This thread isn't to bash other people's systems.... So don't be posting:
XYZ System Sucks!
Okay, now that that is out of the way:
What do you look for in a good system? Basically, I have become an expert in finding the weaknesses in systems. In a very short period of time, I can figure out how a system will fail, based on various market conditions.
One thing I look for is a high risk to reward ratio. Basically this allows you to lose a few trades in a row, and still break even after a winner. So during very crappy periods, you don't lose your a$$.
Now, I also look for consistency over YEARS of backtest data. I like at least 5 or 6, but sometimes 3 will do. Basically, if a system is at least breaking even over a few years, it shows me that it can handle a variety of market conditions.
I also look for real world reasons for entries..... not just because "the charts told me so" or "the fibonacci retracement said it would go up" LOL that stuff is voodoo to me. I think that if you can imagine a real world reason for why something happened, then you can make and educated guess on entries.
For example, James16's pin bars show us either a stop hunt has just occured, or an extreme overbought or oversold situation occured, and the market wouldn't take it any more.
XYZ System Sucks!
Okay, now that that is out of the way:
What do you look for in a good system? Basically, I have become an expert in finding the weaknesses in systems. In a very short period of time, I can figure out how a system will fail, based on various market conditions.
One thing I look for is a high risk to reward ratio. Basically this allows you to lose a few trades in a row, and still break even after a winner. So during very crappy periods, you don't lose your a$$.
Now, I also look for consistency over YEARS of backtest data. I like at least 5 or 6, but sometimes 3 will do. Basically, if a system is at least breaking even over a few years, it shows me that it can handle a variety of market conditions.
I also look for real world reasons for entries..... not just because "the charts told me so" or "the fibonacci retracement said it would go up" LOL that stuff is voodoo to me. I think that if you can imagine a real world reason for why something happened, then you can make and educated guess on entries.
For example, James16's pin bars show us either a stop hunt has just occured, or an extreme overbought or oversold situation occured, and the market wouldn't take it any more.