Does automated trading really work?

Automated trading WORKS, this is a FACT. Evidence ? Checkout the systematic Barclay currency trader index for 20+ year audited performance of several market players (big and small) who execute more than 95% of their trades through automatic algorithms.

http://www.barclayhedge.com/research/indices/cta/sub/sys.html

So automated trading really works for many people who have the knowledge to make it work. Can you make it work ? Now that's a different story.
 
if you cannot turn a profit through discretionary trading then do not even start to attempt to develop systematized strategies. You will just waste your time. Not do you have to have knowledge of how to program you also need to have advanced understanding of statistics, probabilities, math, and micro market dynamics. If you lack any of those or are not willing to become a master that all those then stop wasting your time.

Quote from profitloss999:

I have been wondering if it sounds too good to be true that an automated trading method makes money.

You do nothing, just relax and watch it making money.......

If automation works in trading, every institution would be making money. Then where does the money come from (who are the losers)?
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Quote from hftvol:

if you cannot turn a profit through discretionary trading then do not even start to attempt to develop systematized strategies. You will just waste your time. Not do you have to have knowledge of how to program you also need to have advanced understanding of statistics, probabilities, math, and micro market dynamics. If you lack any of those or are not willing to become a master that all those then stop wasting your time.
More...

You don't know anything about trading!

so shut your mouth!
 
Unfortunately the key to this is data...and nobody has databases worth trusting anymore since the financial researchers who used to be here like prof logic were asked to leave because their information was compromised and resolved in a court of law.

There are 11 traders who qualify as advisors who trade futures. I'm going to count those 11 as the only automated futures traders in the world that can make such automation work for the little guy, so tell me how rare that intelligence is out of 7 billion inhabitants on earth then tell me how many can do that in terms of a ratio.

Something like 1 out of 636,363,636... Does this ratio tell you anything about the rarity of what the op is asking?
 
Quote from WS_MJH:

Automated trading is a lot like manual trading; there are some good traders/systems and many mediocre to poor ones. To get an idea, go to collective2 and see what's around. Though collective2 probably doesn't have a standout system.
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Nearly all of dead systems were just emailed games and cloaking true identities. I don't trust C2 or their technology anymore.
 
Quote from hftvol:

if you cannot turn a profit through discretionary trading then do not even start to attempt to develop systematized strategies. You will just waste your time. Not do you have to have knowledge of how to program you also need to have advanced understanding of statistics, probabilities, math, and micro market dynamics. If you lack any of those or are not willing to become a master that all those then stop wasting your time.
More...

Probably deserve an immediate ignore vol for this comment.

The only way I have ever traded has been to trade on unique quantitative information both based on the chart and also seldomly on the judgement that my investments in certain companies won't ever lose money because the companies themselves also won't ever lose money.
 
Quote from profitloss999:


If automation works in trading, every institution would be making money. Then where does the money come from (who are the losers)?
More...

Many hedge funds do use automated trading.

Lets say everyone switched to automated trading.

The top 20% best automated strategies would take money from the bottom 80%. Just because a strategy has been profitable in the past is no guarantee it will be profitable in the future. Markets change and edges diminish in profitability.

But the more robust strategies, trading with the best discipline and risk management will beat weaker strategies which might fail under changing market conditions. The best traders will adapt their automated strategies if major changes in market conditions warrant such a change. Others may be too slow to react.

Human natures will ensure that some traders are better than others, even with automation the human element is not removed. You can always pull the plug on an automated system at the wrong time if you dont have the discipline to follow it correctly.

So its not just a matter of sitting back and letting in the money roll in.. perhaps that might happen for a while but you got to be constantly researching better and better systems to trade and swapping these in when ready.
 
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