FAQ (Frequently
Asked Questions) About MiniMax
-
Is the system optimized? If so, how do you know
it's not curve-fit?
-
You call your
system "short-term." Does this mean it's a day trading system?
-
Can the system be auto-traded in
TradeStation?
- Does MiniMax work with
other futures?
- Does it work with forex?
- Do you have system code for
other platforms, such as MetaStock or eSignal?
- What is the minimum
account size needed to trade the system?
- Can I get a refund
if it doesn't work?
- Do you have any
brokers who can trade the system for me?
- When I go to order the system,
it shows the online store as "Adaptrade", not Breakout Futures. Is this correct?
Is the system optimized? If so, how
do you know it's not curve-fit?
Yes, MiniMax was optimized for each market. Optimization is a systematic
approach for choosing parameter values for a trading system. Optimization involves iterating through a series of values for each parameter
and choosing the values that produce the best results. If done correctly,
optimization is an effective way to find good parameter values for a system. If
done improperly, optimization can produce an “over-fit” system that won’t hold
up well in the future. An over-fit trading system is one that has been tailored
so closely to the market data used in the optimization that it only works under
those precise conditions. When exposed to other market conditions, an over-fit
system will be unprofitable.
There are several factors that determine whether a
trading system will be over-fit. One important factor is the number of trades in
the optimization relative to the number of rules and conditions in the system.
The difference between the number of trades and the number of rules and
conditions is called the number of degrees-of-freedom. The more
degrees-of-freedom the better. A statistical test can be used to determine if
the system is likely to be over-fit on this basis. Generally speaking, the more
trades generated by the system, the less likely it is to be over-fit. All five
recommended markets for MiniMax generate over 100 trades. On the crude oil and
Yen markets, MiniMax produces over 300 trades on each market. With such a high
number of trades, the likelihood that the system is profitable due to random
chance is quite low, which suggests that the system is not over-fit
Another factor to consider is the time span over which
the optimization was performed. It's important that the system is optimized over
a wide variety of market conditions. If the system performs well historically
over a wide variety of market conditions, it's more likely to perform well in
the future. On the other hand, if it's optimized for one particular set of
market conditions, such as a bull market, then it may not do well in the future
when the market changes. For crude oil and Yen, MiniMax was optimized over 20
years of data, which covers a very wide set of market conditions. Similarly, the
system was optimized over 15 years of T-Bond data. Because the two stock index
futures (Russell and E-mini S&P) have much shorter available histories, the
optimization was limited to four years for those markets. However, even in this
case, the history includes both bull, bear, and sideways market periods.
For information on trading system optimization, please
visit the article archive for The Breakout Bulletin newsletter.
There are several past articles on system optimization,
including articles from April 2003,
May 2003, and
November 2004.
You call
your system "short-term." Does this mean it's a day trading system?
No, the MiniMax system
is not a day trading system. By short-term, I mean that it typically holds
trades for a few days. The shortest profitable trade is one day (if the target
exit is hit on the day of entry). A losing
trade will occasionally be stopped out on the day of entry. If the market
trends well, a winning trade may last two weeks or more.
The system trades on daily data, not intraday data, and does not require
watching the market all day.
Can the system be auto-traded
in TradeStation?
In principle, the system could be auto-traded in
TradeStation, but since MiniMax is not a day trading system, there is no
advantage in doing so. MiniMax gives you all the orders for the next day at the
day's close, including both entry and exit orders. Using the TS order bar, you
can place all these orders for each market at the start of the day. Exit orders
can be placed as contingent orders, such as "one cancels other" and so on. This
is a much more reliable method of order placement and execution than
auto-trading.
Does MiniMax work with
other futures?
MiniMax has been tested on the five recommended
markets (E-mini S&P, E-mini Russell, crude, T-Bonds, Yen). It's likely that the
system would perform similarly on related markets, such as natural gas, heating
oil, 10 year notes, and other currencies. However, it's up to the user to apply
the system to other markets. Because of differences between markets, different
parameter values would probably be necessary for other markets.
Does it work with forex?
MiniMax is designed for the futures markets. I
have no data on how the system would perform trading forex.
Do you have system code for
other platforms, such as MetaStock or eSignal?
Sorry. I only have system code for TradeStation.
However, the TradeStation (EasyLanguage) code is open and provided in a text
file. An experienced programmer might be able to translate the EasyLanguage code
to another platform.
What
is the minimum account size needed to trade the system?
The historical results suggest that
$25,000 is the minimum for trading a portfolio of the five recommended
markets. However, if you substitute the mini versions of the Yen and crude oil
futures for their full-size counterparts, an account size of $20,000 may
be possible. It’s better to start with more capital if possible. Being
undercapitalized is one of the most common causes of losing money in futures
trading.
Can I
get a refund if it doesn't work?
You have 30 days to evaluate the
system and return it for a refund if it does not suit you. Please see our
refund/return policy.
Do you
have any brokers who can trade the system for me?
Not at this time. However, there are
some brokers who specialize in trading systems written for TradeStation. I have
no direct experience with any of these brokers and do not currently provide
broker recommendations.
When I go to order the system, it shows the online store as "Adaptrade", not
Breakout Futures. Is this correct?
Yes, Breakout Futures
and Adaptrade Software are both owned and operated by me, Michael Bryant. I use the Adaptrade Software store to process orders
now, but the sale
is still through Breakout Futures. All policies and terms for MiniMax are as
outlined on this web site.
MiniMax Trading System
Price: $525.00
Order now through our secure ordering system.
Ordering
information.
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