Hi Joao --
Begin with the free stuff mentioned in my post of a few hours ago. Watch the videos, listen to the audio interviews, etc. Read the free chapters on each book's website. Use the "look inside" feature of the Amazon page for each book.The Blue Owl Press website has been revised recently. I want to encourage readers to post comments and discussion related to trading system development. But keep discussion of AmiBroker-specific topics on this Yahoo Forum.
http://www.blueowlpress.com/
http://www.blueowlpress.com/
On Tue, Feb 9, 2016 at 7:04 AM, João Flávio Machado Derzi joaoderzi@gmail.com [amibroker] <amibroker@yahoogroups.com> wrote:
Howard, I got be honest with you, I never had the pleasure of reading one of your books, unfortunately.When I come to AB I was in a hurry, just trying to code the TS I had already developed to trade intraday futures.So, I got my knowledge from where I could, mostly from authors who had been translated to portuguese (like Alexander Elder).I guess most people got into the market like me, thinking it would be much easier.After reading several of your posts and now knowing what your books are about my interest in them just rises more and more.I know they have been recommended several times on this group.I will take a look at the video, "Four faces of risk".I believe we all agree that controlling the risk is the key to trade successfully.You mentioned:I think 70% accurate trades is a reasonable target. My books and videos show several systems that achieve 70% or higher accuracy.Which books (or videos) show these systems?I am interested in practical methods, like the name of one of your books, but not only in mean reversion systems.Please, could you recommend me which one of your books to read?2016-02-09 11:11 GMT-02:00 Howard B howardbandy@gmail.com [amibroker] <amibroker@yahoogroups.com>:HowardHi Joao, and all --Not all discussions of risk management, position sizing, and trade management are short in length and / or short in content.
For example, consider the videos I have posted:
http://www.blueowlpress.com/video-presentations
And the books I have written:
http://www.blueowlpress.com/123-2I highly recommend the video entitled "The Four Faces of Risk."Best regards,On Tue, Feb 9, 2016 at 5:00 AM, João Flávio Machado Derzi joaoderzi@gmail.com [amibroker] <amibroker@yahoogroups.com> wrote:I will write very briefly, so the text won't be repetitive.I could not agree more with rosenberggregg@yahoo.com:Ron,I think anyone who builds a trading system needs to believe the markets are non-random. The challenge has to be that they seem so nearly random, and anytime a signal seems to be measured there are seemingly random shifts in its character.I do believe there are some non-random and predictable entry points which have more chances of success.The reason of that is because all the market agents (people, banks, funds) observe the same thing in the charts: moving averages, sup and res, Fibonacci... whatever.I do not believe that the market is a system of cause and effect like some biological, mechanical, chemical or physics events.It is moved by humans, humans decisions, humans emotions, humans interactions, human made TS and now, human made electronic orders.Therefore, the market will not follow any rule like "if I give you a present, you will like me for 6 months".Some humans are just like that, most are not.But physics is: pure liquid water will ALWAYS boil (turn to gas) at 100 Celsius degrees, if the room temperature is 0 Celsius degrees and the atmospheric pressure is 1 bar (760 mmHg).ALWAYS.There is this "law", this "rule" that will be "respected" because pure water is always pure water (H2O) and behave the way it does.The market (humans) does not.That is why there won't be a 100% (or even 90%) winning trade systems.70% winning is REALLY good.As pointed by wavemechanic: http://www.learntotradethemarket.com/forex-articles/why-winning-percentages-are-irrelevant-in-trading...one can loose using a system that has 90% winning trades and one can profit using a system that has 30% winning trades.The trading system itself is not as important as two simple principles: risk management and money management.I wonder why in all trading books I have read this two chapters are the smallest and the most shallow.A better trading system would make money faster and with less draw down, it should be just it.So, bringing that to real life (or real trading): if your TS is making 20% a year, that is great.Really great.If it does not have positioning restrictions, allowing to trade 1 million or 1 billion dollars that is a keeper.But maybe it could get better.As I mentioned, you could pick the trades with 1:3 risk-reward ratio (or above).That should improve the system.Also, I can not agree with this (as posted on other thread):
For Futures trading here are some specs that I think are worth considering :1) Utilize less than 50% of capital for margin2) Utilize a trading system that does long and short trades well and can be applied to the 20 top liquid futures.3) Utilize a trading system that has 70% + wining trades and a win/loss ratio of over 8/1 (1:8 risk-reward, that is very good!!!).4) Determine target and subtract entry point value to get potential win.5) Determine the risk point and risk value.6) Double risk value7) Divide potential win by double risk value.Example.............Target 743, entry point is 698. Potential win is 45Risk is 693........five points ........doubled is ........10This results in 4 or 5 contracts being traded.
So, if you are using 1:3 RR, that would always result in 3/2 = 1.5, 3 (reward) / 2 (double the risk).
A 1:5 RR should be 5/2 = 2.5
A 1:8 RR (man, these trades are really hard to find) should be 8/2 = 4
That would not be the proper way to calculate the position size, in the way I trade.
I always take the loss as a certain, so I could never lose more than 0.5% (or 1%, 2% if the trader is aggressive).
If I do not get a stop loss, it is a profit and that is bonus.
I really believe everyone should take the loss as a certain and prepare for that scenario.
If one wins a trade, he would win at least 1.5% (1:3 RR or more). And if one losses a trade, he would lose 0,5%.
On a 50-50 TS, he would be making money.
On a 70-30 TS, he would be making GOOD money.
There is a game that has 5 in 6 winning chances, it is a little more than 83% winning chances.
It is called Russian roulette.
The problem is, if you lose, if you take the loss, you lose it all: you die.
One can not let that happen when trading.
Therefore, the position size is all about the risk: the amount you will loose if you reach the stop loss.
In addition, there may be possible to improve the results using breaking-even rules to avoid the full loss or partial profits.
2016-02-09 2:49 GMT-02:00 wavemechanic olesmithy@gmail.com [amibroker] <amibroker@yahoogroups.com>:
On 02/08/2016 9:24 PM, pinaki_m77@yahoo.com [amibroker] wrote:
So what is usually the typical percentage of winning trades for most people? and what is it for those with above average and really high returns? Some real numbers from people in this forum will be helpful. All of this is pretty new to me, so knowing this will provide some context and hopefully push me to work harder on my algorithms :)
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Posted by: Howard B <howardbandy@gmail.com>
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