Step 5: Evaluate the System — Step 5: Evaluate the System: After we have put our system together piece by piece, testing dozens of alternatives and have taken it apart and found that only the best components remain as a part of our system, it ...

One Way to Develop a Winning System

Thanks for your comments guys. I think this just about sums it up. And I hope to be adding some commentary on money management and a few other topics soon.

One Way to Develop a Winning System

Appreciate the "heads up" LOL!

One Way to Develop a Winning System

Thanks for the kudos charvo. Yes step 4 can be a lot of work, particularly in keeping track of all the different combinations of rules and how the system performs both with and without those rules. It takes some time but I've found it to be a very ...

One Way to Develop a Winning System

I agree with you that money management is a very important part of any trading system. Some say it is the most important part. I think it depends on the kind of system that's being used. My belief is that a unique money management strategy should be ...

One Way to Develop a Winning System

It plays with our basic feelings because of the uncertainty principle of not knowing what is going to happen next. But the truth is that nobody really knows what's going to happen next. Having a tested set of rules helps soothe those feelings, ...

Exits: Our worst enemy

Step 4 Commentary — So the point of step 4 is to take a system that is showing promising backtesting results, and evaluate it component by component. It is this way that we learn from our systems what works and what doesn’t. And we can use ...

One Way to Develop a Winning System

Step 4 — The fourth step is in deconstructing the system one element at a time to determine what is actually driving the profitability of the system. It has been said that there are many profitable systems out there, and all of them are ...

One Way to Develop a Winning System

Summary of Steps 1-3 — To sum up for easy reference the first 3 steps that I’ve talked about thus far: Determine what you are trying to accomplish. For example, my goal is to create a fully objective trading system that uses high-frequency ...

One Way to Develop a Winning System

Does MTF stand for multiple time frame system? And if so, are you using the longer time frames as a trend filter and entering on the shorter time frames for timing purposes? I'm curious about this approach because backtesting multiple timeframes ...

One Way to Develop a Winning System

There was an interesting thread on this topic a while back by a guy named Mr. 50%. I think he posted a journal consisting of several coin flip trades and ended up with a positive record using his money management system. It was a small sample but a ...

One Way to Develop a Winning System

Appreciate sharing your system. It sounds like a money management based system. Do you take losses also, or do you just wait for your open positions to hit the target? If you do take losses, this sounds like a concept I've seen elsewhere where you ...

One Way to Develop a Winning System

I want to apologize for being sarcastic in my previous reply to you. It sounds like you're just trying to understand what I'm talking about. And I also realize that some of the ideas discussed in this thread are quite esoteric and lacking in ...

One Way to Develop a Winning System

Great question. Over the past years that I've been involved in trading and with forex I've independently developed a few systems that I consider good with positive expectancies. I'm in process of system development of a new system right now and as ...

One Way to Develop a Winning System

Thanks for your question. When you are dealing with a high % win system there is a very high probability that consecutive loss streaks will be broken. And so it is a natural to look to increase size on the onset of a streak. But something to be ...

One Way to Develop a Winning System

Bless your heart Mr. cookie monster, I do believe that's your second consecutive off-topic post in this thread. If I didn't know better I'd think you're attempting to sprinkle cookie crumbs all over this thread. Pretty clever trolling for someone ...

One Way to Develop a Winning System

Step 3 continued... At step three in my system development I don’t have a trading system but do have a working model that tests with at least some degree of profitability. The idea is to refine the system down from a rough concept into a shiny ...

One Way to Develop a Winning System

I'll continue with the commentary: The third step is in creating some assumptions and testing those assumptions. The first thing to realize about trading is that there is really nothing new under the sun. The markets are there, the basic ways of ...

One Way to Develop a Winning System

Thanks for the feedback Seavo!

One Way to Develop a Winning System

Thanks for your comments superdezign! I spent lots of time chasing the win% holy grail. It's just about as thirst quenching as a mirage in the desert. The whole expectancy thing took a long time to sink in for me. And you're right, it is really ...

One Way to Develop a Winning System