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By Michael ID some time ago""When I started backtesting systems, the initial entry condition was quite complex. I found, however, that as I bolted on more and more entry conditions in an attempt to improve things, system performance in fact decreased (worse drawdown and expectancy).Just for kicks one day, I replaced the complex entry condition with random entry (Entry Trigger = 1). System performance suddenly improved dramatically.Even since then, my "gold standard" for comparison of any system is random entry. If a condition can improve results over random entry, it is worthwhile. So far, I have only found 3 conditions on entry improve performance over random; CLOSE>Long Term Moving Average, enter on a white candle, and a three candle continuation pattern. Basically - price going up both long term and short term = BUY.Pondering on this brings me to the following conclusions;1. Indicators are a waste of time because they are all merely abstractions of PRICE and thus provide no additional information above and beyond that inherent in PRICE.2. PRICE is all that matters.3. The exit makes the money by biasing the system towards overperformers.4. A price which is going up is more likely to go up than one going down. That is the only prediction which has testable validity.******""*******""I am fascinated to find this just now in a search. I have been demo-ing on intraday futures indices for a few months now and have been looking for a high accuracy system to start my live trading with. What have I found? I have trialled several systems, some of my own creation, one I even paid $$ for some indicators......I test these with an even bracket methodology ie stop loss same dist from entry as profit target( in a range that is usually met within a minute or 3)....I have not yet found a system that will give me significantly above 50% over 50 consecutive trades. So I am now thinking I have been on the wrong track..just this morning I thought I should try simply entering (long or short, doesnt matter) 60 seconds following the close of the previous trade and see how it goes. The moral of the story for me, supported by Michaels views (above) too, is that I will now choose a simple entry system .....stop the search for high accuracy ......and focus almost entirely on trade management!
By Michael ID some time ago
""When I started backtesting systems, the initial entry condition was quite complex. I found, however, that as I bolted on more and more entry conditions in an attempt to improve things, system performance in fact decreased (worse drawdown and expectancy).
Just for kicks one day, I replaced the complex entry condition with random entry (Entry Trigger = 1). System performance suddenly improved dramatically.
Even since then, my "gold standard" for comparison of any system is random entry. If a condition can improve results over random entry, it is worthwhile. So far, I have only found 3 conditions on entry improve performance over random; CLOSE>Long Term Moving Average, enter on a white candle, and a three candle continuation pattern. Basically - price going up both long term and short term = BUY.
Pondering on this brings me to the following conclusions;
1. Indicators are a waste of time because they are all merely abstractions of PRICE and thus provide no additional information above and beyond that inherent in PRICE.
2. PRICE is all that matters.
3. The exit makes the money by biasing the system towards overperformers.
4. A price which is going up is more likely to go up than one going down. That is the only prediction which has testable validity.******""
*******
""
I am fascinated to find this just now in a search. I have been demo-ing on intraday futures indices for a few months now and have been looking for a high accuracy system to start my live trading with. What have I found? I have trialled several systems, some of my own creation, one I even paid $$ for some indicators......I test these with an even bracket methodology ie stop loss same dist from entry as profit target( in a range that is usually met within a minute or 3)....I have not yet found a system that will give me significantly above 50% over 50 consecutive trades. So I am now thinking I have been on the wrong track..just this morning I thought I should try simply entering (long or short, doesnt matter) 60 seconds following the close of the previous trade and see how it goes. The moral of the story for me, supported by Michaels views (above) too, is that I will now choose a simple entry system .....stop the search for high accuracy ......and focus almost entirely on trade management!
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