Par tracking and hybrid trading

Graybox Trading

May 29

There are several advantages to hybrid methodology, and I identify many of them on my BeyondBot page.

However, one advantage is that you have a very realistic par measure to compare your discretionary results too. In my discretionary trading, I always try to imagine a range of outcomes and compare my results to what I should have achieved. It is highly subjective.

Trading hybrid methodology using BeyondBot provides a very objective par baseline. The par baseline is the systems automated results without any interventions. We can look at this on a per trade basis but also over time.

I have noticed a few tendancies in my discretionary hybrid trading:

  1. By simply drawing in the regions I have managed to avoid many losing trades the system would have taken. This system already trades highly selectively.
  2. I seen some good trades that I was able to identify the system didn’t take because it was too selective. I may be able to loosen the selectivity and get better results by using my real-time read.
  3. I tend to take profits faster and more conservatively then the system. The system is doing better in terms of getting higher R trades by waiting until we reach full profit target.

While still early, what’s promising is that I can use this knowledge to learn and adapt my future responses. I can recognize that I may be better at identifying general market conditions but may be too conservative and cutting my winners too quickly.

About the Author

Curtis is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact him at curtis@beyondbacktesting.com.

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