Outside the box: Random entries, rules based exits
Welcome to futures io.
(If you already have an account, login at the top of the page)
futures io is the largest futures trading community on the planet, with over 100,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.
At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.
With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.
We are fundamentally different than most other trading sites:
We are here to help. Just let us know what you need.
We work extremely hard to keep things positive in our community.
We do not tolerate rude behavior, trolling, or vendors advertising in posts.
We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
We expect our members to participate and become a part of the community. Help yourself by helping others.
You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple.
Sorry can't share the code but I am willing to share ideas and pointers if you get stuck.
Regarding heteroskedacity, you don't really have to understand the math, just the concept. Basically all it means is that volatility forms clusters, using that fact to your advantage is the key to robust MM.
The following user says Thank You to sefstrat for this post:
This month's Active Trader Magazine had some experiments with random entries and the performance of 5 different money management strategies around those entries. In essence, the trailing stop set to 3-5 times ATR performed best. Next month they will have a follow up article with random exits.
The following 2 users say Thank You to shodson for this post:
Platform: NinjaTrader (It's a love/hate relationship)
Favorite Futures: CL, TF, 6E
Posts: 176 since May 2010
Thanks: 60 given,
312
received
I don't have any original thoughts on this, but can share a few snippets I've picked up from others:
Van Tharp & Tom Basso did an experiment with a random entry system on a basket of stocks and futures. They used an ATR based trailing stop. Tharp claims the approach was profitable, albeit barely.
Chuck LeBeau tells a story from his days at EF Hutton of a (obviously crazy) trader who carried around a Dr pepper bottle with a straw in it & claimed he got trading signals from Mars. The funny thing was he was one of the most profitable traders upstairs. Mainly because when he was losing, he exited quickly to avoid the ridicule of the other traders. When he was winning, he let the positions run to prolong his triumph.
Chuck also tells of his system building days & how difficult they found it to evaluate the efficacy of entries. Basically, all entries did well with certain exits & the same entries did poorly with other exits. His conclusion was that exits were the overwhelming deciding factor in the profitability of their systems.
The conclusion: There is precedence of random entries outperforming the herd. At a minimum, this should make us question the emphasis that we place on entries & think whether we focus enough on exit strategy.
I've personally found that in my discretionary daytrading, that simply entering with the trend and maintaining a positive risk:reward ratio keeps me out of trouble. I find that good entry technique is more often knowing when NOT to enter than it is about when & where to get in.
I think elaborate systems and entry methods are simply to give us a sense of control. We set the criteria for entry and when the market complies, we feel in charge. In reality, the ONLY thing that we as traders have any control over is our risk. Nothing else.
The following 3 users say Thank You to Slipknot511 for this post:
