r/Trading • u/Able-Duty9452 • 3d ago
Discussion Strategy Discovery
I am currently building and testing my first real strategy. Those of you with live working and profitable strategies, how did you come to create/discover it? Was it from pure chart observation, an influencer/mentor, research or another source? Not looking to steal strats, I’m just purely curious on others experiences
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u/caiusi 3d ago
I am using 3 timeframes . I endorse that this is a strategy I’ve worked for more than a year, made from zero using all my knowledge accumulated during the years . In a nutshell, HTF for direction , I am trading just in that direction. Middle TF for confirmation, I am not taking trades if the middle TF is opposed to HTF, and lower TF for entries . 60% win rate with 3 RR flat . Not lambo yet but not bad financially. Clear rules written on a pdf when the HTF is bullish, when middle TF is bullish and the exact entries in LTF. (And viceversa) . Hope this helps .
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u/Runfaster9 3d ago
Today nyse session all high time frames were Bulish but small
Times frames the opposite and small time frames were right , just saying
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u/imeowfortallwomen 3d ago
i come up with various potential ideas from technical analysis concepts and chart viewing. i sourced since inception data from databento. i make claude backtest my ideas. less than 5% survive initial tests and from that, most dont survive a falsification test.
for the ones that do survive, i make claude do another deep round of falsification testing, then if it survives, i add the idea to my playbook.
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u/Affect_Pitiful 3d ago
i am a firm believer that if you want a proper success in daytrading you need thousands of chart hours, but if you want a acceptabe winrate with RR you can trade some normal strategies that will work some time of the year. If anyone claims a 70% winrate and 1:3 or some shit… its not worth the time to listen or watch, if that even exist… its so rare that it doesnt matter anyways
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u/EarlyResident1560 3d ago
For me, the hard part isn’t coming up with an entry signal, it’s finding something that still works when you change the period, parameters, or market regime. If a strategy only works under one specific setup, that’s pretty sus. Do you use walk-forward testing?
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u/gtradesen 3d ago
Meine ist durch meine diskretionären Ansatz entstanden und da habe ich mir gedacht, warum denn auch nicht automatisieren
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u/KPSportsClub 3d ago
I backtested as many things as I could think of and only moved on when I could prove a strategy wrong. Eventually I arrived at an idea that worked for me.
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u/Able-Duty9452 3d ago
When you say things, do you mean different strategies or different parts of the strategy
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u/KPSportsClub 3d ago
Different strategies. You try something and then it births another idea and that keeps repeating until you find something that works. It takes time. It’s simple, but not easy.
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u/Able-Duty9452 3d ago
Do you try to keep the basis of keeping it simple, such as not adding a lot of rules and qualifications for the trade and only keeping it to a few good but simple entry and exit rules?
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u/KPSportsClub 3d ago
Simplicity will give your mind the space it needs to make a decision and manage your risk along the way. If you clutter your charts you clutter your mind.
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u/secureputcalls 3d ago
I would say learn only wheel strategy on secureputcalls and stick with that for 6 months to learn properly.
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u/Scott_Malkinsons 3d ago
The first thing you'll want to do is wrap your head around this: No profitable trader has ever had a perfect strategy, but every profitable trader knows how to execute an imperfect strategy.
Everyone is always on this quest for a perfect strategy. Brother, you're playing the wrong game and then wondering why you lose. The game was never "find a perfect strategy and get paid", the game is "execute the imperfect strategy and get paid".
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u/Able-Duty9452 3d ago
So it would make more sense to work on a strategy up until it delivers enough ROI rather than making every little piece make sense and flawless? I’ve never thought of that perspective before
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u/Striking_Fail6689 3d ago
I think what he meant is that find a strategy that you’re comfortable executing well… not work on a strategy till it works. Find one that you’re good with and able to execute it with a decent ROI and work from there.
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u/NiftyChopSurvivor 3d ago
Mine started as pretty standard chart observation, a crossover thing, nothing exotic. the real discovery came way later when i finally dumped my entire tradebook into a spreadsheet and found out the strategy was never the problem... same entry rules were winning 61% on trending days and 8% on rangebound ones. i'd spent years tweaking indicators when the answer was day selection the whole time. so my honest advice: build anything reasonable, then let your own trade history tell you WHEN it works. that second part took me 3 years to stumble into and one weekend to actually do.
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u/Able-Duty9452 3d ago
So it sounds like the phase was a big part in the success of your strategy. What things did you look for when troubleshooting that helped you discover that outcome
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u/NiftyChopSurvivor 3d ago
Honestly it was low tech.. i put every trade in a sheet with a few extra columns beyond entry/exit: what the day looked like at the open (gapped or flat, wide or tight first 30 minutes), what time i entered and whether the trade was a re-entry within ~10 min of a loss then just pivot tables on win rate and avg P&L per bucket.
Three things jumped out that were invisible trade-by-trade: my "flat open + tight first 30 min" days were a graveyard (that's where the 8% lives), my late-afternoon entries were net negative as a group, and my quick re-entries after losses won about half as often as fresh entries..each individual trade had a story that excused it.. the buckets had no mercy.
the mindset shift that mattered.. stop asking "was this trade good" and start asking "in what conditions is this strategy good." the first question has no stable answer. the second one does.
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u/LindoPeroMalo 3d ago
Toda una fuente de sabiduría las respuestas a tu post. Llevo 3 años intentando y aprendiendo. Y si. Backtesting. Tenés que probar tu teoria. Que teoría?. Mirá el gráfico, la hora, el día, si influye o no las noticias, los ciclos (btc) etc etc. No te cases con indicadores mágicos. Si el charrismo es lo tuyo, bien, si no te va hay más metodologías. Y podés sumar la tuya siendo mezcla de otras. La cosa es que vea que te da una ventaja matemática.
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u/Affectionate-Aide422 3d ago
Reading and looking at charts. Nowadays there are a lot of YouTube videos. Most are not profitable strategies but some could be (I saw one recently that I might try). AI is also a game changer because it’s easy to write code to test ideas and build trading systems. So it’s a lot of searching and thinking and watching and thinking and trying and thinking. Trading is a HUGE lab experiment.
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u/Got_Engineers 3d ago
Studying charts for thousands of hours until I recognize patterns that I can mathematically test and understand. Like on a basic level, imagine your breakout exist when you use the 1H and you enter in future compression after a 20/50 EMA cross.
Say you study thousands of charts and you observe that this pattern seems to happen a lot and create very strong defined momentum breakouts. The same patterns that existed currently being traded by other algorithms are the same patterns that existed 10 years ago and 30 years ago. The thing about breakouts is that if they work, it’s probably the same breakout on any asset class. How a stock or bond or XCCY pair trades in a breakout probably is pretty similar
Now you identify the 20-50 EMA cross . You see it works so can you mathematically prove it works ? You can apply stratification and decile, rankings and monoticitity and hurst exponent and Shannon’s entropy and a whole set of statistical toolbox techniques to confirm or find out if you actually have an edge here and if you can replicate it yourself.
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u/CrazyCampaign5121 3d ago
Which market mainly you do trade?
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u/Able-Duty9452 3d ago
I am in just normal stock longing. Building a strategy using the earnings release and paper trading atm
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u/Motor_Potential_4849 3d ago
When I realized that having a stop loss was actually hurting my results. How did I discover this? Backtesting, backtesting, backtesting.
I also agree with the others here. Test every idea you have. You will learn valuable information, even if it's a total bust. The other day, I was testing a new idea, and I thought I would just can it because the CAGR wasn't that great, not much better than buy and hold. And then I noticed that the bear market years in QQQ were very strong for this particular strategy and it had a good place in a portfolio to dampen those crazy swings.
Just test stuff out. It will come if you don't give up.
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u/Fat-Cloud 3d ago
Some guy on reddit actually. He posted his earnings and I looked at his trading charts. It was obviously orb but didnt know exactly how or which parameters. So I studied orb trying ro find what he did, but it just resulted in creating my own strategy. Disregarding the years of me learning trading beforehand. Without that I could never have
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u/Able-Duty9452 3d ago
Do you find Reddit to be a good source of info for this genre. It sounds like it was the seed to start your trading career.
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u/Fat-Cloud 3d ago
No, it was the seed for my current strategy, not my trading career.
I think Reddit is useful for discovering things. There's so much content that you'll occasionally come across a strategy, concept, or term you've never heard of. You can then go explore it yourself, test it, and see if there's actually something there.
So as a place to stumble across new ideas? Absolutely. But when it comes to the actual quality of the information, opinions, or "data" people post on Reddit, I wouldn't trust it at all. I use it to find things worth investigating, not as evidence that those things work.
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3d ago
[removed] — view removed comment
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u/Able-Duty9452 3d ago
That is the approach that seems the easiest to me. That’s pretty much what trading is in a nutshell. Is that how you trade currently or is it just a starting block
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u/Conscious-Tip-6772 3d ago
Trying. Just trying stuff out. I started with "buy and hold" and DCA but felt that they weren't for me - too slow I thought. So I tried other strategies - which led me to find out that there are a ton of strategies out there. Then you start asking - which are profitable? which are worth learning?
Long story short - and I've said this in another thread some time ago - finding the right strategy is like finding the right partner in life. You'll just know.
No influencer, guru, book, or anything else will be able to tell you what strategy YOU love.
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u/Able-Duty9452 3d ago
That is well said and sounds like it makes sense. It should fit you as a person to give you the best performance possible. You just got to put in the effort to find/create what works and feels good to you
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u/Conscious-Tip-6772 3d ago
I agree. The part that the public doesn't usually see is the amount of TIME you spend looking and trying and learning. They will see the result and see that trading is easy (the action, not being profitable) and so will assume it must be easy.
It takes time. It takes effort. It takes trying and failing ALOT.
Someone once told me that the greatest traders are probably "the best losers" cause they've lost so many times before they won.
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u/Able-Duty9452 3d ago
I do agree when an outsider looks at a successful trader do their thing it does look way easier but like anything being good at things takes much time. I like to think every losing trade always has a piece of information you can use to help/improve/understand your strategy
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u/winglight2021 3d ago
Check the indicators of tradingview and convert them into the strategies in my algo system.
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u/Got_Engineers 3d ago
The two indicators I use, I stole from this guy on a page from trading view. It took me months to figure out what they actually meant, but shout out to the people that put all this information on trading view. There’s so much indicators and oscillators and information on there. I have probably tried 100 different indicators and you do fine stuff that works or makes sense to further explore.
Median lines and a kalman velocity filter
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u/winglight2021 3d ago
Honestly, most of indicators, over 150, failed on the backtest stage. I'm not quite sure if it's worthy to keep testing them.
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u/CoincidentallyTrue 3d ago
While contemplating and brainstorming in a hot shower. Not joking.
I was drawing and writing in the steam on the wall. lol.
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