All eggs in one basket still a bad idea.

[Overnight]

If you are going automated, you need to know before hand what performance or lack there of will nullify your model(s). If you are within the expected range, put emotions aside and plow through it or find another hobby.

But that is just it. There's no emotion in an autostrat, right? His model failed, like 90% of all the others?

 

[fan27]

But that is just it. There's no emotion in an autostrat, right? His model failed, like 90% of all the others?

From the article:

"As his losses surpassed 10%, Rachmat was compelled to intervene: He took some decision-making power back from the algorithm."

 

[fan27]

haven't kept up with your thread, how is it going?

Recovering.

 

[King Sisyphus]

If you are going automated, you need to know before hand what performance or lack there of will nullify your model(s). If you are within the expected range, put emotions aside and plow through it or find another hobby.

Exactly. This is why proper professionals use Monte Carlo analysis to establish a statistically valid operational envelope for their model(s).

 

[MarkBrown]

the problem with most all mechanical trading is the drawdown. because of the value of the contracts i trade now i use a base trading model with good money management and pick the trades using statistics.

 

[murray t turtle]

Lol, everyone is fully automated until the draw down becomes unbearable.
I remember one automated trader saying - we learned that although a system looked great even with 25% DD, in reality we could not stomach more than 15%

%% Depends on the market; 25% dd is much better than a loss, in QQQ, for example.
Easy for me to say -not long QQQ now + never long TSLA, which may dd down to zero/goose egg LOL.. ,

 

[Amun Ra]

It's only a bad idea to put your eggs in one basket if you lose.