A real edge hardly requires any testing
- Thread starter ma_trader
- Start date
:Believe me, it is possible to take a different and arrive at a better result, I am saying this as a professional programmer with more than 20 years experience, and extensive experience in coding automated trading systems.
Multiple simpler systems perform.better than a single monolithic, hedging can be done in more than one way, and in terms of indicators and time frames.
All the best, I am sure you will get there..!!
An example is if I think an edge might be Fibonacci price wave ratios because I've seen examples of charts with Fibonacci retracements.
So I find price waves (e.g., as in https://www.elitetrader.com/et/threads/machine-learning-for-price-wave-analysis.339646/#post-4997882) and get values of ratios of differences among the most recent five price waves to differences of the most recent two price waves.
Once I get a sample of ratios, I can visually see if any look significant as in
where the X axis has ratio sample indexes, the Y axis has ratio values, the curved line has the ratio values for 51,199 sorted samples of ratios, and the horizontal lines have a some Fibonacci ratios.
The curve will be flatter when ratios cluster around a value. But the curve doesn't have any flat or near-flat parts. So I can conclude the Fibonacci price wave ratios are not significant.
And I am not contesting that intense data mining is not the newest idea. If traders here have come a very long way, does that make a different idea invalid?
At a very high level, the best ideas come from intensely being involved with a problem for the edge part of it, and not from AI like amateurish approach, retail traders hardly have the wherewithal to do a google level AI problem solving with data.
In other words concentrate more on solving the problem rather than searching for the solution.
Albert Einstein quote. "Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution."
I agree that imagination is very important and in trading, doing something uniquely is far more important than being technically proficient. Yet, even that quote is partly gibberish IMO.
Similarly I could say that you have no chance against the many thousands of gifted discretionary traders in various institutions. They might generate 10 times better ideas and 10 times faster.
With drive and dedication, a lot is possible.
By looking at data. I might go in looking at a specific event or events but I've found my ideas are quickly disproven - the data showing that the opposite of intuition is true.
There are 1,000 ways to make monies in the stockmarket, just as there are probably, 2,000 ways to lose monies in the stockmarket as well. Programming has a place in the stockmarket as far as the math part goes. So, high frequency trading for instance, has seen quants devising ways to scalp the stockmarket for huge sums in short periods of time. That said, there are areas of the stockmarket that your programming knowledge probably, would be useless.