Ever heard of the saying “You can’t have your cake and eat it too”?

It’s supposed to mean that you can’t get two good things at the same time, especially things that aren’t usually possible to have together.

But I think it’s a ridiculous saying. What’s the point in having a cake if you can’t eat it?

I don’t know about you but there is only one objective I have when I get a cake – I’m going to eat that sucker! So, why not have it all? Why CAN’T you do both?

In strategy development, you could say that trade filters are a ‘You can’t have your cake and eat it too” moment, because of 2 conflicting theories:

  1. Adding a filter improves trading strategies by removing the poor trades = GOOD
  2. Adding a filter introduces more optimizable variables, therefore increasing the chance of curve fitting and reducing robustness = BAD

Now let’s assume both of these are actually true (which we won’t go into here, that’s for another conversation), why CAN’T we do both?

Wouldn’t it be great to add filters that remove poor trades AND reduce the chance of over-fitting too?

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It might seem impossible, but it’s not. You can do it using something called “Parameterless-filters”.

Now, the name does give it away, but let me explain it a bit more anyway.

“Parameterless-filters” have NO input parameters. Zero. They have nothing to optimize so they can’t increase the chance of curve-fitting like traditional filters do. And they work great too (but not many traders know what they are or how to use them)!

In this month’s issue of the Empowered Trader club, Tomas shares 3 super-effective parameter-less filters you can use to improve your trading strategies, reduce bad trades and NOT increase curve-fitting.

In this case, you CAN have your cake and eat it too. :-)

If you’re already an Empowered Trader member, look out for it in your mailbox in the next few weeks.

If you’re not an Empowered Trader member yet (or don’t even know what it’s about), you can find more details here.

Happy trading,