Your definition of a junk system!?
Jun 24, 2010 at 12:41
1,165 Görüntüleme
18 Replies
Apr 25, 2010 zamanından beri üye
7 iletiler
Jun 24, 2010 at 12:41
Hi everybody.
After taking an in depth look at a majority of the systems here i have come to a personal conclusion that most of them are absolute junk.
My criteria for a junk system is any one of the following:
- a drawdown of more than 10%
- a system that is traded without a stop loss or large negative floats
- a system where the trading history is hidden
Now i would like to ask for your opinions on what comprises a junk system?
Do you agree with the above?
Is there anything you would add?
Any replies will be greatly apreciated and i believe will benefit all users of the site when sourcing the junk from the golden nuggets.
Best regards.
Lee J Brown
After taking an in depth look at a majority of the systems here i have come to a personal conclusion that most of them are absolute junk.
My criteria for a junk system is any one of the following:
- a drawdown of more than 10%
- a system that is traded without a stop loss or large negative floats
- a system where the trading history is hidden
Now i would like to ask for your opinions on what comprises a junk system?
Do you agree with the above?
Is there anything you would add?
Any replies will be greatly apreciated and i believe will benefit all users of the site when sourcing the junk from the golden nuggets.
Best regards.
Lee J Brown
forex_trader_7
Aug 01, 2009 zamanından beri üye
941 iletiler
Jun 24, 2010 at 13:08
(Jun 24, 2010 at 13:09 düzenlendi)
You can't look at DD in isolation, if something draws down 30% but does 500% per annum, it's acceptable. Then you can divide trade sizes by 10 and do 3% for 50%.
I do agree though, 99% are not viable systems. The locked systems are no good, the negative floats are no good, super performers are no good. If it's to good to be true, then it is indeed to good to be true....
And lastly I don't know how people jimmying the system, but clearly they are. You can take nothing at face value here or on any website. Have to have live open access and even then you can get burned. Sometimes people get lucky and close out the danglers, takes a while then to see the new ones.
And never ever hand money over via paypal or something stupid like that. Either managed account or nothing.
I do agree though, 99% are not viable systems. The locked systems are no good, the negative floats are no good, super performers are no good. If it's to good to be true, then it is indeed to good to be true....
And lastly I don't know how people jimmying the system, but clearly they are. You can take nothing at face value here or on any website. Have to have live open access and even then you can get burned. Sometimes people get lucky and close out the danglers, takes a while then to see the new ones.
And never ever hand money over via paypal or something stupid like that. Either managed account or nothing.
Apr 25, 2010 zamanından beri üye
7 iletiler
Jun 24, 2010 at 14:23
Hi Elkart.
Thank you for your response, although i do understand your point of DD in relaton to return P.A i personally still believe 10%+ DD is unacceptable especially in a managed account although as with many things a small amount of flexability should be allowed in certain circumstances.
What is your opinion on automated versus manual trading?
I personally would never take an automated approach to trading nor would i deem any kind of automated system credible but i would again like to hear other opinions on this.
Best regards
Lee J Brown
Thank you for your response, although i do understand your point of DD in relaton to return P.A i personally still believe 10%+ DD is unacceptable especially in a managed account although as with many things a small amount of flexability should be allowed in certain circumstances.
What is your opinion on automated versus manual trading?
I personally would never take an automated approach to trading nor would i deem any kind of automated system credible but i would again like to hear other opinions on this.
Best regards
Lee J Brown
forex_trader_1819
Oct 18, 2009 zamanından beri üye
230 iletiler
Jun 26, 2010 at 11:08
(Jun 26, 2010 at 11:23 düzenlendi)
I would say that not every person is trying to sell themselves on this site. Some people just display their accounts so their friends can check on their weekly performance. Some people don't need to trade for other people (or sell signals) to make their money. Not that I have anything against people selling themselves. What I do have an issue with is that those that are selling themselves seem to delete blown accounts therefore not showing their true trading history.
forex_trader_7
Aug 01, 2009 zamanından beri üye
941 iletiler
Jun 26, 2010 at 11:14
(Jun 26, 2010 at 11:18 düzenlendi)
Lee,
I think something like 50% or 80% of all trades now days are automated. It's what computers were designed to do and you can see now with the HFT that's happening that's not a question of man vs. machine anymore. It's now about the fastest machine.
Down side of that is as someone pointed out after the flash crash a month or so ago that the next LTC will take 5 minutes to happen. We can go from stable economies to world changing depression faster than I can make a cup of soup if the wrong machine goes haywire. Something like 25% of the Dow Jones volumes are traded by one guy...think about that!!
Automated trading has it's place. A pyramiding system switched onto gold for example during the Brown bottom would have made a small fortune by now. Same can be said for oil when it was at 30 last year...doesn't have to be full auto, but systems can take care of the drudge work, especially on commodities where it's only going one way...
I think something like 50% or 80% of all trades now days are automated. It's what computers were designed to do and you can see now with the HFT that's happening that's not a question of man vs. machine anymore. It's now about the fastest machine.
Down side of that is as someone pointed out after the flash crash a month or so ago that the next LTC will take 5 minutes to happen. We can go from stable economies to world changing depression faster than I can make a cup of soup if the wrong machine goes haywire. Something like 25% of the Dow Jones volumes are traded by one guy...think about that!!
Automated trading has it's place. A pyramiding system switched onto gold for example during the Brown bottom would have made a small fortune by now. Same can be said for oil when it was at 30 last year...doesn't have to be full auto, but systems can take care of the drudge work, especially on commodities where it's only going one way...
Aug 20, 2009 zamanından beri üye
266 iletiler
Jun 26, 2010 at 11:52
(Jun 26, 2010 at 11:52 düzenlendi)
Lee J Brown,
I have to say, I understand the desire to weed out the weak systems, however, not one of your definitions makes a system junk.
I am very happy with my system and it has, regrettably, a drawdown of 11.2%......I expect this will hit 20% or even 30% one day. You may choose to disagree but I believe Elkart was right when he said this is a risk vs reward game.
What do you define as trading without stoploss? Is it the absence of a server side stoploss? From an execution point of view there are better ways to exit a trade than with a hard SL on your broker's server.
I personally don't like large floating drawdowns, so I shall restrict my comment to the fact that just because a trading style does not suit me, does not invalidate it.
Finally, the locked trade issue. I lock my trades because I don't want, or need traders commenting on or analysing my trades. People that need to see the figures or performance can see everything they need to see wihout having to analyse open trades. What could I possibly be hiding???? Do I trade high risk from time to time? Yes, I do. However your idea of big risk and my idea of big risk are 2 separate things. Do I take big losses from time to time??? Of course I do.....I believe you can see it all in the charts......and unlike you, I don't hide my equity.
IMHO there are ONLY 2 things that count in this game.......time and real money. Show me a profitable live account older than 6 months and I will listen.
Oh yeah, one more thing, I only trade automated.
I have to say, I understand the desire to weed out the weak systems, however, not one of your definitions makes a system junk.
I am very happy with my system and it has, regrettably, a drawdown of 11.2%......I expect this will hit 20% or even 30% one day. You may choose to disagree but I believe Elkart was right when he said this is a risk vs reward game.
What do you define as trading without stoploss? Is it the absence of a server side stoploss? From an execution point of view there are better ways to exit a trade than with a hard SL on your broker's server.
I personally don't like large floating drawdowns, so I shall restrict my comment to the fact that just because a trading style does not suit me, does not invalidate it.
Finally, the locked trade issue. I lock my trades because I don't want, or need traders commenting on or analysing my trades. People that need to see the figures or performance can see everything they need to see wihout having to analyse open trades. What could I possibly be hiding???? Do I trade high risk from time to time? Yes, I do. However your idea of big risk and my idea of big risk are 2 separate things. Do I take big losses from time to time??? Of course I do.....I believe you can see it all in the charts......and unlike you, I don't hide my equity.
IMHO there are ONLY 2 things that count in this game.......time and real money. Show me a profitable live account older than 6 months and I will listen.
Oh yeah, one more thing, I only trade automated.
Wealth Creation Through Technology
Sep 04, 2009 zamanından beri üye
879 iletiler
Jun 26, 2010 at 12:26
(Jun 26, 2010 at 12:27 düzenlendi)
Regards all the DD paranoia: For what do you think there is a certain amount of capital in the account?
Its there to be used, its there to allow the trade to breath and its there to survive bad times/trades....for good reasons its called risk capital 😉
https://www.myfxbook.com/members/pc8multifx/pc-u-j-max/4371
Its there to be used, its there to allow the trade to breath and its there to survive bad times/trades....for good reasons its called risk capital 😉
https://www.myfxbook.com/members/pc8multifx/pc-u-j-max/4371
forex_trader_1819
Oct 18, 2009 zamanından beri üye
230 iletiler
Jun 26, 2010 at 12:49
(Jun 26, 2010 at 12:51 düzenlendi)
compuforexpamm posted: IMHO there are ONLY 2 things that count in this game.......time and real money. Show me a profitable live account older than 6 months and I will listen.
Six months? I'd have to say at least a year. And if I was going to put my money with anyone, I'd want at least 2-3 years of results.
Aug 20, 2009 zamanından beri üye
266 iletiler
Jun 26, 2010 at 13:00
Yeah, I take your point, but perhaps reread the title of the thread. The topic is not what is required before you place your money with some-one but how to tell if a system is junk or not.
Wealth Creation Through Technology
forex_trader_1819
Oct 18, 2009 zamanından beri üye
230 iletiler
Jun 26, 2010 at 13:16
(Jun 26, 2010 at 13:38 düzenlendi)
Yeah, I know - I went off on a tangent. I was just surprised that you would listen to someone with a profitable account that was only 6 months young. I can show you 10 of my own that are 6 months or older and are profitable but I'm not selling myself 😀 And I'm a manual trader and I totally agree with your comment on locked trades. Everyone is an expert on other peoples' trades except their own. How people go about percentage gains is their own business. The equity curve and other statistics available on the page provide more than enough information. Time operated/percentage gain on the account is the main criteria for me with time operated being the more important. Also the account has to be actively traded (not sitting dormant for months on end).
forex_trader_1819
Oct 18, 2009 zamanından beri üye
230 iletiler
Jun 26, 2010 at 14:51
If you do a search on systems that are at least 1 year old, real and traded within the last week you get 42 hits. That narrows down the search. Then you have to uncustomise some of these accounts as they show profit whereas they are really in loss over the period. You also can't specify drawdown as a condition because Oanda accounts don't give the correct drawdown.
Oct 28, 2009 zamanından beri üye
1435 iletiler
Jun 26, 2010 at 16:51
You need to be careful with that as well. My own system is showing as at least one year old and yet it isn't, but the account was an account I used for something else previously and I now have a custom date filter on it. So not all accounts that show up as a year old will necessarily be one year old
11:15, restate my assumptions: 1. Mathematics is the language of nature. 2. Everything around us can be represented and understood through numbers. 3. If you graph these numbers, patterns emerge. Therefore: There are patterns everywhere in nature.
Nov 18, 2009 zamanından beri üye
735 iletiler
Jun 28, 2010 at 09:23
(Jun 28, 2010 at 09:24 düzenlendi)
Strange systems are those where there are no whipsaws, just monotonic rise /probably losses not taken/.
Also one-hit wonders (10000000 % profit with one trade, then 0.000001% profit monthly average)
Let's not forget about overleveraged gamblers (50-100% profits a month, with overleveraged positions)
To be honest it's only Ramdas_FX system here that made a lasting impression... unfortunately he has hidden his graph some time ago.
Also one-hit wonders (10000000 % profit with one trade, then 0.000001% profit monthly average)
Let's not forget about overleveraged gamblers (50-100% profits a month, with overleveraged positions)
To be honest it's only Ramdas_FX system here that made a lasting impression... unfortunately he has hidden his graph some time ago.
Surround yourself with people whose eyes light up when they see you and who have no agenda for your reform.
forex_trader_1819
Oct 18, 2009 zamanından beri üye
230 iletiler
Jul 20, 2010 at 18:40
speki posted:
Strange systems are those where there are no whipsaws, just monotonic rise /probably losses not taken/.
Ewwww, I can't believe you've said that. You know we all have our own way of extracting money from this market. Okay, I've just checked - I see you had a bad day on 28 June - I'll let you off.
Chin up 😀
Nov 18, 2009 zamanından beri üye
735 iletiler
Jul 21, 2010 at 08:58
Would you believe a black couple can have a white baby?
Haven't you figured, I was talking about 2 figure gains a month on a 2 figure account.
Haven't you figured, I was talking about 2 figure gains a month on a 2 figure account.
Surround yourself with people whose eyes light up when they see you and who have no agenda for your reform.
forex_trader_1819
Oct 18, 2009 zamanından beri üye
230 iletiler
Jul 21, 2010 at 10:18
Nope, didn't figure but at least they are brave enough to show their equity 😲 Guess that rules me out then - the 2 figure gains a month - dreams are free - rofl. This chop fest is putting me to sleep. My accounts are gonna need a defibrillator soon. Think I'll come back in September.
Nov 18, 2009 zamanından beri üye
735 iletiler
Jul 21, 2010 at 11:14
Yeah, maybe the only reliable measure is how long the punter survived active trading. Everything else is a matter of taste... but that's alright. We all have our own preferences...
Surround yourself with people whose eyes light up when they see you and who have no agenda for your reform.
Aug 02, 2010 zamanından beri üye
51 iletiler
Aug 02, 2010 at 13:24
> My criteria for a junk system is any one of the following:
> - a drawdown of more than 10%
This is not generally true. For example a person who has little money might want to have a drawdown like 30-40% to quickly get more money. Its an urgent money issue then. It does not mean that they would be trading a huge fund with that risk. They can easily drop that risk if needed; its just changing one parameter in their excel sheet ('factor'/'risk' parameter).
This is true, if they are trading a very big fund, like $1000 000. Then they should be aiming 10%. But I mean that sometimes people have valid reasons to use higher risk.
> - a system that is traded without a stop loss or large negative floats
This is true if there is no plan. But lets remember that one valid plan is to run like 20 accounts and if one of them goes like -70% then they stop that account. If this is backtested and properly calculated risk, then its like any trading system. I dont see any difference with -20 stop loss system, if just everything is perfectly though through.
> - a system where the trading history is hidden
But a fact that somebody does not show their history does not logically mean that the system itself is junk! In this case needs to ask the person to show the history at some point... Obviously if they do not want to provide it, then its good to be suspicious.
> - a drawdown of more than 10%
This is not generally true. For example a person who has little money might want to have a drawdown like 30-40% to quickly get more money. Its an urgent money issue then. It does not mean that they would be trading a huge fund with that risk. They can easily drop that risk if needed; its just changing one parameter in their excel sheet ('factor'/'risk' parameter).
This is true, if they are trading a very big fund, like $1000 000. Then they should be aiming 10%. But I mean that sometimes people have valid reasons to use higher risk.
> - a system that is traded without a stop loss or large negative floats
This is true if there is no plan. But lets remember that one valid plan is to run like 20 accounts and if one of them goes like -70% then they stop that account. If this is backtested and properly calculated risk, then its like any trading system. I dont see any difference with -20 stop loss system, if just everything is perfectly though through.
> - a system where the trading history is hidden
But a fact that somebody does not show their history does not logically mean that the system itself is junk! In this case needs to ask the person to show the history at some point... Obviously if they do not want to provide it, then its good to be suspicious.
Freedom is a paradox; To be free to play beautiful music, you have to submit to the rules of music.
Aug 02, 2010 zamanından beri üye
51 iletiler
Aug 02, 2010 at 13:36
LJBfinancial posted:
My criteria for a junk system is any one of the following:
- a drawdown of more than 10%
I do not agree with this for another reason. Let me give an example. Lets say that we have an excellent trader (pip wise). He starts with 100 capital. Lets say that the plan is to share the profits with a client after 3 months. Trader makes first 1000% profit in first month. Capital becomes 1100. Then he has 50% drawdown in second month. His capital goes down to 550. Then he makes another 10% profit. Total money to share: 600. Total profit 500%. The client never knows that he made that 50% dip, because the agreement is that if it goes negative against the starding capital , he needs to report. But he lost from his profit, so he does not need to report. Is this trader good is he does this over and over again year after year? Surely he is! I would give him all my money immediately!! :). But he had 50% drawdown (and maybe many times per year) ....
Freedom is a paradox; To be free to play beautiful music, you have to submit to the rules of music.
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