Moto moto wrote:
My testing now is more about probabilities, and individual ideas is more bespoke and then is a guide....using many trend following principles - but its not a one turn key solution whereby number of instruments, data time frames or such play such a crucial part.
Agreed
The trap is this: thinking trading and economics is some kind of physics based complex phenomenon with higher order traits that can be isolated and exploited with a particular set of fixed techniques.
In actual fact it is more like a game, warfare or an ecosystem. Any successful technique or tactic will inevitably become a victim of it's own success; Firstly because once you have taken all the losers money, they have to stop, cutting off your meal ticket to some extent; and secondly because the recent winning technique becomes predictable and that knowledge can be exploited by others who adapt their tactics.
Of course the million dollar question is how exactly to go about assessing and adapting to changing opportunities. Well that is where the thought and graft comes in....
In the last 5 years both broad diversification and some medium-longterm momentum following techniques have fallen victim to their own prior success. They may arise like phoenixes in future years, who is to say, but I think it is better to just try and figure out what is working now, and what might work for the next few weeks and months, than to hold out in hope of some amazing resurrection. It may come, but will you still be in the game by then? who knows. Doesn't seem like a great career idea imho
Aided by big commercial advances in financial data processing and fidelity between 2003-2009 my trading philosphy was based around riding out pain others didn't want to take and doing what they found difficult or inconvenient(mixing LTTF techniques with high resolution intraday ST data, but holding winners like a weekly swing trader). I was quite signed up to Econo-physics as my dominant ideology at the time.
The core of my whole trading philosophy since 2008 has adapted back to my pre-2003 hit and run style of being more focussed on what the "other guys" might be thinking and doing and how i can exploit that on shorter frames. I am still mechanical in my trading techniques(enty,exit stop etc), but quite discretionary in my selection.
Took a couple of years in the wilderness to get right(2009-2010) but has been working well since then.
Don't be the majority, but don't be in too small a minority either, the sweetspot is in between.