT must simply be understood" and "To understand is to create a model in your head of the processes that take place" can be seen as a guide to creating your own function. Right ? Or am I wrong?
OTT is what a guide to action is all about:
1. Create your own function
2. Synchronize it with the market, i.e. the FR synchronizes the NF, since the opposite is impossible - in Forex you can't influence the price with your trading volumes. In other markets, sometimes you can influence the price, then the synchronization process will be a little more complicated.
The more stable your own function is, the more stable the result will be.
The more accurate the synchronization, the more profits, i.e. if the NF and the FR are fully synchronized, there will be no losses.
Yes, exactly - an infinite number of implementations are possible.
The NF can be anything. The better it allows itself to be synchronised - the more accurate the synchronisation will be - everything is interconnected.
The synchronisation algorithm can also be anything - surely something else can be invented besides stop-voice synchronisation.
When someone comes up with an even more general trading theory than OTT, then I'll think about changing the name to something more modest :)Yes, if you try to predict the future and not use OTT :)
If you use OTT, after a period of loss, a period of gain is inevitable.Show it in practice and people will reach out to you. :)))
And you can say meaningless words for a long time.
Put it into practice and people will reach out to you. :)))
You can talk about meaningless words for a long time.
Take an adaptive EA and at least "practice" :)
About the meaningless words - I agree - you'd be better off shutting up.
Get an adaptive EA and at least "practice" :)
About the meaningless words - I agree - you'd be better off not saying anything.
Thanks, I don't need any of that. :))
Thanks, I don't need any of that. :))
And rightly so.
Why do those who don't trade need advisors? :)