Pathfinder Trading System
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You need to remember that we already had a big correction in 2015, bigger than the current one (30% down from the top in DAX), and the pathfinder backtest performed well (i.e., was well optimized) for this period.
Isn’t above the point though? If we optimise over a big correction period then the System looks great as the optimiser works out variable values that give us a good profit over that big correction period (I haven’t seen the equity curve). Moving forward with that System through another similar non-optimised correction period (similar but not the same!) then trades may not perform anywhere near as good and so losses mount??
We always need to be aware that it it possible to develop and to optimize a trading system for a price curve that has been generated by tossing a coin. Heads up means price moves up by one unit, tails up means price moves down one unit. In such a price curve we will find trends, trendless phases, and many more characteristics we know.
Of course, even when we develop a sucessful backtest for such a price curve, it will never make any money in the future, because price movements are totally random and will continue to be generated by tossing the coin.
So, in my eyes, the question is : Are we able to find an instrument that statistically shows more trend behavior than can only be described by random price movements ? And can these trends be captured with indicators in the past as well as replicated in the future ?
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Well – @nicolas – and as you already suggested, Vonasi, how about the possibility to delete posts or at least to be able to modify them for a longer period than just 5 minutes ?
In the past I have found Nicolas very helpful for deleting or editing if you contact him via the Help/Contact Us via the top bar. This might be a cleaner solution than reporting your own posts!
Hopefully Nicolas does not mind me suggesting this.
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thank you graal, I had an open position in purchase, automated. but I also wanted to know if others have been given the same thing. and it would be understandable why in the backtest a position has been opened while in real time no.
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Writing codes and testing them is a very good educational tool so even if you never write a winning strategy it is worth sticking with. By trying different things we get to see what works better. We can quickly get a feeling for how tight stops can kill a strategy and whether some markets are good for trending or better for mean reversion. We can work out whether longer time frames are better than shorter time frames for our type of trading. The actual strategies coded may be failures but they all teach us something that makes our trading better even if we only ever manually trade. Slowly slowly we become better traders than we would by just staring at a chart everyday and watching the candles go up and down.
Analyse, extract information from the results, memorise the information discovered, use it later!
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