A Philosophical Question: What is the Life-Cycle of a Strategy

[outstretchedarm]

here is a question for discussion for those of you who have, over time, created strategies that make money:

What is the Life-Cycle of a Strategy? Meaning, how steps does a strategy go through as it grows from being something that is simply a good idea, to something that makes money? Here is my stab at it:

1) A Strategy is coded.

2) Perhaps a strategy is backtested.

3) A strategy is paper traded in real time. it makes a few big trades, and a lot of bad trades. It is probably not profitable at this stage.

4) An exit strategy that fits the entrance strategy is developed

5) Controls begin to be created to eliminate the bad trades. Rules for not trading against the trend, oscillators are added, etc

6) The strategy begins to become profitable in real time paper trading

7) We try the strategy in real time with real money.

8) More quality control -- eliminate the bugs that got us into bad trades.

9) Ongoing tweaking.


Does anyone else have thoughts on this process?

[outstretchedarm]

Months later, I'm still curious on other traders' (automated or otherwise) thoughts on this.

[GAVETSO]

ys weare in the developing processs we have over 2 years developing our custom tools

[sledge]

Originally Posted by outstretchedarm

Months later, I'm still curious on other traders' (automated or otherwise) thoughts on this.

Your restrictions eliminated everyone from responding.....

"here is a question for discussion for those of you who have, over time, created strategies that make money:"


Honestly, I missed the original post and the followup.

Lots of discussion on other forums about curve fitting and putting so many restrictions on your strategy that it doesn't work anymore.

With regards to "backtesting", are you in strategy analyzer, market replay, or live/sim?

[outstretchedarm]

Originally Posted by sledge

Your restrictions eliminated everyone from responding.....

"here is a question for discussion for those of you who have, over time, created strategies that make money:"


Honestly, I missed the original post and the followup.

Lots of discussion on other forums about curve fitting and putting so many restrictions on your strategy that it doesn't work anymore.

With regards to "backtesting", are you in strategy analyzer, market replay, or live/sim?

Why would I have eliminated everyone from responding, unless *noone* is making money from NinjaTrader?

When it came to backtesting (which I'm actually not a big believer in, but I realize others are) I was thinking of strategy analyzer.

[sledge]

Originally Posted by outstretchedarm

Why would I have eliminated everyone from responding, unless *noone* is making money from NinjaTrader?

When it came to backtesting (which I'm actually not a big believer in, but I realize others are) I was thinking of strategy analyzer.

It deals more in theoretical process.

I'll try to search for it tonight. I'm on my phone at the moment.

<can't find it, sorry>