Got my fingers burnt!

[clearinghouse]

Quote from abattia:

You don't mention a "forward test" ... if you are not doing these, add them to your process before you trade "live" ... and run them for long enough to ensure you can build a decent picture of how the strat behaves against real data ...

I don't do this either. What I do is tell my broker to set risk limits really, really low (where the max drop is $40-$50 or whatever), then set the strategy on 100 lots, and keep running it until I see problems. I also hardcode the maximum number of orders/fills to prevent an explosion.

It's hard to test certain systems because you can't know how it will work without real exchange interaction.

 

[Satan's Helper]

 

[lindq]

Quote from themickey:


Funny how errors often cause a loss and not a win.

Interesting observation, as I had the same thought this morning with an entry error.

The odds of entering a trade and going immediately positive or negative would seem to be about even, eh?

But of course it seldom is the case. Go figure.

 

[bone]

I agree that you got a very inexpensive lesson - if it sticks you will make that back exponentially.

BTW, I have seen and heard about many similar instances when new systems were tried out in thin overnight and late afternoon markets.

 

[WD40]

Quote from themickey:

I've written my own autotrading system which shows positive expectancy on testing and I am relatively new at trading it.
A couple of days ago I had it supposedly sitting on standby so as not to take any trades and during the day while at work the system placed a long trade at the very top of the day.
As I was leaving work I received a phone call so instead of driving, sat and chatted for 30 minutes making me even later getting home.
When I walked in the door I was down $1500.
Man was I shitted to put it mildly.
There was a small glitch in my formula which I hadn't spotted in spite of all my backtesting.

Conclussion: Several, but one which seems to come back at me often is that errors in trading are a large reason for many of our losses.
Funny how errors often cause a loss and not a win.

Anyhow, the loss really shook me up, I tried revenge trading during the night, all night in an attempt to regain my loss.
Result;another smaller loss and totally buggered at work the next day.
Went to bed at 6:30PM last night to recoup my energy.

Just thought to share, I hope to learn from this and remain positive.
Ps: Don't tell me about revenge trading, I know I was an idiot but no pain, no gain (in the lesson department of the brain)

Nobody leave their autotrade unattended. It may be auto, but doesn't mean unattended.

 

[bone]

Quote from WD40:

Nobody leave their autotrade unattended. It may be auto, but doesn't mean unattended.

Agreed. I have done it in the past ( overnights ) as a lone ranger but there were times I seriously regretted it. I am talking about simple Trading Technologies AutoTrader and AutoSpreader configurations - nothing sophisticated. I used to keep the fill alert chime volume turned way up so that I could hear it, but by the time I awoke to check it out usually it was a good fill but occasionally I wet myself prematurely. And stayed up getting out of the mess.

Every desk or group that I know of staffs their desk 24/5 if they are autotrading.

 

[themickey]

Quote from WD40:

Nobody leave their autotrade unattended. It may be auto, but doesn't mean unattended.

My system is designed to be unattended. It runs 24 hours a day Mon-Sat and has been doing that for some months reliably.
I had forward tested but this was an event which it had not come across before where I put it on standby, normally always engaged.
It has in my opinion a high rate of return so the rewards outweigh the risks. These are teething problems and also due to lack of experience on my part.
I sure am anticipating the day I can hand my notice in at work and trade full time thereby being closer to the control room but it doesn't alter the fact, the system runs 24 hours a day and I still need to sleep.
Maybe I need to set up my trade alarms to contact my mobile phone.

 

[themickey]

A heads up on how I run the 'control room' Futures Trading.

There are 4 laptops (8 monitors total)
1 = trading
1 = testing/system development
1 = Amibroker - all world market indices, years of EOD data history - 1973
1 = Internet

There are 2 x modems running
1 x UPS Backup