Damned if I do, damned if I don't

[d.allen101]

can you please clarify/explain to me why is it that a strategy that loses X amount of dollars example: if (Close[0] > EMA(10)) {EnterLong();} , if (Close[0] < EMA(10)) {ExitLong();} will still be unprofitable even if I reverse the the order entry, i.e. if (Close[0] > EMA(10)) {EnterShort();}, if (Close[0] < EMA(10)) {ExitShort();}

it appears that both sides of the trade are losers, and this I know is impossible! what am I missing here?

[NinjaTrader_JoshP]

d.allen101,

Trading is generally not something where you can just find every unprofitable trade, do the opposite, and then be hugely profitable. Fill prices makes a big difference in reality. I suggest you compare two trades side by side to see that they are not exactly identical.

[NinjaTrader_RyanM1]

You'll have to look at the trades individually to see what happened. As a general principle: A losing system does not become profitable when you reverse the direction of trades.

[d.allen101]

I absolutely understand that and that's NOT what I'm asking! I'm simply asking out of curiosity why is it that if I backtest a system and the system is unprofitable and I make revisions to the system by reversing the long orders to short orders and vice versa the system is still unprofitable...that's all I'd like to know. I'm not under the impression I can get rich by reversing orders or looking for the "holy grail" by simply reversing orders of unprofitable backtested systems!

[Jim-Boulder]

d.Allen:

Now you have my curiosity up as well--in the actual strategy you're running what are the stops vs the profit targets--just so I can play along with this riddle...

Jim

[d.allen101]

I was just goofing around that's all! it's not that serious Jim-Boulder. you can check it out for yourself. write an elementary strategy that goes long or short on some moving avg cross-over or something and if it's unprofitable which I'm SURE it will be, just reverse the orders and you'll see that it is STILL unprofitable!

I'm not trying to draw any conclusions from this to develop a strategy, I'm just not getting why the exact opposite of an unprofitable system is not profitable when backtested! that's all I was asking. no more no less!!!!

[Jim-Boulder]

I know-and I understand that you are asking out of intellectual curiosity-as am I--thats why I wanted to know your stops vs your profit targets so I could apply some logic to your question of why this works this way...

the only logical reason has to be that price action hits stops before profit targets (thus a loser)--try reversing stops and profit targets AND reverse the trade direction (as you suggested)--

In an example if originally profit target is 10 and stops are 6, set stops at 10 and profit targets at 6- (And reverse the direction as you were in your post) -this way it would seem it'd have to hit profit target first in the opposite direction...

get my logic?

Yes, all those who are reading--I know that this is no way to trade--this isn't for trading-this is to understand logic (and to understand how the backtest logic works ...

Just my 2 cents....

[Trader.Jon]

Ditto ... everything that Jim said ..
Reversing a strategy in trading to try and make it profitable is not like travelling down the highway and turning around when you go the wrong direction to get to your destination .. it is MUCH more like reversing your car in the same lane to get to the destination ... often with the same nasty and very expensive consequences

Jon