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Found 100% winning system. Now what should i do?

  #15 (permalink)

North Carolina
Trading Experience: Beginner
Platform: NinjaTrader, Tradestation
Favorite Futures: es
Posts: 644 since Nov 2011

@nqcruiser Does "stoplessly" mean without a stop loss? If so, the first thing is to verify that the system/trader/method is profitable with a stop loss. It sounds like they have an edge but the hardest part can be capitalizing on an edge. I call this the bounding box problem. Trade with too much leverage and even if the method continues to work you will lose the account. But if you trade without enough leverage, you won't make a worthwhile return.

Keep in mind that it is possible to backtest systems that work without a stop loss in the past (typically just holding losers until they recover) but this is a type of over fitting because small changes could have caused the system to have had catastrophic losses.

Assuming, you verify everything out and you have a holy grail, i.e. never lose trading. The next step is fairly trivial. I would probably open several small accounts at different brokers. The reason you do this is so that you can hedge some of the accounts on certain days or weeks at random. It also reduces your capital with any one broker. For example, you might "oversize" some trades in account A, hedge a portion in B. If broker B is copying you then they will have losses which you have hedged. The next week you trade in B and hedge in A. You might also blow some accounts out too or whatever at random (but only with a small portion of your capital) or just let some sit dormant. The goal is to reduce the risk of anyone copying your "never lose method". Eventually at some point, if you have the rights you could look at scaling up because edges don't work forever or who knows maybe they can.

However, it is not as easy to make a fortune in trading as some think though even if you have an edge or several edges because in the real world there is always uncertainty.

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