Dump it Here

[Skate]

3. The Big Game Hunter Strategy
The Metaphor: As the image suggests, this is about stalking and taking down a massive, high-value target. It requires immense research, patience, and a single, well-placed, high-conviction shot. The hunt is difficult and often fails, but one success is transformative.

The Philosophy: "Go for the life-changing win."
This is a speculative, high-risk, high-reward strategy. It involves concentrating capital on a few carefully selected opportunities that have the potential for explosive returns.

Skate.

 

[Skate]

AI can always tell a story
I uploaded an overnight 'line chart' of the S&P 500 into an AI model to explain the squiggly line to me. AI's response is a long read, and frankly, I didn't think it would ever shut up.

This is AI's response
Let's look at this chart not as a squiggly line, but as a story of a single day, filled with fear, hope, and a dramatic turnaround. Here is the story of what happened to the S&P 500, based on the pattern in your chart.

The Day the Market Held Its Breath
The Calm Before the Storm (Before 10 am). The day began with quiet optimism. Traders came to their desks feeling pretty good. The previous day had ended on a positive note, and the market opened high, hovering around 6,260. It felt like it might be another steady day. But everyone was waiting for one thing: the 10 am economic data release. This was expected to be a report on inflation or consumer confidence, a number that could change everything.

The Shock (10 am - 11 am)
At exactly 10 am, the news hit the wires. It was worse than expected. Let's say it was an inflation report that came in "hot," meaning prices were rising faster than anyone wanted.

Instantly, fear rippled through the market. A hot inflation report means the Federal Reserve might have to raise interest rates more aggressively to cool the economy down. Higher interest rates are like kryptonite for the stock market—they make borrowing more expensive for companies and make safer investments like bonds more attractive.

You can see this moment of panic on the chart as a steep cliff. Automated trading algorithms, programmed to sell on bad news, kicked in immediately. Human traders followed, rushing to sell before things got worse. The S&P 500 plunged sharply for an hour, tumbling from its morning high all the way down below 6,240.

The Standoff (11 am - 1 pm)
By 11 am, the initial panic selling was over. The market hit its low for the day and bounced a little. But it didn't recover. For the next two hours, the S&P 500 just... drifted.

This was a period of intense uncertainty. Think of it as a tug-of-war.

• The Bears (the sellers) were saying, "The inflation news is terrible! This is just the beginning of the slide."
• The Bulls (the buyers) were arguing, "The sell-off was an overreaction. This is a great chance to buy good stocks at a discount."

The line on the chart moves sideways with a lot of jagged, nervous energy. No one was sure who would win the argument, so the market was stuck in limbo, looking for its next signal.

The Turnaround (1 pm - 3 pm)
Around 1 pm, a new piece of information entered the story. It wasn't a big economic report, but something more subtle. Perhaps a well-respected Federal Reserve official gave a speech and used language that was less aggressive than the market feared. He might have hinted that they would be "patient" or "data-dependent," calming the fears of immediate, drastic rate hikes.

This was the signal the bulls were waiting for. A wave of relief washed over the market. The narrative shifted from "The sky is falling!" to "Okay, maybe things aren't so bad after all."

You can see the change in direction on the chart. The line begins a slow, steady, confident climb. It's not a frantic rally, but a gradual grind upwards as more and more investors decided it was safe to get back in the water.

The Final Push (3 pm - 4 pm)
The last hour of trading is often the busiest. As the positive momentum from the afternoon built, a new feeling took over: FOMO (Fear Of Missing Out). Investors who had been sitting on the sidelines all day saw the market recovering and didn't want to be left behind.

This triggered a final, stronger wave of buying. The climb became steeper as the market tried to reclaim all the ground it had lost in the morning. By the time the closing bell rang at 4 pm, the S&P 500 had made a heroic recovery, finishing the day right back near the 6,260 level where it started.

In Summary:
The chart tells a classic story of a "V-shaped" or "U-shaped" recovery day. It was a day of two halves: a morning dominated by fear (the inflation report) and an afternoon driven by hope (the reassuring comments and recovery). The market was knocked down by bad news but showed its resilience by climbing all the way back up by the end of the day.

Skate.

 

[Skate]

Coding a strategy
Let me give you an analogy - I don’t care how often you read a Boeing 747 instruction manual or even a Helicopter instruction manual – I can guarantee you that in the end you will not be a good pilot – even if you get it off the ground there would be no guarantee that the plane or helicopter would be safe under your control.

System Trading
The final phase of developing a strategy is "paper trading". Paper Trading is an essential bridge between theory and real-world application. Think of it as a "flight simulator" for a pilot. You would never let a pilot fly a real 747 with passengers just because they've read the instruction manual.

It's the same when it comes to trading
You use paper trading to prove that your strategy has merit and, just as importantly, to prove that you have the discipline to follow it. You use paper trading as the ultimate expression of that discipline, removing the human emotion from the execution process to ensure your validated edge is deployed with maximum consistency and efficiency.

Footnote
The goal of trading is not to lose money. Winning is considered to be a bonus.

Skate.

 

[Skate]

Paper Trading: Bridging Theory and Practice
Paper trading is the vital link between trading theory and live trading. Paper trading enables you to test your strategy’s effectiveness and build the discipline required to execute it consistently without having funds at risk.

Everything old is new again
I've revived and refined four classic trading strategies. Gemstones, HappyCat, Big Game Hunter, and Clydesdale for paper trading. While these strategies have proven successful historically, their future performance remains uncertain, as with all trading systems. Only time will reveal their true potential.

AI-Powered Strategy Showdown
Four advanced AI models analyse and rank the Gemstones, HappyCat, Big Game Hunter, and Clydesdale strategies, pinpointing which strategy is the "best balance" of performance, risk, and consistency.

Skate.

 

[Skate]

Which of the four trading strategies comes out on top?
Four AI models break it down: Gemstones Gold vs HappyCat vs Big Game Hunter vs Clydesdale.

Gemstones Gold Strategy
The Gemstones Gold Strategy shines as the top performer among Gemstones, HappyCat, Big Game Hunter, and Clydesdale in our AI-driven evaluation. Designed for risk-averse traders, it delivers a robust 77.34% net profit and a 20.75% annual return with an impressively low maximum drawdown of just -8.93%. Its high efficiency, minimal transaction costs, and strong payoff ratio ensure smooth equity curves and rapid recoveries, prioritising capital preservation while compounding returns effectively. Compared to the slightly more active HappyCat, which offers marginally higher profits but increased risk, Gemstones stands out for its exceptional balance of performance, risk control, and consistency, making it ideal for long-term growth with reduced stress.

Skate.

 

[Skate]

The HappyCat Strategy
The HappyCat Strategy ranks second in our AI-driven evaluation, delivering the highest net profit among Gemstones, Big Game Hunter, and Clydesdale, with a strong 350 trades over the period. Its impressive returns come with moderate risk, supported by a low maximum drawdown and high recovery factor, making it ideal for traders comfortable with active strategies. However, its high trading frequency increases costs, suggesting potential for optimisation to boost efficiency. The HappyCat’s robust risk-adjusted metrics and ability to sidestep major market downturns make it a compelling choice for consistent growth with controlled risk. High returns with room for refinement.

Skate.

 

[Skate]

The Big Game Hunter Strategy
The Big Game Hunter ranks third in our AI-driven evaluation, a bold "home run" strategy chasing massive wins with a low win rate. It delivers high profits through infrequent but significant trades, appealing to risk-tolerant traders. However, its higher drawdowns, frequent small losses, and lower risk-adjusted returns compared to Gemstones and HappyCat make it less consistent. With robust position sizing and risk management, it suits those prioritising big payoffs over smooth equity growth.

Skate.

 

[Skate]

The Clydesdale Strategy
Clydesdale ranks last in our AI-driven evaluation, delivering decent returns but struggling with high risk and inefficiency. Profitable but Risky. As a trend-following strategy, it achieves solid profits with a good payoff ratio despite a sub-50% win rate. However, its significant drawdowns and high trading costs make it less appealing than Gemstones, HappyCat, and Big Game Hunter, especially for risk-averse traders. While it outperforms Buy & Hold, Clydesdale requires substantial optimisation to improve risk management and compete effectively.

Skate.

 

[ShareSuccess]

G'Day skate.....Great Content mate, very educational to a numpty such as myself when it comes Trading

i have come up with a crazy idea to trade & have started the process of paper trading the idea & my portfolio of 20 stocks will be Completed soon.

My Target Goal/ ROI will be to Hopefully generate Pretty much the Market or 10% Net profit & on the sale of a stock i will compound that into my next stock purchase.

it's only a crazy idea at the moment, but has already Bought & sold a stock before i have reached my allocation of 20 stocks for a nice return of 13.5 % in 1 Day....Wooooo hoooo there is Hope ha ha

The Basics of the idea are to Purchase stocks that are performing Positively (Momentum) & stocks that are performing Negatively ( Contrarian) so there may be a Balance in how some perform better in the shorter time frame & others will hopefully perform better over a longer period.

Should i go through with the idea i am going to start small with $10,000 which will equate to 20 stocks x $500 so in affect i'm not going to end up in the poor house ha ha

After All this.....What am i going to call this Strategy:....The "YING-YANG" Trading Strategy as according to my AI friend it, Ying Yang could represent balance, harmony, and the union of opposing forces to achieve success.

 

[Skate]

Should i go through with the idea i am going to start small with $10,000 which will equate to 20 stocks x $500 so in affect i'm not going to end up in the poor house ha ha

@ShareSuccess, I love the enthusiasm and originality behind your “Yin-Yang” strategy!

Don't Risk Capital
Starting small is wise, but paper trading first is even better. Paper Trading gives you time to refine your approach without risking capital, and the enjoyment level is right up there.

Quick Tip
Focus on process, not profit. Markets are unpredictable, and no strategy works all the time. Consistency, patience, and learning from every trade will take you further than chasing quick wins.

Mindset Over Money
Improvement beats outcome. I spent years studying before placing my first trade, and I’ve learned that slow, steady, and methodical always wins out in the long run.

You’re thinking the right way, keep going and best of luck, mate!

Skate.

 

[Skate]

A lot of us have tried to perfect a Trading System, most people have failed...

This is a forum where everybody can express their mind.

I enjoyed reading @bettamania thread on "My Simple Thing," which showcases the results of several trading systems. It's refreshing to see transparent demonstrations of working systems. However, backtesting often overstates real-world performance, as developing reliable trading system code is complex and can yield misleading results, even after rigorous testing.

Paper trading is critical for any trading system
Paper trading allows ideas to mature over time. While time-consuming, paper trading reveals a system's true value before real capital is at risk, offering invaluable insights into its practical performance.

Consistency is key during the development phase of a trading system
Breaking code into manageable, modular blocks simplifies the process and enhances understanding. Even when live trading, start with small positions to gauge the system's behaviour and, more importantly, your own reactions when outcomes deviate from expectations.

Skate.

 

[Skate]

IMO both BO are good system. bit I prefer toward Bband

System Development
When developing a trading system, you'll notice that many systems are trend-following by design. Markets often move within defined bands or channels, reflecting price fluctuations.

Channel Breaks
A breakout above or below these channels can signal market sentiment, providing a potential entry point for a trade. For example, entering on an upside breakout and exiting when the price breaks below the lower channel can form the basis of a simple strategy.

The Game of Probabilities
However, trading is inherently a game of probabilities. The challenge with technical analysis lies in identifying genuine, repeatable patterns that offer a reliable edge. This isn't about "voodoo magic" but about rigorous testing and validation to ensure your system can adapt to real-world market conditions.

Skate.

 

[Skate]

Trading Channels - Capturing Breakouts with Confidence
Trend-following systems with price channels are a powerful tool. A breakout above or below a channel signals potential entry points, while an exit can be triggered when the price falls below the lower channel. This simple strategy leverages market momentum but requires discipline to execute effectively.

Define the Channel
Use tools like Donchian Channels or Bollinger Bands to map price boundaries. Enter a trade on a confirmed breakout above the upper channel and close the position when the price breaks the opposite channel or hits a predefined stop-loss, stale-stop, trailing stop or when a profit target is hit.

Skate.

 

[Skate]

From Idea to Execution
Every trading idea starts with a spark, but success lies in rigorous testing to ensure the idea holds up historically. The next process before live trading is to paper trade the idea to validate it in real-time conditions. Only after consistent results should you consider live trading with small positions.

Trading can be a solitary journey with high rewards and intense emotions
When real money is on the line, every price swing can feel like a rollercoaster, shifting from elation to anxiety in seconds. For new traders, this emotional intensity is often unexpected. "Experience" teaches you to manage these emotions, but starting small and sticking to your system’s rules can help you stay grounded from the outset.

Here is a Tip
Stay Objective. Let your system, not your emotions, dictate entries and exits. Start small and trade minimal positions to build confidence without overwhelming stress. This game is all about "review and refinement". You do this by regularly analysing your trades to identify patterns in your performance and emotional responses.

Skate.

 

[Skate]

Trading Multiple Systems - Mastering the Art of the Exit
Over years of trading, I’ve traded multiple systems, with trend-following becoming my passion. The real profits in trading lie in riding trends, where the market’s momentum can deliver significant rewards. While entering a trend is relatively straightforward, exiting with a profit is the toughest challenge in system trading.

Why Exits Matter More Than Entries
Conventional wisdom often fixates on finding the perfect entry, but exits are where profits are secured. Not every trend skyrockets to the moon, but trends occur regularly. The key is to jump on a trend and ride it until it goes stale, or, more critically, exit when the trend turns against you.

Skate.

 

[divs4ever]

System Trading
The final phase of developing a strategy is "paper trading". Paper Trading is an essential bridge between theory and real-world application. Think of it as a "flight simulator" for a pilot. You would never let a pilot fly a real 747 with passengers just because they've read the instruction manual.

It's the same when it comes to trading
You use paper trading to prove that your strategy has merit and, just as importantly, to prove that you have the discipline to follow it. You use paper trading as the ultimate expression of that discipline, removing the human emotion from the execution process to ensure your validated edge is deployed with maximum consistency and efficiency.

Footnote
The goal of trading is not to lose money. Winning is considered to be a bonus.

Skate.

i find trading useful to detect failures in my strategy that weren't immediately obvious . before testing the strategy with real cash and real market action . ( those bots can really mess-up momentum )

it also teaches you how if you applied that strategy correctly ( the 'perfect opening buy ' and the completely sold exit trade ) how you would have gone .

sure lost time on failed strategies is disappointing but losing cash on those same strategies is even more disappointing

 

[Skate]

Precision Exits
Designing a reliable exit strategy is a developer’s nightmare, as it may perform well in some market conditions and falter in others. Remember, as I said previously, trading is a game of probabilities, and a robust exit plan tips the odds in your favour.

Focus on Exits
Test exit rules rigorously, consider trailing stops, time-based exits, stale stops, take profit stops or where your position breaks below a channel. At the moment, I'm discussing channel trading, but with any system, it's a requirement that you backtest your strategy to death before moving on to paper trading. Paper trading, ensure consistency.

Adapt to Conditions
Recognise when market volatility or trend strength affects your system’s performance. Adjust exit parameters to balance risk and reward. Stay disciplined, stick to your system’s rules, especially during losing streaks, to avoid emotional decisions that derail your strategy.

Here's a Tip
When developing exit strategies, prioritise simplicity and repeatability. A complex exit rule may look perfect in backtests but fail in live trading due to the unpredictability of the markets. How you approach exits in your trading systems will determine your success IMHO.

Skate.

 

[Skate]

AI has become a very useful analysis tool

@Sdajii goes on to say: "I have had plenty of experiences similar to this, where it completely fails at the most basic of calculations and logic exercises"

AI in Trading - A Powerful Tool with Limits
AI has emerged as a valuable tool for trading analysis, but it’s not without flaws. As @Sdajii recently noted, “I have had plenty of experiences similar to this, where [AI] completely fails at the most basic of calculations and logic exercises.” - This highlights a critical point for traders using AI in their systems.

AI’s Strengths and Weaknesses
AI never lacks an answer. It’s designed to respond based on patterns in its training data or internet consensus. However, this can lead to inaccuracies. For example, if you ask, “What colour do you get when mixing black and white paint in equal proportions?” and the internet suggests “yellow,” AI might confidently give that incorrect response. Its output depends heavily on how it interprets your query, not necessarily on objective truth.

Skate.

 

[divs4ever]

since we are talking trading ...

and some will be tempted to trade ETFs what about the effect of market makers in your trading moves

do traders understand the market makers themselves in their effort to 'generate liquidity '

now this issue doesn't effect me because my positions are usually small ( and even tiny ) but traders moving $10k and even $100K

how painless are those entries and exits

 

[Skate]

How to Use AI Effectively in Trading
To harness AI’s potential for trading system development, you need to ask precise questions with narrow, specific queries to yield better results than broad or vague ones.

Verify AI Responses
Taking AI response as gospel is a fool's errand. All AI’s responses need to be cross-checked against trusted data sources or manual calculations, especially for critical trading decisions.

Use AI as a Starting Point
Leverage AI for idea generation, pattern recognition, or data analysis, but always validate through backtesting and paper trading (as discussed in earlier posts).

Avoid Over-Reliance
AI can’t replace the discipline and emotional control needed for successful trading systems. When using AI to analyse trends or channels (like those in my previous posts), frame your questions tightly. Then, test the results rigorously to ensure reliability.

Skate.