ALSI futures trading systems

[SimonPB]

http://www.tickertalk.co.za/blog.php?user=davor&blogentry_id=2719

[Ninja]

Simon...where can I find the details re system A and B that are discussed as a reference point ion this article....couldn't find them on page 88......

[SimonPB]

I don't know .. I assume the 7/21 MA's .. guessing he will go into more detail sopn enough ??

[SimonPB]

I don't know .. I assume the 7/21 MA's .. guessing he will go into more detail sopn enough ??

[Rams]

Win% approximately 40%, yet profitable: Interesting....

[SimonPB]

you don't need a high win percentage .. I know of even a little lower then 40% ..

[Rams]

That's also very interesting , I know you did mention in your course that can be as low as 30% or that the best traders win ratio is about 30%. What about probability of successful trades. I see your system keeps out of a lot of trades where there is intersection of MA but no engulfing candles and vice versa.So does the system give you high probabilty trades stacking the odds in your favour with large sample size and a satisfactory reward/risk ratio?

[SimonPB]

yes to all ..

[Rams]

Thank you Simon.

[Pluto]

You know I have held my tongue long enough on this - I sat through your Index Futures course Simon and cringed at your engulfing candle system win ratio of 40% I think it was. Sure this can be profitable, but your execution has to be immaculate - one slip and you are dead. If your win ratio is only 40%, in my mind you haven't figured out what is the driver behind your system - you haven't stacked the probabilities in your favour - you actually don't know what you are doing and are behaving like a Pavlov dog. I say, and this is what I have done, sharpen up your system so that your win ratio is > 80% - so much easier to handle your emotional state when you operate like this. There - I have said it - not trying to be smarter than the rest - but there is another truth out there!

[Spoegs]

My two cents worth - (and I haven't attended any of the courses) - 40% win rate might be fine for a very mechanised system that doesn't care, but you have to admit that you have to be a bit of a masochist if you're comfortable with losing trades 60% of the time. Maybe the point is that you need to be comfortable to accept this for certain timeframes over which you trade, but tolerating this in the long run would be bloody difficult to tolerate indefinitely. I suppose it depends on what each individual trader is comfortable with.

[Rams]

My 3 cents worth and you all know this if you gambled or attended Simons courses. The odds are stacked against you because you can never predict market action correctly consistently.So your 80% win ratio will eventually wittle away to 40% with a large enough number of trades. But this is the most important thing: your 80% win ratio can also be unprofitable if losses are not managed properly.So win ratio not as important as Trade managament...I think.Over to Simon...

[SimonPB]

I never said my win ratio was 40% for any of my systems .. I said I know of people who have 40% .. and find me the person with an 80% win ratio and you have found a liar ..

[SimonPB]

that's the more important point .. win ratio part of a bigger picture that depends on costs, slippage, spreads, winner size, loser size .. etc ..

[Ninja]

Simon.....when can we expect to see justonelap up and running?

[SimonPB]

14 March 2011 ..

[Spoegs]

So what you're implying is that position sizing (potential risk to reward ratio) and exit strategy (cutting losses and taking profit) are probably the key issues, get those mostly right and your win/loss ratio becomes less important?

[SimonPB]

yes no maybe .. cut losers aggressively and let winners run and your win/loss ratio is still part of the picture, but doesn't need to be massive ..

[Spoegs]

Assuming you don't have a mountain of capital to risk, cutting losses and risk management which hopefully increases your chances of surviving to trade another day in my mind are crucially important. The other question I suppose is - Do you have a sufficient amount of capital to trade a particular system. My thinking would be that with a bigger capital base you'd have more flexibility to trade systems (and profitable at that) with lower win rates. I'm starting to sound like someone from a Van K Tharp cult.

[G_V_V]

There is one very important fact to remember about trying to devise a system that will be profitable. It is misleading to try to devise a system based on historical facts. It is completely a different set of results when you are in the market than when you are not in the market. The mere fact when you are in the market will change the future results to a different set of result if you are not in the market. This scientific phenomena is brought about due to this fact: Uncertainty principle or indeterminacy principle. In quantum mechanics, the principle that it is impossible to know with unlimited accuracy the position and momentum of a particle. The principle arises because; in order to locate a particle exactly, an observer must bounce light (in the form of a photon) off the particle, which must alter its position in an unpredictable way.