ES Reversal Method
- Thread starter no_pm_please
- Start date
I just disagree.
Trading is not an art but a science. That's why they hire quants and not artists to run trading desks these days.
Program trading accounts for 40% of NYSE volume. You think it's done that way because they lose money doing it? Institutions are also downsizing their trading desks as they automate. The only place I can see intuition playing a role is in the initial brain storming phase of system development.
Without trying to cast stones, I think NoPM's almost immediate abondonment of his rule based methodology merely demonstrates that he is unable to quantify what he is doing and has got caught up in the emotional side of trading. This not only costs money but leaves one unable to adjust the initial approach with any degree of certitude so that it might work in the future.
Sorry if I took the journal a bit off topic but I think it is an important point to consider and understand.
Quote from ssternlight:
I just disagree.
Trading is not an art but a science. That's why they hire quants and not artists to run trading desks these days.
Program trading accounts for 40% of NYSE volume. You think it's done that way because they lose money doing it? Institutions are also downsizing their trading desks as they automate. The only place I can see intuition playing a role is in the initial brain storming phase of system development.
Without trying to cast stones, I think NoPM's almost immediate abondonment of his rule based methodology merely demonstrates that he is unable to quantify what he is doing and has got caught up in the emotional side of trading. This not only costs money but leaves one unable to adjust the initial approach with any degree of certitude so that it might work in the future.
Sorry if I took the journal a bit off topic but I think it is an important point to consider and understand.
Automation may be ok for institutions because they are cutting labor costs. and feel that smaller gains are ok due to the fact they are not having to pay big salaries. Experienced humans make more money in general.
What i heard from a very serious person was: Never do decisions how to trade if you are in a position, do this stuff before or later.
That`s also a serious theme at Van Tharp and Douglas, they go in the depth of psychological issues, it`s nearly impossible to make good decisions if you are in the emotional stress of beeing in a trade. They describe a lot of human mistakes nearly 100% occuring if you do tradingdecisions in the trade. One simple thing is the lotto effect, cause people own a lottery(paper, bill ?, uuh my english..) they expect this to have an extrem unrealistic high chance of win, same if you are in a position, you are not more able to have a neutral sight of marketaction...your interpretation of your charts/indicators is different if you are in a position. I personally have plenty of psychological issues myself i could not yet master...
That`s also a serious theme at Van Tharp and Douglas, they go in the depth of psychological issues, it`s nearly impossible to make good decisions if you are in the emotional stress of beeing in a trade. They describe a lot of human mistakes nearly 100% occuring if you do tradingdecisions in the trade. One simple thing is the lotto effect, cause people own a lottery(paper, bill ?, uuh my english..) they expect this to have an extrem unrealistic high chance of win, same if you are in a position, you are not more able to have a neutral sight of marketaction...your interpretation of your charts/indicators is different if you are in a position. I personally have plenty of psychological issues myself i could not yet master...
If experienced humans (read traders) made more money than IB's wouldn't dump them to automate.
I don't really want to take the thread off-topic. I'll agree to disagree with you on this one and if you feel like adding a last post on it that's OK by me.
Quote from ssternlight:
If experienced humans (read traders) made more money than IB's wouldn't dump them to automate.
I don't really want to take the thread off-topic. I'll agree to disagree with you on this one and if you feel like adding a last post on it that's OK by me.
Humans must be paid and it takes away from the larger gains that humans make . It takes away enough of the profits that the smaller automated gains become more profitable. An experienced human who is paying themselves is better off without automation. Automation for specs is there simply as a commission extraction device.
I hope i remember the website, but not now...There`s a serious trader saying the same about tradedecisions. He is completely mechanized, if asked what he does if abc is falling this amount, than climbing here and than doing this, he is able to give the answer in seconds, the rules are nailed before...he claimed to have for every single possible marketmove the secondfast answer what to do...