Navigator Trading System
- This topic has 151 replies, 37 voices, and was last updated 6 years ago by
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Is it possible/useful to cumulate the trades only if the position is positive?
Reiner should confirm, but it would completely deserve the strategy since cumulating orders while in negative profit increases order basket capacity to exit faster in gain.
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Hi Flo,
The strategy will also works in daily timeframe but daily timeframe has the disadvantage that you can only react at 1 am because all PRT daily timeframes are synchronized to that fix timestamp.
The results are much worse if you change the averaging down strategy (average profit <0) for long positions to an averaging up strategy (profit >0). The simple message is: accumulate low and sell high when markets recover easy to say but hard to manage for most of the traders!
If you are interested to understand why this simple setup is so reliable please read the following valueable study.
Best, Reiner
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Hi Reiner,
thanks a lot for this system. I’m amazed by your creativity and generosity. And I love that you are fascinated with repeating time patterns.
If you have time, I have two questions for you re: Navigator
- The supporting research you attached (btw, I love it that there is supporting research to a statistical model, this is VERY reassuring!) seems to suggest that the best moment to go long is T-3 to T+3, and the best moment to go short is T-8 to T-4 (see attached page). As these are not the dates you have considered in your algo (unless I got something wrong), I wonder if you have tested the above intervals and why you came up with day 1 and day 8 ?
- My second question has to do with risk and MM. Your algo works with number of contracts in absolute terms, meaning that in the beginning your 10x contracts max can mean a 10x leverage (even more so if we start today), while on the long run it can also mean that you are underleveraged. In a nutshell: too much risk at the beginning and not enough towards the end. So have you thought about reasoning in terms of leverage ? For instance a constant 2 to 4x maximum number ? (also thinking in leverage terms means that you can more easily understand the risk you are taking with each position. If you have a 4x leverage and you face a 1% negative position you know that your equity is 4% down and that you cannot be wiped out unless the market is 25% against you)
Just my two cents on a fantastic idea, looking forward to hearing your comments,
Best,
B
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Hi CN,
That are really bad news. You mean Navigator and not Pathfinder.
If I get it right you have taken the version out of my discussion with @manel about the high drawdown and his suggestion how we could avoid this problem. The original version didn’t take this trade but this is of course no consolation for you. I have mentioned that I still working on it and have raised the issue with the high drawdown but maybe it was my fault to make it not clear enough.
I don’t trade this system life but before life trading I would test it in demo mode first and afterwards I would start with a small account size to verify the backtest as we all have learned that the results will differ in life trading. Maybe I should have made this point clearer.
The outcome of a trading system is the result of hundreds of trades and losers are unfortunately something you have to bear.
Best, Reiner
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