Can automated trading system be profitable?

rosy2: well, that is exactly my point. you can't "precisely" define a double top. Your eyes see it as being attractive or not. If you get technical, of course you can look at how steep the valley in between is, how sharp or not the peaks are, how long, and so on... but just like with human beings, you just like a person, you don't say: i like him because and then you go enumerating an entire list of features.

you're all probably right, a good program might recognize maybe 80% of double tops or bottoms. maybe i like being a trader rather than a programmer and don't see the fun in this automated trading thing.

i have to confess i am biased when it comes to automated trading because most has been based until now on formulas (indicators) and being a daytrader i only lost money until i started to use only price patterns. one explanation is that an indicator will always have a value for you whether the market message is clear or confusing and for me that is a no go.
 
Quote from alex.samant:

rosy2: well, that is exactly my point. you can't "precisely" define a double top. Your eyes see it as being attractive or not. If you get technical, of course you can look at how steep the valley in between is, how sharp or not the peaks are, how long, and so on... but just like with human beings, you just like a person, you don't say: i like him because and then you go enumerating an entire list of features.

you're all probably right, a good program might recognize maybe 80% of double tops or bottoms. maybe i like being a trader rather than a programmer and don't see the fun in this automated trading thing.

i have to confess i am biased when it comes to automated trading because most has been based until now on formulas (indicators) and being a daytrader i only lost money until i started to use only price patterns. one explanation is that an indicator will always have a value for you whether the market message is clear or confusing and for me that is a no go.
More...

you can start here: http://www.tradingpatterns.com/

Let me think - would I prefer to have an automated trading system that freed up my time to do what i want OR do i want to guess as to what the market will do and spend my entire day in front of a computer screen. I know that's a hard one.

To be perfectly honest, trading isn't fun - it is down right boring. Gambling is fun.

So you are telling us that you will be able to detect, with 100% accuracy, every double top on say 2000 charts every day. Give me a break.

Spend the time to learn programming, code your ideas and then have fun not trading. Yes generic indicators don't really work; your own custom ones will.
 
Quote from newguy05:

Is there really a profitable automated trading system / bot? I mean with a proven >5% return of 1-2+ years.

If yes, then why havent all the wallstreet firms with their billions of dollars using it?

I am a senior system developer (j2ee, database, etc..) professionally and have spent quite a bit of time researching/creating poker bots but at the end i realized it's just not possible to create a good bot in any game that is heavily dependent on human emotions. I would imagine a trading bot is much more difficult as the cominbation is almost infinite.
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If you failed to build a profitable Poker Bot...
Then you will likely fail at Automated Stock Trading.

Specific strategies for profitable poker play are easily found at places like 2+2...
Any genius level person can be beating SNGs within 6 months.

The main problem with Poker Bots is not connectivity...
It's AI related...
Making the 2-3% most difficult decisions as well as a human Poker Pro does.

Also... it's considered to be "cheating" and illegal on all poker sites.

In contrast...
You will not find anything useful at ET...
In terms of profitable stock trading strategies.

Pro Traders do not talk in detail about their work...
While amateurs fill up this place with laughable nonsense.

If you are not an experienced trader with a profitable approach...
Then you have nothing to automate.

The idea that a novice can "automate" his way to trading success... is false.
 
I would like to respectfully differ on a couple of points, there are no actual strategies on ET, but there is a lot of very useful information if you dig around (you need to identify the people who seem to know what they are talking about, which is difficult among all the noise), if you're polite some of these people may answer a PM or two. As for novices automating their way to success, probably not, but by the same token you don't need to be a master trader to automate successfully.
 
Quote from Craig66:

I would like to respectfully differ on a couple of points, there are no actual strategies on ET, but there is a lot of very useful information if you dig around (you need to identify the people who seem to know what they are talking about, which is difficult among all the noise), if you're polite some of these people may answer a PM or two. As for novices automating their way to success, probably not, but by the same token you don't need to be a master trader to automate successfully.
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Actually, I agree with you.

There is useful information on ET...
But because it's > 90% noise...
It would be nearly impossible for a novice to separate the wisdom from the hogwash.

The real problem with ET...
Is that there is ZERO moderation from mods...
And no "self-policing" from posters because:

(1) The owner(s) don't give a rats ass about quality...
Since they are in the business of helping brokers fleece the lambs...
And ONLY traffic matters... the dumber the better.

(2) The number of professional posters here is very small...
And this tiny group can't be bothered to debunk every idiotic post...
And take constant abuse from 19 year olds.

This is in SHARP CONTRAST with the #1 Poker Forum 2+2 where:

(1) The owner, David Sklansky, is a very reputable guy...
And has a strong personal interest in maintaining a quality forum.

(2) A lot of serious players post there...
And novices posting useless information are shut down very quickly...
Either directly by the mods... or by intense peer pressure.

In other words...
ET has completely sold out...
And is a just whoring for the Securities Industry...

While 2+2 Forums is much more than a front for the Casino Industry...
It's a personal project of David Sklansky's that reflects his integrity.
 
I coded my first script on wealth-lab based on my current strategy, backtested with about 20 symbols i regularly monitor and looks ok for first run, obviously tons of tinkering still required. But this is where the frustration kicked in.

Wealth-lab has a very good script language / api / backtesting. But when you actually try to use your script to scan the market, it craps out with just 10-20 symbols due to performance and i have a good pc. This obviously is not going to work.

So i spent all day researching the various trading platform software and realized how limited most are except TradeStation.

Here's what i am looking to do:

Program custom tech indicator conditions into a scanner, then scan the market (ie: nasdaq small caps etc..). Most platforms only has preprogrammed screeners which are useless. For example, i want to find stocks that:

Period: daily
MA(10) down from T-10 to T-7, then up from T-3 to T
AND
ON T MA(10) cross over EMA(30)
AND
CMF > 0.1
AND
etc...

What other trading platform can do this? besides TradeStation. I dont even care about features to auto placing orders etc.., just the ability to use a custom script to scan the damn market.

--------------

Now about the TradeStation fees, it's very confusing. Do you pay a $90 flat monthly fee? There's also a fee to just get the streaming datafeed? Is it an actual brokerage where you deposite fund into, or just a software platform linked to your own brokerage?

Thanks
 
Quote from newguy05:

If yes, then why havent all the wallstreet firms with their billions of dollars using it?
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Billion dollar corporation use automated trading systems every day and make money. Don't you listen to the news? For example a few years ago Bank of America purchased Automated Trading Desk, a company which auto-trades and total volume accounted for something like 10% of all trades on the NASDAQ.

They all do it - banks, brokers, insurance companies, etc.
 
The original poster's question is easily answered, as you implied, with an emphatic 'Yes'. Now, you have to be a little careful because "automated trading" is a loaded word.

For example, Automated Trading Desk did a lot of market making. I'm sure they traded their own account as well, but automated market making systems are entirely different from automated systems designed to execute a trading strategy.

Now, even the latter in the above is possible. There are firms doing this today with great success and even individuals. One doesn't have to look far to see it in action.

Yes, you can build a profitable automated trading system. This system can be profitable using numerous methods of trading. As always, the discipline, infrastructure, and capital required are often times the limiting factor as to whether YOU can be profitable automating your trading.

Take care!

Louis
 
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