Very interesting approach. I always thought that a strategy must work on all markets. Apparently this shows that some strategies work better on selected markets. The numbers are the hard proof. Many thanks.
totally agree. long term trendfollowing should work on all markets, but short term the market characteristics shows up clearly. not only in direction but also in style (mean reversion or breakout)
Ali, I love your stuff. I have no idea what you’re talking about with the coin flip component? Is that a ratio of long:short? Or entry to non-entry? Or …? I think we are missing a key sentence somewhere.
Imagine a strategy that buy when close above SMA100 Instead of buying you flip a coin, if heads you buy, if tails you dont buy and wait for the next signal. The purpose of the coin is to add variation to the strategy. So combining holding and waiting bars with coin flip you get more combinations.
Dont be confused. Natural gas will not drift to zero.but trading natural gas short term, its way better to build short strategies than long strategies.
I'm confused with coin flip...head is enter trade? The first day of backtest, i choose randon between 40/60, 45/55, 50/50, 55/45 or 60/45. For example is selected 60/40 and appear tail so i dont enter trade. The second day random chose 45/55 and get head son enter trade an hold 3 bars and wait 6 bars (foe example) ans continue until end of backtest. can you explain with an example? Thanks Ali.
These are optimizations that are run once at a tine. Heads you enter a trade Once in a trade you hold 3 bars and exit Once you exit you wait 3 bars You flip a coin if heads you enter a trade else next day you flip again if heads you enter a trade, else next day you flip again. U repeat above for all data. Thats all one simulation. Next simulation you change holding bars to 4 and waiting bars to 6. Next simulation you change holding bars to 5 and waiting to 9. You run a simulation on all combinations which is 50,000 combinations in total
I have been trading since the early 80's, the markets are random, and if you can find an edge it will not last for long. You have super computers worldwide and individual retail traders trading in and out of the market all day and night. You also have to define trading, is it swing trading, trend trading, highspeed trading and what are the time frames all of this and more have to be taken into account when you say trading is not random. There is a reason why trading firms that make money are HFT's because it's much easier to make money when you can front run other people's trades. Retail trading is difficult, all the odds are stacked against you. Edges only last a short time.
if we can find an edge in very different conditions, then can't we say that EVERY market has it's edge and we just need to find it? i mean, even in very volatile markets like crypto MEME coins there should be a way to find an edge as crazy like for long : exit on price above SMA200, and below EMA20, and also when the RSI20>45. that's for a crazy example of course, but can't we see things like that as an edge? something like - crazy markets require crazy edges... no? Thanks for you great videos Ali !
What you are talking about is a strategy. This is just telling you what the market tends to do on day to day basis. Even though natural gas has a huge short bias, you can still develop long strategies. But it will be like child play to develop short strategies as shown in video while very hard to develop long strategies. Meme coins has no historical data. All my test are using 18 years of data. Bitcoin has enough data to test and its slightly long
hello man very good video i am trying to build an profitable long term strategy for us30 currently im using 21 , 55 , 80 ema cross with trendlines to catch trend reversals and trade them with my backtest its good but still im practicing my goal is to build an strategy thats works everytime in long term and atleast my goal is 2% per month can you help me if you have any suggestion ? (im looking for 2% per month and its enough for me)
Unfortunately there is no strategy that pays out a monthly percentage like a salary. You need to shift your mindset. focus on building a portfolio of 5 or more uncorrelated strategies. even then you will have drawdowns, but at least the equity curve slope will be up.
@StatOasis Depends. Have you ever studied Econometrics to study the short-term, medium-term and long-term structure of time series? there are some errors in the video. The analysis carried out is too basic and generalist. I'm not even a fan of using past prices data, prices move due to cause and effect, it is not always possible to identify the causes but those where they are known it is possible to have a very robust alpha.
if you are a profitable trader, then don't waste energy on this. if you are not a profitable trader and want to build profitable short term strategies then treat this like a gold mine. start building strategies with Market Edge only. if you don't have a market edge, then don't trade that market.
Ali - you rock, #1 on TH-cam for sure.
Thanks for the kind words! I'm glad you found the video helpful. Always striving to bring valuable insights!
super !!!thanks Ali
Welcome 😊
Very interesting approach. I always thought that a strategy must work on all markets. Apparently this shows that some strategies work better on selected markets. The numbers are the hard proof. Many thanks.
totally agree. long term trendfollowing should work on all markets, but short term the market characteristics shows up clearly. not only in direction but also in style (mean reversion or breakout)
Ali, I love your stuff. I have no idea what you’re talking about with the coin flip component? Is that a ratio of long:short? Or entry to non-entry? Or …? I think we are missing a key sentence somewhere.
Imagine a strategy that buy when close above SMA100
Instead of buying you flip a coin, if heads you buy, if tails you dont buy and wait for the next signal.
The purpose of the coin is to add variation to the strategy.
So combining holding and waiting bars with coin flip you get more combinations.
Either I don't understand anything or you are confusing edge with drift
Dont be confused. Natural gas will not drift to zero.but trading natural gas short term, its way better to build short strategies than long strategies.
I think this is one of your best videos ever so far. I’ve asked for the excel on the Statoasis community, it would be useful really.
Thank you, will share the sheet there.
@@StatOasis Thank you!
I'm confused with coin flip...head is enter trade?
The first day of backtest, i choose randon between 40/60, 45/55, 50/50, 55/45 or 60/45. For example is selected 60/40 and appear tail so i dont enter trade.
The second day random chose 45/55 and get head son enter trade an hold 3 bars and wait 6 bars (foe example) ans continue until end of backtest.
can you explain with an example?
Thanks Ali.
These are optimizations that are run once at a tine.
Heads you enter a trade
Once in a trade you hold 3 bars and exit
Once you exit you wait 3 bars
You flip a coin if heads you enter a trade else next day you flip again if heads you enter a trade, else next day you flip again.
U repeat above for all data.
Thats all one simulation.
Next simulation you change holding bars to 4 and waiting bars to 6.
Next simulation you change holding bars to 5 and waiting to 9.
You run a simulation on all combinations which is 50,000 combinations in total
Where can I find a copy your of Ultimate C% for SQX?
You can find it in the community go.statoasis.com/community
I have been trading since the early 80's, the markets are random, and if you can find an edge it will not last for long. You have super computers worldwide and individual retail traders trading in and out of the market all day and night. You also have to define trading, is it swing trading, trend trading, highspeed trading and what are the time frames all of this and more have to be taken into account when you say trading is not random. There is a reason why trading firms that make money are HFT's because it's much easier to make money when you can front run other people's trades. Retail trading is difficult, all the odds are stacked against you. Edges only last a short time.
Can you do analysis on crypto market?
the only one with enough data to get a statistical confidence is Bitcoin.
I have done the test, and it is slightly Long on short term basis.
if we can find an edge in very different conditions, then can't we say that EVERY market has it's edge and we just need to find it?
i mean, even in very volatile markets like crypto MEME coins there should be a way to find an edge as crazy like for long :
exit on price above SMA200, and below EMA20, and also when the RSI20>45.
that's for a crazy example of course, but can't we see things like that as an edge?
something like - crazy markets require crazy edges... no?
Thanks for you great videos Ali !
What you are talking about is a strategy.
This is just telling you what the market tends to do on day to day basis.
Even though natural gas has a huge short bias, you can still develop long strategies. But it will be like child play to develop short strategies as shown in video while very hard to develop long strategies.
Meme coins has no historical data. All my test are using 18 years of data.
Bitcoin has enough data to test and its slightly long
hello man very good video
i am trying to build an profitable long term strategy for us30
currently im using 21 , 55 , 80 ema cross with trendlines to catch trend reversals and trade them
with my backtest its good but still im practicing
my goal is to build an strategy thats works everytime in long term and atleast my goal is 2% per month
can you help me if you have any suggestion ? (im looking for 2% per month and its enough for me)
Unfortunately there is no strategy that pays out a monthly percentage like a salary.
You need to shift your mindset. focus on building a portfolio of 5 or more uncorrelated strategies. even then you will have drawdowns, but at least the equity curve slope will be up.
@@StatOasis thanks
Yeah, thats not true. Market in forex is random. Especially in lower timeframe
So you prove my point, did you watch the video? I show EURUSD has no edge short term. Also in my newsletter i show USDCAD has no edge
Corn is trend following asset 😅😅😅 not random
All markets work with trendfollowing. I mention this in beginning of video.what I am looking for is short term edge.
@StatOasis Depends. Have you ever studied Econometrics to study the short-term, medium-term and long-term structure of time series? there are some errors in the video. The analysis carried out is too basic and generalist. I'm not even a fan of using past prices data, prices move due to cause and effect, it is not always possible to identify the causes but those where they are known it is possible to have a very robust alpha.
if you are a profitable trader, then don't waste energy on this. if you are not a profitable trader and want to build profitable short term strategies then treat this like a gold mine. start building strategies with Market Edge only. if you don't have a market edge, then don't trade that market.
🤔
💪
Give me an easy trip to Forex trading I can do
There is a a slight edge on the short side for eurusd. Its much better to look at patterns