So how many trades are you pulling like? What's the deal with fees? Do you need to set up your own server or something? I mean fees would be horrendous.
No, you have misunderstood what type of algo trading I am doing. My average holding period is a few weeks. I probably trade fewer times than you. I probably pay less in fees than you (about 0.5% of account value in commissions annually).
Everyone can see in (almost) real time what I am doing: I publish my daily trading here every night:
https://github.com/robcarver17/reports/blob/master/Trade_report
You can see that yesterday I did 4 trades, a bit below average, but it’s rarely more than 10.
Hello globalarbtrader,
I am sticking to my eyes and the guessing game of manual clicking everyday. This is what put money in pocket. I do not care about the algo trading systems and quants traders, not my style and toooooo much work. And personally do not like working hard.
Quant and algo traders have to bet about $500,000 on about 50 algos just to make money every year.
But algo and quant trading is too hard, for me atleast, because I can never find 1 algo to making me consistent money month to month to pay my bills and get rick quickly! So I gave up.
You are the only one I know with an algo that makes money in the ES and NQ futures market. It is too hard.
It FAR easier for me to just stare at chart and guess and click and less time consuming and cheaper. Yes, I am gambling and guessing but I do not care, I got money in the bank to have fun. And that is all I care about.
I do have swing algos, but man, that drawdown for months and months is bullshit.
I loss my ass with that swinging algo last year, about $15K cash money. EVERYDAY living in drawdown begging for system to come out drawdown. Too much pain for me right now.
1 ES contract margin is only $500 and another $2000 for cushion or losses, that is $2500 investment to get rich and make monthly income.
Algo, you need about $50,000 for that big drawdown that will come. Complete waste of my time.
too much work with algo for little reward, takes too long.
So to summarise, you guys are no longer saying that quant and algo trading is nonsense and there is nobody making money out of it. I’m glad we agree on that. Instead you’re saying:
- you lost money using algos, therefore as far as you are concerned all algos are bad
- you’re only interested in having fun and gambling whilst trading, and algo trading just isn’t fun
- algo trading is too much like hard work
Fine – I guess we all trade for different reasons. I trade to make money, since trading profits form a significant part of my income (I haven’t had a full time job for over 10 years). And I can make money far more consistently with algos than I can without. And I believe this is true of most people.
And we have different ideas about working hard. Personally having to sit in front of a screen to trade strikes me personally as way too much like hard work, and also very dull compared to the more intellectual task of researching and programming. Once a system is set up, it’s a lot less work than manual trading – perhaps a few minutes per day. But horses for courses.
We’re not going to disagree on this. It sounds like algo trading isn’t an option for you. But – to repeat – that doesn’t mean an algo trading is automatically a scam.
You also say two things that are wrong:
- a non algo trader can make a guaranteed monthly profit and therefore needs less capital
- algos have bigger drawdowns, and therefore need more capital
To make money every month consistently over long periods of time is unrealistic. Only a tiny fraction of professional traders manage it (outside of the high frequency trading arena, and outliers like Rentech). If you have done that, it’s likely you have just been lucky. As you say, you’re just a gambler.
There is no reason why – in expectation – the profitability and drawdowns should be bigger for an algo system. Quite the opposite. The median performance for an automated trading strategy is significantly higher than the median performance of a discretionary retail trader using technica analysis (which is negative). This also means you need less capital to achieve a given level of profitbaility. More capital is better because it provides diversification, which is good no matter what sort of trader you are. But a less diversified algo trader is almost certainly better than a less diversified random point and clicker.
Given the figures you have used, you are taking way too much risk with your single contract. Fine if you are trading for fun:
Good Evening globalarbtrader,
My Bills due on the first of the month and I'm starving in hungry pains.
.. not fun if you aren’t.
GAT
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