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Webinar: FuturesTrader71 (FT71) on Risk, Sizing, Scaling and Trade Management
ok, then let me say that I REALLY enyoed the presentation. A lot of very usefull information and I think I will start a new strategy line (CoiNToss) to check the numbers.
VERY good stuff. I have seen some weinars here, and some are quite - random. Al Brooks was a bad one - no basicc talk, jsut going from chart to chart. Quite... hm... not realy anything worthwhile if you anyway work through the books.
This one was a gem. VERY nice information. VERY well presented (with the cough issue of 50%) and with a lot of really important things pointed out. Makes me pick up my card and get more info from FuturesTrader
Can you help answer these questions from other members on NexusFi?
To me, it means the markets are constantly evolving, and never repeat themselves. What happened yesterday, last week, last month or last year was based on more than just price data. It was based on events in the world, dictatorships, wars, terrorists, elections, oil spills, earnings reports, inventory reports, economic condition, and the list goes on for miles...
This means that even though a price pattern may look similar today or tomorrow to a pattern from last week, month, or year, it is not the same.
Well said Mike. Eat the chicken leave the bones on the plate.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
Just trying to understand. How is this helping you? Just take the VWAP for example. Many traders will try to enter near the VWAP on a retracement. Does it mean looking at this repeating pattern may become hazardous?
Don't get me wrong. I still use historical price information, because I think it is better than planetary alignment or throwing darts.
You just have to know that things change. And just because price did something in the past, there is no way to predict what it will do in the future.
This is why I prefer discretionary trading vs mechanical or automated trading. I have the flexibility to make decisions on my own. And I can then look at my on forward tested results set, of my own discretionary traders over a length of time, and reach some conclusions about my trading.
With a mechanical or automated approach, you could design a bot that has this type of flexibility, although 99% of retail traders I would say don't take that approach. They use hard-fast numbers like "CCI 14" or "MACD 12,26,9" or whatever the case may be, and the strategy is unable to adapt. It has a fixed set of inputs, and it is looking for a zero or a one to make a new order.
But going back to throwing darts, I found it most interesting the examples @FuturesTrader71 listed towards the middle or end of webinar, with his spreadsheet demonstrating random entries using 5-tick stop/5-tick winner vs 2 contract 5-tick stop/5-tick winner + 5-tick stop/10-tick winner. I would like to extend that spreadsheet out to tens of thousands of trades to see if the expectancy holds up. Because if the expectancy does hold, then throwing darts might be a good idea
In FT's example one of the 14 trades in the 2 contract 5-tick stop/5-tick winner + 5-tick stop/10-tick winner, had only a "1" tick loss not 10 ticks as the other losers. This went against the rules he stated at the start and would change his expectancy, perhaps even moving it to break even or a loss. (This is a good example of critical examination and due diligence)
I remember that he had another coin-toss experiment in his Webinar 3 with a different set of rules that yielded some really interesting results. The problem was that there wasn't enough samples. One interesting rule (hopefully without giving too much away) was that the system couldn't trade during the first and last hours because there is too much directional bias during those times.
I would like to see variations of these experiments with 1000's of samples.
