Automated trading doesn't work

Quote from From The Safe:

I learned so much on this site, that sometimes I'm tempted to give back my 2 cents.
In reference to automated trading, whether it works or not. I already expressed my opinion on a previous post.

Here are my 2 cents: Do not give up on automated trading or AI robots. Repeat: Do not give up on automated trading or AI robots.
Case in point. Another genius wrote a software and it is selling for a ridiculous price.
I got it less than 2 months ago. Resides in the computer. While the computer is on, this ingenious program scans the universe of listed stocks. I do not know for sure what rules or criteria uses. By now I suspect what it is. Maybe some RSI(2) or RSI(xx) way oversold that bounces... or something similar. And almost on daily basis shows the pics on my computer screen.

I do not paper trade with the signals. But I put them on a crude, simple excel worksheet. Religiously I enter the buys and sell (close) when they come, which is usually every day before the market opens.

Since March 27 gave approximately 150 Buys and closed, let's say about 130 of them. Maybe 10 are small losses the rest, perhaps 120!!!!!!! are profitable. I use 100 shares lots and charge $ 2 for round turn commission. No pennies on SEC charges, and/or slippage. Using Open market for Buy and following day Open for Sell. The robot computes closing prices the day it gives the signal, for BUY and Closes.

On a meager 100 lot shares, have accumulated so far an outstanding $ 14,000.00 net profits, on less than 30 trading days. Promoters will use let's say 2000 lot shares to impress you with $280,000.00 profits, and so on. It's blowing my mind.
I'm attaching the crude excel worksheet. Since it is a little long I will attach in four consecutive links. There is no real and/or paper trade, but this is not a fake either. Kindly, I will not entertain the idea of .jpg the humongous PDF accumulated and given to me by the robot. If you do not believe it, it is OK. It is so ridiculous great, that is hard to believe.

Here goes the first link. Three more will follow, I hope.

Enjoy!
From The Safe.
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I hope you didn't pay too much for your bog-standard buy-the-dip system with its perfect entries at the open of the day following the big dip :D
 
Equalizer......I hope you didn't pay too much for your bog-standard buy-the-dip system with its perfect entries at the open of the day following the big dip
____________________

Only $ 57.
I have it running on an old averatec laptop. I'm afraid that since it runs all day on the background, it could behave like a cookie and may be stealing passwords, bank accounts, etc. You never know.
On the other hand, so far I recovered the $57 many times. Once on while I watch the opening of all these depressed stocks and follow them for few hours on a 10 minute chart and if it moves above certain indicator's threshold, I scalp (or they scalp me) for few cents.
Few minutes ago I scalped few cents from CAKE and NVDA on a 10 minutes set up.
The rest of the picks are tanking on this minus -137 DOW.
Here is the list of today's picks. The symbols came last night:
ACE
ACS
BRCM
CAKE
HPQ
IRF
LOW
MCHP
NVDA
RL
Also gave the symbols to close that previously recommended. Some of the blank positions on the excel link.

I'm not recommending any symbol. Is for illustration only an to be polite and answer your question.
Best!
From The Safe
 
Quote from chvid:

Discretionary trading does not work - the only way to make money in the markets is to buy and hold.
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This is sarchasm right? If not it is probably one of the most incorrect posts of all time here. Have to be kidding.
 
Quote from doublechin:

That's just denial that it's a crap system

:p
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It really does show your inexperience. You think you have 30 years of data and not have a down year? This is exactly the unreasonable expectation I was pointing out.

Say your system had an APR of 150% and had a down year, that, to me, doesn't make it a bad system, especially with years of data behind it. There's plenty of systems I can point to with those characteristics. This assumes a reasonable sharpe around 2, not 2.5.
 
Quote from From The Safe:

irniger:
With all due respect, I'm glad I did not read your conclusions two months ago when out of desperation I started using a robot on a small live account and on a simulated account.
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Careful buying the dips when the market goes down 30% instead of rallying 30%
 
Quote from bwolinsky:

It really does show your inexperience. You think you have 30 years of data and not have a down year? This is exactly the unreasonable expectation I was pointing out.

Say your system had an APR of 150% and had a down year, that, to me, doesn't make it a bad system, especially with years of data behind it. There's plenty of systems I can point to with those characteristics. This assumes a reasonable sharpe around 2, not 2.5.
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Ummm... I would NOT trade a day-trading system that has a down year. If it's a buy and hold with yearly timeframes then maybe.

I guess I'm really inexperienced... :(

From the safe, ya it's real easy to have a nice dip buying system when the market has its biggest rally in 80 years. Geez. Go ahead and try it with real money now.
 
Wait a second. I think the phone must have rang, or I dozed off for a few minutes. When I said above:
Way more then 1/2 of all trades in the markets are not done automatically.
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I really meant to say:
Way more then 1/2 of all trades in the markets are done automatically.
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I base this on a few quotes I've read, as well as:
American markets and equity markets generally have a higher proportion of algo trades than other markets, and estimates for 2008 range as high as an 80% proportion in some markets.
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Which is from here: http://en.wikipedia.org/wiki/Algorithmic_trading

Now to be fair, there are lots of versions, even interpretations, of "algo" trading (I hate that expression/term), and different markets/sectors/etc. will adopt at different rates. Ignoring all that, though, what about the trend? The trend is not downward, but rather upward.

Could automated trading be ineffective, and all we are seeing is the lemming syndrome where everyone is acting with a herd mentality? Is that even possible, given the scrutiny that [automated] trading receives from advocates and pundits?

So what argument would someone advocating manual instead of automated trading offer to sway me? I have hard statistics on my side, what have they?

Someone posting in a forum specifically for the use of automated traders saying that it was all bunk is obviously trolling, or "picking a fight". I even asked for examples of automated strategies and tools that proved themselves as losers, but by now the troll has no doubt left long ago.

True, my only proof is my performance with cooltrade over a buy & hold strategy, but at least I'm offering something concrete. To simply say that "experts agree" is like me saying "Most people who are right agree with me".

Sheesh!

:)
 
Whether he was a troll or not, the question "does automated trading work?" is a question we all have asked ourselves at least once.
 
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