I didn't mean to imply that such an AI existed yet. My point was that traditional linear indicators will not be consistent in a non-linear market and, therefore, we maybe should look towards some form of AI that will adapt to market conditions. I believe Jacko is quite correct in his trend following strategy but an AI would hopefully mitigate DD with hedges during counter-trends.

As for martingales, I have never been a big fan. I could be wrong, of course ( I often am).

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"Time is a great teacher, unfortunately it kills all of its students"

orion such AI does exist and its here in tsd. its a non-linear artifical intelligence expert based on a 4 layer perceptron of accelerators and the weights can be optimized in a walk forward manner. u can make it evolve, and at that point it would be real artifical inteligence. beause of the nature of the EA and its architecture the entries will be a strong point for the EA. my comments on heding it was to hedge it against a negative image of itself. a second AI Expert in reverse. just keep tight stop loses on both and take the profits on the EA thats on the winning side.

search for artificial intelligence and look for electricsavants thread.
i tried to post the link but the link doesnt work.

im not a fan of martingale either. but it has to be used for the scientific holy grail because it is the system with the highest pip intake.

I stand corrected! Thanks for the info.

As far as ES goes, i have encountered him on different threads and find him to be quite intelligent and even coherent while taking his meds.

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"Time is a great teacher, unfortunately it kills all of its students"

You sound new to this game, a lot of pure ideas which I guarantee the market will beat out of you. A 'holy grail' is not the "highest possible profit", it's anything that wins more than it loses, it's that simple. Think about it, if you have something that does that one simple thing, your made. To date, I have only seen one EA which backs up this claim with actual live money results, not hot air, bullshit & and mysteriously resetting demo accounts (and guess what, it ain't on this forum & it ain't for sale) so I know it's possible, and talking to it's creator this is what I picked up... Forget all this AI trend following martingale hogwash, just manage your risk properly and be ready to react. Risk management is always the last thing that gets considered around here, after a few (demo) accounts get wiped. You would think the message would sink in after a while, but no (witness steinitz's backpedaling on his 'god dammed ATM machine!', his words, not mine). Manage risk first, take profits second, that's it.

yeah craig i agree with everything you said.
great post really serves as a great wake up call. and should for many others too. I hope the market beats out all the ideas outa me soon, because then ill be able to sleep at night.

Wow Orion good idea about pairing a trend following system with AI and having the AI potentialy mitigate DD with hedges during counter-trends.

thank you for sharing.

Elitecamper,

I would like to discuss these 2 very strong statements you made because they surprise me a lot.
- First "the holy grail can be mathematicly proven", could you please elaborate on that, give us more information or links to documents that demonstrate it. From my knowledge the people in Universities working in the market theories support more an efficient market theory, rather than a "holy grail" theory. So anything supporting your statement would be very interesting.
- The strategy is a martingale: again from my knowledge (I may be wrong) if there is 1 system that can be mathematicly proven that it fails it is martingale. So in my opinion it should be the last one you should think to use.
Martingale fails at least for 2 conditions that are requested in order to have it work and that cannot be met: your account needs to have an infinite some of money, and you place orders with an infinite sze of lots. (I think it's hard to put orders over 100 lots)
But it's maybe only me who misunderstood what you said.

elitecamper,
I would suggest that you start reading about stochastic (predicting the next move )

Now in nonlinear switched systems we can have either a common solution or a global solution, common solution means that the solution will satisfy the equations of the system over the whole region (let’s say one year) so I wouldn’t recommend that, global solution will satisfy the equation for each sub system over that small period.

In your search for a control system look for a global solution, which means you need t o cut down your system to smaller periods and hence you will end up with a new equation for each period (months or week) and adjust the feedback (current price) to change the state variables accordingly
There is a good book about this called Switching Systems and Controls by Daniel Liberzon, however I won’t recommend his approach as he use lyapunov function to prove most of the theories, the issue with this is that you can get a very good results if you got the lyapunov function but there is no easy way to find the lyapunov function

Using stochastic will be a better way to approach this problem(Holy grail ) I am sorry I didn’t made any research about this issues, but once I do I will let you know

I admire your scientific approach I wish all the luck and success

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by the way if you took the daily setting form the flash files I send to you, you will be able to get the daily trend ( or lets say the new day trend based on the previous days and yesterday candle ) however keep this approach to your self and please don't post it here its copy right material.

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Personally, I think there should be a ban on the use of HG in thread titles - if only to keep down the clutter as it attracts newbies like moths to a flame. Every month or so you find the same stuff being regurgitated, (normally be a newbie to forex), which is fustrating.
@Craig, completely agree with you, especially about Steinez strategy. I've been away for awhile and was completely amazed by the fervour being generated by Steinez. I was incredulous after spending several hours going through the threads in various forums to learn that this 'systems' basic premise is 'trade with the trend' - and that's it! No money management apart from vague references to trade multipe pairs to manage risk, no exit strategies, nothing!
It has been shown that 'entrys' have a relatively minor influence when compared to risk management over the long haul. But rather than concentrating on this, 90% of people devote their time to picking the 'best' entry and then nothing, just hoping it works out.....