004: Nick Radge discusses system design, the best type of trading systems, handling a bear market, measuring performance and the difference between successful traders and everyone else.
Better System Trader
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Is It Necessary to Optimize?
Over optimization, or data mining is basically taking optimal imputs from the past and expecting them to continue to work into the future. When you optimize, it's a natural thing for people to want to get that wind rate very, very high. It sells books. High wind rate systems unless they have a high frequency don't generate more profit than something simple like a trend following strategy that has a higher dollar win per tray. And unfortunately, one guide blew his account up in one night because of these data mind patterns. They will never work in the future.
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