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If the open trades are locked...

Elkart
Elkart
Dec 26 2009 at 07:56
posts 941
Then the real story is being hidden. I suggest ignoring those systems. Don't even post in their threads. By doing so we're lending credibility to systems where the author doesn't understand the forex market and the build up in trades will cause the system to fail in due course. If I see an interesting system and the open trades history is locked I dismiss instantly. Not worth looking at.
 
Until fxbook brings in the equity graphs you can't tell what's going. It's no coincidence that the majority of the best performing systems here have theirs locked.

Those type of systems are not long term sustainable, just like the the ones who have trades open for a week to take 5 pips aren't really sustainable.

Sure they might work for a while. But they will fail. The current market conditions are the most volatile we've seen for years. You can throw darts at this market and make money.

Elkart
Elkart
Dec 26 2009 at 08:46
posts 941
The concept is well known to not work. It's called the fat tail of distribution: Here's an exert and a link:


'Applications in economics

In finance, fat tails are considered undesirable because of the additional risk they imply. For example, an investment strategy may have an expected return, after one year, that is five times its standard deviation. Assuming a normal distribution, the likelihood of its failure (negative return) is less than one in a million; in practice, it may be higher. Normal distributions that emerge in finance generally do so because the factors influencing an asset's value or price are mathematically 'well-behaved', and the central limit theorem provides for such a distribution. However, traumatic 'real-world' events (such as an oil shock, a large corporate bankruptcy, or an abrupt change in a political situation) are usually not mathematically well-behaved.

Fat tails in markets return distributions also have some behavioral origins (investor excessive optimism or pessimism leading to large market moves) and are therefore studied in behavioral finance.'

https://en.wikipedia.org/wiki/Fat_tail

Elkart
Elkart
Dec 26 2009 at 08:59
posts 941
My point is basically this.

If it's scalping system (spot the small tp's) it's not realistic to run it successfully live. In fact the brokers will flag your account most probably and if I can quote a a friend who used to work back office and now owns a brokerage 'make it very difficult for you'. Any MT broker can add volatility to your feed at will.

If it's a fat tail system (spot the locked open trades) it's not long term sustainable as pointed out above.

Avoid systems that rely on these concepts and avoid people that try and sell you these type systems. Especially if they post a fake box to back it up. Some of them might have the best intentions, but if they are obviously oblivious to the risk then you want to stay away from it. Take the $90 and go have a few beers, at least you'll get something for your money. Most likely they don't have the best intentions and are well aware of the problems but will try sell you the system anyway.

Fill or Kill (cateful)
Dec 26 2009 at 09:29
posts 87
I agree.

Anyone who's interested in buying a profitable EA, here is a question you want to ask before you swipe your credit card: Would anyone sell you the goose that lays golden eggs? Maybe the eggs, but never the goose.

Do your own work, put in a few years in this business and you have greater chance of seeing the light. Try read a lot. A LOT. Read the news, read the industry journals, read The Economists, read the well-known trading books, read the Fed reports, read the NFP numbers, read the prices, read everything you can get your hands on. And maybe then you will have this bulb lighting up in your head.

bizWiz
Dec 26 2009 at 09:41
posts 397
elkart, great posts! this is very useful information and should be read by anyone looking to buy/lease a system.

i would like to add that even if you think you found a good system, always assume that it can fail, so start small and build your account from there.

also another important aspect is the system's vendor - it will help you judge the system if you know who you're dealing with, and if something doesn't add up - you can always move to the next one.


Sleep is for the weak.
bizWiz
Dec 26 2009 at 09:43
posts 397

cateful posted:
  Anyone who's interested in buying a profitable EA, here is a question you want to ask before you swipe your credit card: Would anyone sell you the goose that lays golden eggs? Maybe the eggs, but never the goose.


too true! 😄

Sleep is for the weak.
Forexellent (maanoo)
Dec 26 2009 at 11:14
posts 11
Well using an EA to trade for you is a risky thing, I personally used one of these and at first I had some gains in my account but after a while it started losing all the profits it made.

What I mean is that trading with an EA might be profitable for a short term and after that you'll have to tweak it to the current market condition and so on this basis.

I was and still studying price action trading for the last 3 years and I'm trading for a living, you can check out my demo account results which I started it a few weeks ago, the most important thing to remember when trading is risk management I personally don't trade more than 2% per a trade and most of the time only 1%.

Have a good day.

The trend is your friend.
pc8multifx (pc8multifx)
Dec 26 2009 at 11:52
posts 879
Since i don't sell EAs, but trade managed account with them, there is a good reason for locking the open trades. I just don't wanna give the lurkers here an insight view of the successful strategy.
 There was a lot of work to do to make these EAs full adaptive to all market conditions , more than 3 years 3 people worked on it.
My demo portfolio was made to show interested investors the hypothetical trade performance under 'live' conditions. They never ask about the logic behind it.
Nobody asks for the construction plan of the engine when buying a car....😄

Elkart
Elkart
Dec 26 2009 at 13:11
posts 941
No, but they do get shown an engine most of the time, so we can at least tell it's got one.

Elkart
Elkart
Dec 26 2009 at 13:26
posts 941
It's always possible i guess to give someone a invitation link, but for me I just write the system off. Most probably it's a fat tail system.


Fill or Kill (cateful)
Dec 26 2009 at 15:01
posts 87
pc8multifx posted:
...I just don't wanna give the lurkers here an insight view of the successful strategy.
 There was a lot of work to do to make these EAs full adaptive to all market conditions...


I personally don't care if someone copies my trades, I make my return and you make yours, that's none of my business. There's plenty of money out there. I mean if someone asks me how I trade, I have no problem telling him that. See my props account's discussion page.

I looked through all your systems listed here, if you're managing accounts please be very careful with your transaction costs.

Well I guess what I want to say is, to each his own, but always be careful when you trade. If someday the EA stopped working, make sure you have the guts to turn it off just like you would do to a losing position.

Forexellent (maanoo)
Dec 26 2009 at 15:22
posts 11
Fill or Kill:

It just shows how generous you are showing people how you trade.

I myself also have no problem showing my trading history as it's public, it's not like I'm going to lose in this market if someone else traded the same way I do.

And it's not like any one is going to be a successful trader just by looking at some random numbers in any one's account history, trading requires patience and experience to succeed, unless you are a lucky guy.

Anyway trading is not that hard as it seems and at the same time it's not that easy also, so I advice any newbie to be careful when trading and do not rush things up. 😎

The trend is your friend.
pc8multifx (pc8multifx)
Dec 26 2009 at 15:49
posts 879

Elkart posted:
    It's always possible i guess to give someone a invitation link, but for me I just write the system off. Most probably it's a fat tail system.






I couldnt care less...😎

Fill or Kill (cateful)
Dec 26 2009 at 18:06
posts 87
Also I do not believe there is a profitable EA available in the public realm. Markets usually have negative expectancy because the bid/offer spread. So statistically, if your winning trades = losing trades, you have to be right greater than 50% to break even, in the long run. That's about what the best trader at Tudor can produce.

You also must overcome the volatility in randomness. Let's say your system has 70% win rate given win trades = losing trades. Giving certainties is 99.9%. N= log(1-.999)/ log(1-.70). solving this we get N=5.7. This number tells us that for every 1000 trades you will hit 1 stretch of 5 or 6 losers in a row AT LEAST. And trust me this will happen. Mathematically 99.9% certain it will happen. Check the systems page and read the reports of the top systems. You will see their win rate is very high, some 90% but at the cost of what? See their average win/loss pips. These systems will eventually run into a string of losses so great that their balance will be wiped clean.

So next time when you see a profitable EA, first check how long it has been in the market on a real account. Second check its average win/loss pips. Finally think for a minute, is it just experiencing short term volatility in a positive way?

Zoom out and go slow, try to figure out what the fed is going to do at its next meeting, try to catch the sentiment shift, look at how the market is reacting to certain news and economic data prints, look at where the money is flowing to, add to your winners and cut your losers, average in, this is my 'system'.

pc8multifx (pc8multifx)
Dec 26 2009 at 18:48
posts 879
I agree, profitable EAs don't get published/sold to everyone..no reason to do this. They are used to generate signals for providers or to trade managed accounts. And on first place ofcourse for the private joy😄

Elkart
Elkart
Dec 26 2009 at 23:36
posts 941
pc 8,

You should probably try and get over yourself. The longest history you have there is 7 months? The LTC guys wiped out after 60. Nobel prize winners I believe. And you and a 3 man team using free old Metatrader have done what they and all their billions couldn't? Don't think so mate...

Markets loves guys like you. Lawyers love guys like you. Gives them work.

Fillorkill

Nice post(s).

pc8multifx (pc8multifx)
Dec 26 2009 at 23:53
posts 879
If i would be so frustrated, like u, i wouldn't go to a forum anymore LOL

Minds are like parachutes, they work best when open ...

Forexellent (maanoo)
Dec 27 2009 at 18:48
posts 11
Well there are profitable EA's but they are used for private purposes only and not for reselling.

I have one friend who's a fund manager and using more than one EA for each market condition and it appears that his strategy is successful as he has been doing it for years now.

The one's which are published on the web are mostly useless, but not all of them if at all.

Good luck. 😉

The trend is your friend.
Fulltime247
Dec 28 2009 at 05:44
posts 131
Elkart posted: You should probably try and get over yourself. The longest history you have there is 7 months? The LTC guys wiped out after 60. Nobel prize winners I believe.


Ummmm.... The LTC guys weren't that smart. They basically started with smart arbitrage plays then starting taking wild and stupid risks just to keep profits growing and then OVERLEVERAGED that. They clearly expanded out of their expertise and thought they were invincible (Dont markets always do what WE think they will?) - Their Nobel Prizes only made the suckers run to signup. The EA strategy was stupid. In the end the Feds had to give em 3.63 BILLION to cover the mess and total losses were 4.6 BILLION. This is who you're holding up as EA wizards!? [https://en.wikipedia.org/wiki/Long-Term_Capital_Management ]

It ain't easy being Cheesy!
Forexellent (maanoo)
Dec 28 2009 at 13:03
posts 11
Lol nice post, they're like a typical newbie with no previous experience trying to get rich quick. 😁

The trend is your friend.
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