Is There Any 99.9% relaible Trading System?

m a beginner in FX. i wana know if there r any reliable trading systems or not???

Simple answer to that - no. You are looking for an edge which is usually subtle. As an example look at the Cowabunga system. Its win loss is about 50:50 so it relies on wins being greater than losses to be profitable. Once you have established that though expect the results to change over time and for you to need to adapt as markets change. If something was 99% reliable (or even 65%) I would put my house on it and that would be extremely foolish in fx

pliz tell me which system is da best for swing tading??? and for day trading???

My vote is No too!! Remember the saying, “If it sounds too good to be true, it is!”

And it really doesn’t matter about winning percentage, it’s all about money management! My second ‘demo’ account was at a 94.6% win rate. I margin called that account in 2 months!! But that was before I learned money management! Yay!!

Just make sure the wins are greater than your losses.

I wish the best for you in finding a swing trading system that you like and comfortable with!

All vary true money management is the best system of them all. As for your question as to which is the best system for trading. The answer is simple, what ever you like the best. I could tell you to use trend lines and someone else will tell you to use candles while you might like the macd.

Just play around in a demo until you find a system that works for you.

Do not ever limit yourself to thinking that reliability is only ever 50% at best. While it is true that a large majority of systems and indicators are not any better than a coin toss, i can tell you for certain that there are systems that give 60-70% accuracy rates. They may be harder to find but they are most definitly out there. I personally know of several traders who achive that kind of accuracy fairly consistently.

I feel that too many people actually downplay the significance of accuracy. I think that is a mistake. Accuracy should be viewed in the context of an entire trading system, no more or less important than the size of wins or losses. If you have a high accuracy system then drawdowns become less significant. Additionally, you can justify risking more per trade (within reason and as much as your testing suggests is still safe). Wouldn’t those characteritics provide a ton of value to your trading no less valuable than having average wins twice as large as losses and, at the same time, take the psychological edge off of having to sustain several losses in a row.

I find that we all have to be very careful when educating ourselves because although books hold alot of valuable trading wisdom, alot of that wisdom has become engrained in the trading community as dogma - dogma that noone ever wishes to challenge because it’s “what all the books say”

In fact, one of the approaches i make use of involves averaging down. I understand and am fully aware of what everyone out there says about avearging down but i actually took a moment to really look at some of the rules in this particular approach and tested them back for almost 10 years. With the proper money management and a commitment to testing noone can ever tell me again to NEVER average down. That’s shallow and comes from people who don’t take the time to challenge and validate theories for themselves.

High accuracy systems do exist and it is well worth the effort to find them. Just always be sure to test any idea till you are blue in the face before you commit. MONEY MANAGEMENT is always the common denominator in any successful idea or strategy, conventional or otherwise.

Could you imagine if it did exist?? :eek:

Market is so tricky. To be profitable, you need an average system even with 50% success rate, as long as your reward as greater than your risk, you should be fine in the longer-term trading.

I’ve got a system not quite 99.9, but close. 95% I reckon. Toss a coin, place a buy or sell. Set a take profit of just one pip, no stop loss.

95% accurate, 100% guaranteed to blow your account.

You get my point though - it’s about how profitable a system is, not how accurate it is.

Pipbull, interested in your experience of averaging down though. I wouldn’t dream of ever saying never… different strokes and all the rest. Do you limit yourself as to how far you’ll average down - ie do you have a cut-off limit when you say OK trend has definitely reversed, I’ll call it a loss?

I do averaging down in my candlestick method and have been doing it for a while now - very successful.

yes I agree and will also add to a trade which is giving me a better price

what is “candlestick method”?? pliz xplain…

In your example, yes…you could definintly blow your account. But like i said, accuracy needs to be looked at in relation to the rest of your system. For example why is a highly accurate system with a lower reward:risk any less valuable than a low accuracy system with a high reward:risk.

Accuracy is one piece of the puzzle and depending on what type of trader you are, it could be more or less important. You just have to find that balance through your testing. Certainly if you don’t manage the downside you are doomed even with a 95% accurate system. This is why i mentioned that the common denominator in all of this is proper money management.

"For example why is a highly accurate system with a lower reward:risk any less valuable than a low accuracy system with a high reward:risk. "

It’s not and I couldn’t agree more - I should be clear, the first 1/2 of my post was directed towards the guy asking about a 99.9% reliable method.

Pipbull though, am [I]still[/I] interested in your experience of averaging down… !

Hmmm where do i start?

In a nutshell i follow a Martingale type approach, but not in the traditional sense of the concept. Although i add a certain amount to the position at predetermined points, I definitly do not go to the extreme of doubling down on each addition to the position.

I try to avoid currencies that have strong trending tendencies simply because if a currency pair decides to exhibit a prolonged trend against me, then it could take a while to recoup the losses. Ranging pairs tend to be the safest approach when using such a strategy.

However, having said that, i am still very curious what such an approach would look like using an extremely volatile/trending pair like GBP/JPY. I’ve done some pretty exhaustive testing on this pair and the results look very very promising. But keep in mind the following:

  • I’ve tested over 8 years of data and it’s given me a good understanding of the kinds of movements this pair can make.

  • I’ve adjusted my position sizing model to account for the pair’s potential moves. in other words, this pair can move 2000 pips on a dime so i trade sizes that allow me to stomach and survive an adverse move of that magnitude.

  • I also trade exclusively on the side of positive carry. This essentially helps my average price and my positions to come back more quickly.

In my opinion, the concept of ANTI-Martingale is valid and smart for survival but Martingale can be just as smart when applied intelligently to the FX market. Unlike stocks, currencies cannot move to zero so they eventually must reverse. It could take a while to do so but if you’ve accounted for the volatility and wide range of price swing possibilities of each currency pair in your testing, then you will have the knowledge to smartly adjust your position sizes that reflect those possibilities.

Does this make sense?

Thanks Pipbull, that does make a lot of sense and I can see how that will work (unless of course the pair stops ranging and starts trending!).

Going completely off topic (I think we’ve answered the 99.9% question), you mention 8 years of data… were you tempted to go back further? I ask because from what I can see when backtesting my own strategies, as soon I try to include the 90s, they usually crumble. I’ve never been sure if that’s something to do with how the market acted differently back then (did it?) or a weakness in strategy. You sound very much like you’ve done a lot of research, so would be great to hear what you think. Cheers

Actually, i have looked into the 90’s as well. Basically just taking a quick glance to see how extreme the moves were. The strategt would have easily survived in that time as well (again, assuming you observe conservative risk management)

Also, and please someone chime in if i’m wrong here, looking back too far is definitly going to yield different results in some strategies. The currency markets i don’t think were quite as accessible back then as they are now and trading was often mostly done by the big boys. The result, in my opinion, is a completely different market dynamic that won’t necessarily be representative of the market that exists today.

Rhodytrader actually seems pretty knowledgable on these matters so maybe he’ll jump in here and shed some more light

Take care