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Finding Profitable Trades in a Losing Strategy in Tradestation

Posted by David Bean on

Here is the workspace for this video. If you have the MM Algorithms, then you will have all the ELD on your computer and you can download this workspace and open it up.

The money management algorithms give you the opportunity to "pick off" winning pieces in the equity curve of a trading system. Sometimes it is easier to find these winning pieces in a very bad equity curve than it is to eliminate bad pieces in a good equity curve. This is especially true if the bad equity curve is high frequency while the good equity curve is low frequency.

The periodicity of the cycles allows us to "see" what is happening now when examining a high frequency strategy instead of looking at a low frequency strategy that loses sync with the market but because it is low frequency, it might take us a year before we realize it is out of sync.

The Money Management Algorithms allow you to use an approach like this without being able to develop a good trading system, which can be very hard to do.


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