Registered User
Joined: 1/1/2009
Posts: 4
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Hey,
I'm looking for a pre-packed mechanical trading system to purchase...I don't have the time to make my own and I'm finding it very difficult to find objective reviews and/or back-tested systems to buy.
Do you have a system that you recommend?
I would appreciate getting your opinion.
Greg
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Registered User
Joined: 6/6/2005
Posts: 1,157
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hi Jeba,
you mention that you don't have time to make your own system -- will you have the time to trade one that you buy? Unless you hand your money over to a manager, everything in the market takes time and energy to execute. Much more time.
When looking for prepackaged systems ask for a 3 year live history of real time trades. As for a real time equity curve. That will narrow your selection down to nearly nil. A few questions to ask yourself:
1. How long of a holding period am i looking for. I'm guessing you're not looking for a daytrading system. If you don't have the time to create your own system you definitely don't have the time to day trade.
2. How much capital will the system be trading
3. How many simultaneous trades will you be managing?
4. What type of a drawdown can you comfortably withstand?
5. Will you be looking for a trend trading system or a counter trend trading system?
6. Do you want to know how the system works or are you okay with a 100% black box system.
Those questions were just off the top of my head. Others may be able to provide more insight.
Good luck in your search.
David John Hall
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Registered User
Joined: 7/1/2008
Posts: 889
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why not just put your money with a CTA?
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Registered User
Joined: 1/1/2009
Posts: 4
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QUOTE (davidjohnhall) hi Jeba,
you mention that you don't have time to make your own system -- will you have the time to trade one that you buy? Unless you hand your money over to a manager, everything in the market takes time and energy to execute. Much more time.
When looking for prepackaged systems ask for a 3 year live history of real time trades. As for a real time equity curve. That will narrow your selection down to nearly nil. A few questions to ask yourself:
1. How long of a holding period am i looking for. I'm guessing you're not looking for a daytrading system. If you don't have the time to create your own system you definitely don't have the time to day trade.
2. How much capital will the system be trading
3. How many simultaneous trades will you be managing?
4. What type of a drawdown can you comfortably withstand?
5. Will you be looking for a trend trading system or a counter trend trading system?
6. Do you want to know how the system works or are you okay with a 100% black box system.
Those questions were just off the top of my head. Others may be able to provide more insight.
Good luck in your search.
David John Hall
Thanks for the questions..
Does anyone have a name or a few names of reputable mechanical trading systems that you've had good experiences with?
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Registered User
Joined: 11/11/2006
Posts: 359
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jeba9999:
You may wish to Google "Traders Laboratory".
They have a catagory thread of "Automated Trading ."
Mammon
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Registered User
Joined: 2/5/2006
Posts: 1,148
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the operative word here is "mechanical". trading stocks is not purely "mechanical." if you don't have time for research, then don't waste your money.
you could easily devise a system yourself, where the 20 day moving ave crosses the 50dma, on some frame, if want a purely "mechanical" system.
you'd probably be better off with a long term asset allocation investment strategy.
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Registered User
Joined: 11/11/2006
Posts: 359
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Funnymony, do you remember the thread a year or so ago "Interesting Numbers"?
I would think that in lieu of a mechanical trading system, something of this ilk would be a good substitute.
It would require a minimum amount of time, commissions and fewer trades. Whin it's clicking, it would seem hard to beat......
Mammon
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Registered User
Joined: 2/5/2006
Posts: 1,148
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actually, i do. interesting numbers indeed.
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Joined: 10/7/2004
Posts: 2,181
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Greg,
Invest in real estate. You're going to lose your shirt in the stock market.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hi Mammon,
Thanks for reminding me about that thread. I think I'll do a forward test of the system by trading those top 5 Russell stocks for the next 12 months. Why not? I don't have much else going on besides keeping track of manic lower priced stocks and 1 or 2 dragons.
I will start a thread tonight for anyone who's interested and we'll see how we do and any nuances we might need to impose. If anything it's food for thought and it corresponds perfectly with tomorrow being the beginning of the month.
At the same time (though I won't trade them) I'll track the performance of the bottom 5 stocks. Should be interesting.
David John Hall
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Registered User
Joined: 7/1/2008
Posts: 889
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DJH, you're the man.
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Registered User
Joined: 2/5/2006
Posts: 1,148
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QUOTE (davidjohnhall) Hi Mammon,
Thanks for reminding me about that thread. I think I'll do a forward test of the system by trading those top 5 Russell stocks for the next 12 months. Why not? I don't have much else going on besides keeping track of manic lower priced stocks and 1 or 2 dragons.
I will start a thread tonight for anyone who's interested and we'll see how we do and any nuances we might need to impose. If anything it's food for thought and it corresponds perfectly with tomorrow being the beginning of the month.
At the same time (though I won't trade them) I'll track the performance of the bottom 5 stocks. Should be interesting.
David John Hall
heres a dragon. he's flying upside down.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Nice funnymony!
I'd call him a sleeping dragon. I know there has been talk of finding them for downside moves. I like it.
David John Hall
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"I'd call him a sleeping dragon."
Looks like a stegosaurus to me.
Thanks
diceman
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Registered User
Joined: 1/30/2009
Posts: 267
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Very interesting, I just shorted this yesterday. Let's see how the inverted dragon works.
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Registered User
Joined: 12/5/2008
Posts: 81
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Hi Jeba,
Although this is still a young system, it shows alot of promise with some of the better statistics on collective2. You might want to have a look at:
www dot collective2 dot com slash go slash dailycash
Good Luck!
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Registered User
Joined: 3/29/2005
Posts: 56
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So daily cash charges $85/per month PER SYSTEM, not for the site as a whole?
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Registered User
Joined: 3/29/2005
Posts: 56
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Never mind, I see it varies. It looks like what the OP is looking for though.
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Registered User
Joined: 1/12/2009
Posts: 235
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Didn't you used to post on Investors.com Vvrd?
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Registered User
Joined: 3/29/2005
Posts: 56
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I subscribed to it for one month but I don't think I ever participated in the forums. You mean the IBD site?
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Mechanical systems are a myth. There is not one that will work for you and Tobydad is correct. If this is how you wish to approach trading the market then you might as well just give up your shirt.
If trading were that easy than the markets would cease to function.
The best that one could hope for is to put the odds in your favor as best you can and learn proper managment skills. I know that these are vague responses but the markets are just not that giving. It takes years of experience just to learn how much that there is to learn. There are no "turn-key" trading systems or holy grails....
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Registered User
Joined: 12/31/2005
Posts: 2,499
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QUOTE (Apsll)
...
...
...
There are no "turn-key" trading systems or holy grails....
And if there are the people using them aren't talkin' :-)
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Registered User
Joined: 12/5/2008
Posts: 81
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Apsll, you're too uptight. Be cool baby
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Registered User
Joined: 3/21/2006
Posts: 4,308
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I am as cool as a cuccumber toots. I just do not believe that you can place your slug into the slot and ring up aces every time.... Jas is correct; If their are those that have evolved that far or that have enough $$$ to make a differance then they will not tell all in any book or lead you to riches on any website...
Keep dreaming......
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Registered User
Joined: 12/5/2008
Posts: 81
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Didn't you know that those with the holy grails can grow their nest eggs much much faster when they share? They wouldn't share their edge of course, just their trades with the multitudes that would follow.
That way both they and the multitudes will benefit -- the multitudes that follow the edge holders will get rich. But, the edge holders themselves will get exponentially rich.
Then everybody is doing the happy dance  .
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Registered User
Joined: 10/7/2004
Posts: 264
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Greg,
Google Dr. John Clayburg. He is a big system development guy. I have heard him talk but have not first hand experience with his stuff. Good luck.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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I want to tell you a story. It is a story of three little pigs and a big bad wolf…….
Now this little piggy was a real go getter, he tried to make his life just that much better
He opened his account with a real hip trader, began to buy shares that he would sell latter.
Folks this story is a very old one and the ending never changes. The markets are guided by those with the power. There is nothing you can do to stop them; it is their job to stay one step ahead of the masses and find new ways to take your money. It is funny because if you did this social experiment. Let’s say throw a dart at a list of stocks in early March of 2009 and then just forgot about your pick for say three months then you would have found that this random pick would have netted you close to 300% profit.
Not real technical or even fundamental but you made money because why? For starters you did not look at the stock for three months so all emotion was removed from the equation. Second the timing was perfect; you threw your dart right before the markets started to rally. So now you begin to think that you have the Midas touch and proceed to give back all your profits to the ones with the power, because of course that is by their design.
I have been on these boards for a long time and talked with a lot of folks that think that they will find a way to decipher the technical’s like they hold a map with the X that shows them where the treasure is buried.
The truth is that the best way I have found to make good picks is to trade the trend. Buy and hold. (Swing trade, Position trade). Yes I do my day trading but nothing has paid me more than when the markets are trending and you buy and hold for a month to four months. Yes you do have to have stops (mental or hard) and you have to know when to take your profits.
As far as trading systems based on indicators; just be careful. They can give you false signals and when you mix that with emotions then you have a lethal cocktail. Now I like to find what I think is signs of the smart money participation and then try to hitch my wagon up to theirs. It does not always work and so I take my small loss and move on. Take my word for it; there is no holy indicator. The market landscape is ever-changing and you just have to put in the time and gain the experience. They say that less than 2% that attempt to trade actually find success. That means that only about two or three of us here actually have found it. None of us will ever know who they are. Some say that the successful ones would never be caught on these boards. So maybe none of us are a success…. You all know the truth in your own hearts.
I am just trying to save you all some $$$$ when it comes to relying on indicators and fancy systems. They all look good when you look at past success stories but when you are trading in the here and now then emotions and bad decisions will suck you dry. Just be careful out there in the trading trenches…..
Apsll.
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Registered User
Joined: 12/5/2008
Posts: 81
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Apsll,
Why is it that everyone except you realizes that "Buy and Hold" is dead in today's markets.
It sound like you have missed your calling as a Financial Planner.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Read my words carefully good sir. I did not say to buy and hold in these market conditions. Maybe everyone here does not trade like I do; this means nothing to me on a personal level. I only say my opinions and "everyone" can do as they will. There are those here that know me well and those that do not; those that I trade with every day and those that I do not.
You must follow your heart and heed the words of those that you trust on this board. Those that you do not then leave them in peace and choose your road.
I wish you no ill will my friend, I know not from where your anger comes and nor do I care.
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Registered User
Joined: 12/5/2008
Posts: 81
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When I am angry, you will see this 
lol.
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Joined: 10/27/2004
Posts: 821
Location: Philly area
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There are several places that evaluate trading systems:
- The Collective 2 site (mentioned above) (Note the site also markets them)
- Futures Truth: It's really a magazine which quarterly rates mechanical trading systems. This is perhaps the grandadie of raters. Mr. Hill has a testing engive and will rate any submitted package according to a strict set of rules.
- Wealth-Lab which allows posters to get testing on their systems using the Wealth-Lab language. (The underlying Wealth-Lab product is not available in America as Fidelity Investments has an exclusing license on the software. You can however use a version of it on line for free.
There are a lot of books and articles about mechanical trading systems.
I note at least two problems
1.) A lot of systems have their run. That is the work well for a period of time and then they go sour. OFten the providers upgrade the systems seeking to restore their performance record. Note that Futures Truth strictly rates systems in a foreward mode to preserve their validity. That is any upgrade is only tested into the future - no retroactive testing to cover market action prior the the specific release.
2.) If you read books on testing and well known systems and their users, there is an interesting pattern. That is "anywhere but stocks". In the books you see stocks discussed early in the book, but seldom further on where the evaluation focuese on commodities, gorex and the like. Likewise the traders trade anywhere but stocks EXCEPT when the market is clearly trending when they will trade stocks.
For example, one system called "Aberation" has long been one of the market leaders - but over the years has run hot and cold
This is a hint that suitability to a mechanical trading system favors forex and commodities as they are more likely to have trending runs that are more consistant. Stock trends have more risk and volitility, so the Pros act accordingly.
I should note that there are a number of famous trading systems that have had good performance over the years. But they have their good and bad intervals and what's the best tool today may be a road to poverty some year soon. Futures Truth (which does not sell any systems) shows the vendors, the prices and the their current FT rating. But take a look at the people who sell them - they may have a dozen or more systems for sale - some for specific markets and some not. MIght that be a hint that even the best of them know that one expensive system is not the magin answer.
So take a look at these sites and others you may find. Get a feeling and remember, there is likely no EASY and ASSURED way to make money in stocks, especially as a small and active trader. Mechanical trading systems by themselves would be used by everyone if they were the easy road............
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