The best NEW ideas are well forgotten OLD ones !!!! Super money management - will it pull out any unstable trading system? - page 5
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In one of the neighbouring threads I expressed an opinion on another predigma in trading. It treats the fully Mechanical TS as a definable mapping from the instrument chart to our balance chart or, if you like, a mapping from the virtual equity MTS which makes only one buy at the beginning, to our native one. The topic of this thread as I understand it is to build a second (third, etc.) definable mapping from the balance chart to the balance chart, trying to make it more monotonous. But ideally this should be taken into account when constructing the first MTS, since the composition of definable mappings is itself a definable mapping.
The N-th order balance depends on uncontrollable price effects as much as the first order balance. The problem is to get a stable and cyclical first-order balance curve. And then it is already possible even with simple waving (by the first-order balance curve) to set the terms of the trades. The advantage of this approach is that we ourselves specify the controlled strong factor for the formation of the series of values, by which we determine the conditions of transactions.
The mash-ups are not fundamental here. What is important is the amplification and concretization of price movement patterns. I.e., the stronger the amplitude and cyclicity of the balance curve of the first order (which, by definition, takes into account all price movement factors plus our strongest and most controlled factor, the principle, by which this balance was built), the closer we are to creating the grail.
If translated into Russian, behind the words "amplification and concretization of price movement patterns" in your context, there is an assumption that the previous balance calculation allows strengthening the assumption of the next trade result (profit or loss). Actually this is how a balance should work - by a reinforced guess of a future losing deal it should disconnect the money supply to the furnace and vice versa.
There are many more ways, also not fundamental, which can be used to try to decide whether to make a deal in real or to leave it in the virtual. This idea is detrimental, because there is a serious lack of understanding of the author of his MTS. The virtual balance is a function of the price series and virtual signals that are a function of the same price series. Understanding how virtual signals are generated and refactoring results in virtual signals that cannot be improved.
An indirect, but very strong, indication of the misunderstanding of how MTS works when attempting to introduce a filter on virtual trades is the suggestion that future failed trades should be turned off rather than reversed. Indeed, to reverse a presumed future loss into the same profit you need to understand how to do this.
The N-th order balance depends on uncontrollable price effects as much as the first order balance. The problem is to get a stable and cyclical first-order balance curve. And then it is already possible to set the terms of the trades even with simple wands (based on the first-order balance curve). The plus side of this approach is that we ourselves set the controlled strong factor to form a series of values by which we determine the terms of the trades.
I think I'm starting to mix flies with cutlets. The price curve is one thing. The balance curve is OVERALLY different. The first one is a curve formed as a result of direct price fluctuations, and the second one is the result of executed trades irrespective of the direction of these fluctuations. As we can see the underlying reasons are absolutely different, though somewhat related. We cannot manage the price; a trader can manage the balance curve, for example, by readjusting the system.
As I said before, this approach is suitable for "serial" Expert Advisors that test a series of profitable and losing trades.
An indirect, but very strong, indication of the misunderstanding of the MTS when attempting to introduce a filter on virtual trades is the suggestion that future unsuccessful trades should be turned off, rather than reversed. Indeed, in order to reverse a presumed future loss into the same profit, you need to understand how to do so.
No one can say what the future deal will be. Otherwise we wouldn't be talking here, as millions do on other similar forums. So choosing today how to react to tomorrow's outcome (trade on, reverse, disconnect) is a difficult task. And with the negativity starting to set in, the suggestion to pull the plug here is far from a bad one. By pulling out of the market we remove the risk!!! of its further development.
In my opinion, in unknown terrain (which the market is) it is better to move carefully and with stops. You should not set a goal to make a monthly profitability. The main goal is not to lose, and if possible to earn.
>> ZS.
A quote from Buffet - To succeed on the market you need to follow two principles:
1. Do not lose money.
2. See point number one.
imha, this method can ONLY be used to take an EA out of trade.
The sliding window is of course needed to monitor the current performance of the TS, but it's better to use those indicators which have shown themselves to be the most stable for this system. Usually these are average profit per trade (MO estimate) and profit factor. Of course, the period for the calculation should be statistically significant. And the rules to disconnect the system may be simple: if the MO of the last X trades fell below Y points, or PF fell below Z, then the system must be discarded or revised. You may display it visually - in the form of sliding MO/FP and critical cut-off levels.
And switching the system on/off depending on МА crossing is a modification of the system itself based on memory availability in deals results. Which is fitting the past exogenous factors (e.g. prolonged up or down trend, prolonged trending, etc.), but not technical ones. Their occurrence and influence in the future cannot be predicted due to the lack of sufficient statistical information on them. In other words, a trivial fitting.
Translated into Russian, behind the words "amplification and concretization of price movement patterns" in your context is the assumption that the previous balance sheet layout allows you to strengthen the assumption about the result of the next trade (profit or loss). Actually, this is how a balance should work - by increasing the assumption about the future profitability of a trade it should turn off the money supply to the furnace, and vice versa.
There are many more ways, also not fundamental, in which one can try to decide whether to make a trade in real or to leave it in the virtual. This idea is detrimental, because on the face of it is a serious misunderstanding of the author of his MTS. The virtual balance is a function of the price series and virtual signals that are a function of the same price series. Understanding how virtual signals are generated and refactoring results in virtual signals that cannot be improved.
An indirect, but very strong, indication of the misunderstanding of how MTS works when attempting to introduce a filter on virtual trades is the suggestion that future failed trades should be turned off rather than reversed. Indeed, to reverse a presumed future loss into the same profit, you need to understand how to do so.
There is some misunderstanding here.
А. So far only firemast here claims to understand and absolutely know his strategy. He is 100% sure that he is right. But a normal trader puts stops and monitors the overall result. Why? Because he does not understand the strategy in its entirety and is not 100% sure of it. I personally follow the balance line (someone else follows equity), despite the fact that I focus on the elements of the strategy, not on this line. Who doesn't? I haven't met anyone like that. And let's not oversimplify, the reaction can not only be real<->virtual, the reaction can be a competent mm.
Б. Conditionally, the forecast can be divided into three states: 1) Price will go up 2) Price will go down 3) Don't know(!). And accordingly there is no absolute sense in an absolute flip, no matter how much our head of botany claims it.
No one can say what the future deal will turn out to be. - That's pretty much it. Otherwise, we wouldn't be here, as millions are on other similar forums. So choosing today how to react to tomorrow's outcome (trade on, reverse, switch off) is quite a challenge. And with negativity starting ("negativity has started" is terminology that hides the assumption that the next trade will be loss-making! Otherwise it sounds - the negative has ended, i.e. the next trade is assumed to be profitable), the suggestion to disconnect here is far from a bad one. By exiting the market we remove the risk!!! of its further development. - This is only for a future specific trade that we assume to be losing, and then re-enter the market and take the risk again!!! when we decide that the trade promises to be profitable. Obviously your reasoning presupposes knowledge of "what the future trade will turn out to be", although you clearly disassociate yourself from that.
In my opinion, it is better to move cautiously and with stops in unknown territory (which is the market). You don't have to set a goal to gain some profitability value in a month. The main goal is not to lose and, if possible, to make a profit. - This analogy is good for a person who needs time to relax, concentrate, calm down, reassess, etc. The mechanistic transfer of such an analogy to MTS, which is nothing human, I would leave for the ladies - they love red metaphors.
ZS.
Quote from W. Buffett - To succeed in the market you have to stick to two principles:
1. Do not lose money.
2. See point number one.
For the rest, I want to point out that you are seeing a typical example of a person making the right assumptions of the context being discussed: "No one can tell what the future deal will be," then adds a little bit of blank to make it inclusive: "Otherwisewe would not rubble here, as millions in other similar forums." and oops! - already possible for a murky terminology: "And with the beginning of the negative ...", to hide the contradiction of the original assumption. This creation is spiced up with an inappropriate analogy and a quote from a guru. Amen.
For the rest of us, however, I would like to point out that you are seeing a typical example of a person making the right assumptions about the context under discussion: "No one can tell what the future deal will be," then adds a little bit of nothing to make it inclusive: "Otherwisewe would not rubble here, as millions in other similar forums." and oops! - already possible for a murky terminology: "And with the beginning of the negative ...", to hide the contradiction of the original assumption. This creation is spiced up with an inappropriate analogy and a quote from a guru. Amen.
You're hilarious :-)
I've read the thread, more chatter than action:) Still, has this idea been implemented and what's the result? Has any code been written?