Naive beginner's strategies. - page 19
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If you successfully "chopped the dough" on two MAs - then there really is nothing naive about this strategy. But still, it's the beginners who love it.
I don't know whether to write it off the list of "naive" or not...
From an interview with Ed Seykota:
- How did your trading program perform in practice?
- The program worked great. The problem was the management, who couldn't resist tweaking the system's signals. I remember, for example, how once the program gave a signal to buy sugar, which was then at 5 cents. The bosses thought the market was already overbought and ignored the signal. When the market continued to rise, a new decision was made to buy at the first 20-point pullback [100 points is 1 cent]. But the pullback did not materialize, and then that decision was reversed to buy on the first 30-point reaction. But the market was persistently moving up without a significant pullback, and the bosses changed the pullback level to 50 and then 100 points. In the end, when the sugar was about 9 cents, it was decided that the market was bullish, and therefore we had better buy before prices went much higher. And at that level, we opened long positions in managed accounts.
As you can guess, the market soon peaked. Management compounded their mistake by ignoring the sell signal as well - and it could have been very profitable, too.
As a result of all these interventions, the most profitable deal of the year ended in a loss. As a result, instead of the theoretical 60% annual income quite a few clients ended up in losses. In the end, this voluntarism was one of the main reasons why I left.
...
- What was your first trading system?
- My first system was one of Donchian's varieties of moving averages. I used exponential averaging, which simplified calculations and over time virtually eliminated the effects of computational errors. It was very new then.
- From what I said about the first system, it follows that there were others afterwards. How do you determine that the system needs to be changed?
- Systems don't need to be changed. The trick is to design a system that you are compatible with as a trader.
Д. D. Schwager The Exchange Magicians.
From an interview with Ed Seykota:
- How did your trading program perform in practice?
- The program worked great. The problem was the management, who couldn't resist tweaking the system's signals. I remember, for example, how once the program gave a signal to buy sugar, which was then at 5 cents. The bosses thought the market was already overbought and ignored the signal. When the market continued to rise, a new decision was made to buy at the first 20-point pullback [100 points is 1 cent]. But the pullback did not materialize, and then that decision was reversed to buy on the first 30-point reaction. But the market was persistently moving up without a significant pullback, and the bosses changed the pullback level to 50 and then 100 points. In the end, when the sugar was about 9 cents, it was decided that the market was bullish, and therefore we had better buy before prices went much higher. And at that level, we opened long positions in managed accounts.
As you can guess, the market soon peaked. Management compounded their mistake by ignoring the sell signal as well - and it too could have been very profitable.
As a result of all these interventions, the most profitable deal of the year ended in a loss. As a result, instead of the theoretical 60% annual income quite a few clients ended up in losses. In the end, this voluntarism was one of the main reasons why I left.
...
- What was your first trading system?
- My first system was one of Donchian's varieties of moving averages. I used exponential averaging, which simplified calculations and over time virtually eliminated the effects of computational errors. It was very new then.
- From what I said about the first system, it follows that there were others afterwards. How do you determine that the system needs to be changed?
- Systems don't need to be changed. The trick is to design a system that you are compatible with as a trader.
Д. D. Schwager The Exchange Magicians.
Very interesting and revealing. Thanks for the example.
My conclusion:
1. people automate their decisions and then conflict with the program that executes them. Law of psychology.
2. Regarding the average: there is nothing naive about simple, but conscious, itself. Only naive is the confidence of beginners in their preparation and understanding of what is going on. Their foolish determination to make decisions, their pretentious perception of the market, and their arrogant incompetence.
They need to be helped to see themselves by giving them the opportunity to be consistently disappointed in their illusions in practice so they can grow faster.
Very interesting and revealing. Thank you for the example.
My conclusion:
People automate their decisions, and then conflict with the program which executes them. The law of psychology.
2. Regarding the average: There is nothing naive about simple, but conscious, in itself. Only naive is the confidence of newcomers in their preparation and understanding of what is going on. Their foolish determination to make decisions, their pretentious perception of the market, and their arrogant incompetence.
They need to be helped to see themselves by giving them the opportunity to be consistently disappointed in their illusions in practice so that they can grow faster.
Golden words! +1000 000 000
Newbies need psychology, but it's not easy to work with newbies, some are just rabid. We can combine forces, I will work through the psychology of newcomers, and you program.
I started with sliding. A lot of people have started out that way. I think, that if I ever manage to use MAs, this will be the best trading solution.
Naive strategy with the proper written indicator.
If the daily Close price (green line) finishes the day above High (blue line), the next day when the price is above High - sell.
If the daily Close price (green line) finishes the day below Low (red line), the next day, when the price comes out below Low - buy.
That's a very naive strategy:
Naive strategy with the proper written indicator.
If the daily Close price (green line) finishes the day above High (blue line), the next day when the price is above High - sell.
If the daily Close price (green line) finishes the day below Low (red line), the next day, when the price comes out below Low - buy.
That's a very naive strategy:
Naive strategy with the proper written indicator.
If the daily Close price (green line) finishes the day above High (blue line), the next day when the price is above High - sell.
If the daily Close price (green line) finishes the day below Low (red line), the next day, when the price comes out below Low - buy.
That's a very naive strategy:
Yes, but from pairs with which EUR is quoted, such as EURAUD and AUDUSD.
Is the idea of the strategy yours?
I do not know, if someone before me has published such an idea - I apologize I have not read and therefore do not consider myself a plagiarist.