Great article emphasizing a system approach. I still struggle with the temptation to visit the strategy camp even tho I know that the system approach works better for me. Thanks for a well written reminder!!
I don’t think that feeling of wanting to look into other strategies ever goes away completely.. although the more time you spend in the markets, the more you understand what absolutely may not work for you. And that’s arguably just as valuable hah
What survives across 17 years is rarely the indicator.
It is the architecture around it.
Regime tells you how aggressive to be. Relative strength tells you where capital is concentrating. Position sizing decides whether being wrong is survivable. Invalidation keeps one bad idea from becoming a thesis. Convexity matters only after those layers are already aligned.
That is why a trading system is closer to an operating system than a signal generator.
Mr Dennis' faithful trend-following and buying the break-outs, etc., have long been discounted by the markets -- commodity and wider. I sensed that about 30 years ago and not only stopped chasing virtually all breakouts, I devised a tactic to fade a 20-bar breakout and bet on it to go straight to the opposite border of the congestion and hunt the Stops there.
The opposite of Mr Dennis' style turned out to be one of the most profitable tools in my box.
I disagree. It’s very simple. Follow the primary trend of the market. Focus on the best sectors. Drill down to the best stocks. Own them. And I have the data to prove it.
What really stands out to me is the distinction between knowing a system and being able to execute it when the system inevitably starts hurting. A lot of traders spend all their time trying to improve entries, when the harder skill may be developing enough confidence in the process to survive a completely normal losing streak without modifying, abandoning, or overriding it. A good outcome doesn’t necessarily validate a decision, and a bad outcome doesn’t necessarily invalidate one. That separation between process and outcome is probably one of the hardest things in trading to actually internalize.
"What started out as a brain dump ended up being a four hour article" - and that is exactly why it is worth reading. Seventeen years of trying scalping through position trading and landing on one framework is the opposite of the usual strategy-of-the-week content. The part that resonated most is admitting how much was lost on indicators before the process existed.
i know the grind of iterating on a system for decades. i've personally refined my own approach over 12 years, and one thing that resonates is how small tweaks can significantly impact performance. for example, adjusting my risk-per-trade from 2% to 1.5% reduced my drawdowns by 30% without impacting overall returns.
Thanks for the this. I have been trading for more than 20 years and have been through the same process. Now usimg: Market regime - VP and Avwap - then price. Simple but it works
Knocking it out of the park with these! Nice read.
Thanks Randy!
Very straightforward Methodology. Bet on the Best of the Best. Thank you
Thank you Arvin!
A great reminder that a robust trading system is not about knowing the rules, but having the discipline to follow them consistently.
Absolutely agreed Tony
Great article emphasizing a system approach. I still struggle with the temptation to visit the strategy camp even tho I know that the system approach works better for me. Thanks for a well written reminder!!
I don’t think that feeling of wanting to look into other strategies ever goes away completely.. although the more time you spend in the markets, the more you understand what absolutely may not work for you. And that’s arguably just as valuable hah
What survives across 17 years is rarely the indicator.
It is the architecture around it.
Regime tells you how aggressive to be. Relative strength tells you where capital is concentrating. Position sizing decides whether being wrong is survivable. Invalidation keeps one bad idea from becoming a thesis. Convexity matters only after those layers are already aligned.
That is why a trading system is closer to an operating system than a signal generator.
The edge is not predicting more.
It is making fewer decisions that can kill you.
Mr Dennis' faithful trend-following and buying the break-outs, etc., have long been discounted by the markets -- commodity and wider. I sensed that about 30 years ago and not only stopped chasing virtually all breakouts, I devised a tactic to fade a 20-bar breakout and bet on it to go straight to the opposite border of the congestion and hunt the Stops there.
The opposite of Mr Dennis' style turned out to be one of the most profitable tools in my box.
Way too complicated.
KISS.
I disagree. It’s very simple. Follow the primary trend of the market. Focus on the best sectors. Drill down to the best stocks. Own them. And I have the data to prove it.
What really stands out to me is the distinction between knowing a system and being able to execute it when the system inevitably starts hurting. A lot of traders spend all their time trying to improve entries, when the harder skill may be developing enough confidence in the process to survive a completely normal losing streak without modifying, abandoning, or overriding it. A good outcome doesn’t necessarily validate a decision, and a bad outcome doesn’t necessarily invalidate one. That separation between process and outcome is probably one of the hardest things in trading to actually internalize.
"What started out as a brain dump ended up being a four hour article" - and that is exactly why it is worth reading. Seventeen years of trying scalping through position trading and landing on one framework is the opposite of the usual strategy-of-the-week content. The part that resonated most is admitting how much was lost on indicators before the process existed.
i know the grind of iterating on a system for decades. i've personally refined my own approach over 12 years, and one thing that resonates is how small tweaks can significantly impact performance. for example, adjusting my risk-per-trade from 2% to 1.5% reduced my drawdowns by 30% without impacting overall returns.
Thanks for the this. I have been trading for more than 20 years and have been through the same process. Now usimg: Market regime - VP and Avwap - then price. Simple but it works
Very intriguing question all throughout....accompanied with a well researched stack...good work...keep enlighting us...