Learn To STOP Curve Fitting!
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mzns the year winds down, it’s time to take a look at the top five most popular articles for 2014. I determined the top five articles based upon the number of views the article received. So let’s get going by starting with the 5th most popular article for 2014…
This is a popular article as it was written back in 2012. It demonstrates two very simple trading models to trade the S&P buy being into short-term weakness. This article was updated in 2013 which also made it to this list (see below). But we are due for an update in 2015 as many people will be wondering how this trading model did in 2014. Keep an eye out for an update.
This article is part of a four part series on creating a scalping system for the Euro currency futures. Scalping is something that intrigues many system traders. The challenge at taking small, consistent trades from the market daily while risking very little is appealing. With scalping it’s generally accepted you are trading from a small timeframe, probably 5-minutes or less. The idea is to open a position and capture only a few ticks of profit. The appeal is since we are trading from such a small timeframe, your risk is small thus, you can trade with a small account. Often you will have setups that produce high win rates and occur more frequently than setups on a higher timeframe such as hourly or daily. There tends to be a higher frequency of trading opportunities with scalping which can potentially lead to large accumulated profits vs. your starting equity.
Once again the simple 2-period RSI trading models popularized by the book “Short Term Trading Strategies That Work“ makes its second appearance on this list. This article is an update on the performance of the trading models halfway through 2013. Again, this series of trading models is due for an update as I’m sure many are wondering how they have been holding up through the year 2014.
This article has remained very popular over several years. The article takes a look at a simple moving average crossover system and attempts to use simple techniques to improve the system’s performance by reducing the number of whipsaws during those dreaded range bound markets. Whipsaws occur when a market moves from a trending mode to a consolidation mode. During this consolidation mode the system gets whipsawed from long to short creating a string of losing trades. Long trades suddenly reverse hitting your stop. Likewise for short trades. These ‘false signals’ can destroy your equity curve. In this article two simple methods are introduced. These ideas can easily be implemented into your trading systems and may provide a great starting point for a trend following system.
In short, this article discusses how to verify if a certain trading system is robust or not. This is “a must” topic for system traders. The information presented is for the retail investors with particular attention to: optimization and curve fitting, market selection, backtesting, walk-forward testing, portfolio creation, intraday algorithmic trading, and so forth.
Thanks everyone for helping make System Trader Success a great website for system developers. In 2015 we will continue to bring you great content, trading models and market research that can help you create profitable trading systems. Here are two big items we have coming up for you!
1. System Development Master Class
I’m currently working hard on building a class on how to build profitable trading systems. It’s a video based class and it’s going to walk you through the very steps I use. In the class I will be creating a trading system and you will get to follow along to see how I do it. I will be demonstrating how I test profit targets, stops, and filters along with the use of tools and techniques to avoid curve fitting. It will be a comprehensive class that will give you the skills and techniques to build your own trading systems. This should be available within the first quarter of 2015. If you want to get notified when this class goes live you can visit here.
2. New Trading Systems
There are several trading systems I’m planning on releasing to the public in 2015. I’m not going to say a lot about them at this point other than you will want to take a look at these systems. All the systems will be rigorously tested and will make great additions to your trading portfolio. The best way to be notified when these become available is to to join our mailing list.
When it comes to getting preferential treatment being on the list is a must. When the System Development Master Class and our new trading systems become available, subscribers to System Trader Success get notified first. But that’s not all. They always get a better price as it’s my way of saying “thank you.” So if you’re at all interested in being notified when these products become available, you will want to join our free mailing list.
Jeff is the founder of System Trader Success – a website and mission to empowering the retail trader with the proper knowledge and tools to become a profitable trader the world of quantitative/automated trading.
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