Happy Friday traders.
The best message I got recently came from someone who watched the fit, fill, fluke video. They wrote in to say they'd built the same three tests on their own. Years of futures data, dozens of ideas, thousands of combinations. Every one of them died. Their original edge turned out to depend on a price a market order could never actually get. And when they moved every entry to a random day, same time, same stop, the random days beat the real ones.
Then they asked the question underneath all of it. Where does an edge actually come from? Did mine start on the chart, or in a test?
Here's my honest answer. Mine came from watching. I watch correlated markets, and over time I got a feel for how they react to each other. The testing came after. Its job was to check what I'd seen and refine it.
My first few years I jumped between strategies and didn't really know what I was doing. What finally worked was two to three years watching the same market.
And even now, my automated system doesn't trade exactly the way I do. There's an intuitive part I haven't been able to capture in code yet.
So here's what I'd pass on. A test can tell you an idea is fake. It can't hand you an idea. Run thousands of combinations with no reason behind any of them and the tests will do their job and kill almost everything. That result means the tests are working.
If you're stuck where they are, pick one market and watch it until something repeats. Then test that one thing.
Hit reply and tell me. Did your best idea come from something you saw on the chart, or something a test turned up? It comes straight to me.
— Drew