how would you start now?

I would have started with TradeStation and thoughly backtested all my cockamamie ideas for 2 years before I put money into them. IMHO it is well worth the $100 per month they charge. It is complete and has all the additions that you will ever need. Plus they have lots of classes to help you learn to program Easy Language and use their software. One of the biggest and the best.:)
 
Forget the books and backtesting and indicators. I dont use them and dont need them. I read tons of books, none of them help me turn the corner. What actually work for me is when I discovered the following:

1. Concentrate on the stocks with news, forget the ones that are barely moving. You cannot squeeze pennies from stocks that dont move. Dont let the nontraders on ET discourage u by saying that volume is dried up and nothing is moving. They dont move because they have no news to move them.

2. Sign on to a charting service and paper trade to see if u can win. And how do u supposed to win? Mannage your paper account just like you would with real money. Control position sizes according to your account and personality. Until you can read the charts and say that it will move up/down in the next 15 min or so and have the guts to pull the trigger, dont bother open an account with real money. This is the second hardest part.

3. And the hardest part? Be on the side of the MMs and Specialists and Hedge Funds by learning what they do to take money from 80% of the traders. It's just like poker, these guys with their big account will bluff u every 15 mins to make u will fold and play tilt. I will not show you the tricks (my lessons was expensive and time consuming, nothing is free in this world). U need to learn that yourself but I hope at least I am pointing u in the right directions.

That's how I would start... and good luck with your adventure.
 
OK, looks like I still didn't get my question across. Although I do thoroughly enjoy the comments from everyone, my question was about How would you get started today, knowing what you now know, when starting to trade with a system? What problems/success do you encounter trying to write a program or system to trade? Any wasted time? I was more interested in learning about writing programs/backtesting.

I do disagree with some of the comments. Like the comments about never reading a book or buying one. I personally feel that I do not have 100 years to get this figured out on my own. If I can cut that time in half by reading and learning from the mistakes/success of others, than I will. Obviously you need to take everything with a grain of salt and not believe anything you cant prove, or understand.
 
Quote from jaronimo:

OK, looks like I still didn't get my question across. Although I do thoroughly enjoy the comments from everyone, my question was about How would you get started today, knowing what you now know, when starting to trade with a system? What problems/success do you encounter trying to write a program or system to trade? Any wasted time? I was more interested in learning about writing programs/backtesting.
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You say you're interested in trading price only. So you want to know how to write programs that trade price only? No indicators?
 
Quote from jaronimo:

OK, looks like I still didn't get my question across. Although I do thoroughly enjoy the comments from everyone, my question was about How would you get started today, knowing what you now know, when starting to trade with a system? What problems/success do you encounter trying to write a program or system to trade? Any wasted time? I was more interested in learning about writing programs/backtesting.

I do disagree with some of the comments. Like the comments about never reading a book or buying one. I personally feel that I do not have 100 years to get this figured out on my own. If I can cut that time in half by reading and learning from the mistakes/success of others, than I will. Obviously you need to take everything with a grain of salt and not believe anything you cant prove, or understand.
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Just so you know. The biggest mistake you can make is taking advice from these forums. It is a huge waste of time. I am talking from experience here. It would be far better to read some books on technical analysis and take classes at TradeStation to learn to write automatic programs. If you PM me, I can give you a small list of books that won't take 100 years to digest and sites that are worthwhile.

That said, I have gotten good leads from here for ideas that do work. But pound for pound, forums are a waste of time.:(

You need to make connections here on a personal level and those will give you the insight you crave.
 
I do use indicators, but I use them more as a confirmation to take a trade or not take a trade.

When I say I trade price, I meant that I mainly look only at the charts of what the price is doing. Then make my trading decisions based on those formations.

Since I don't trade stocks I am not someone that thinks a stock is a bargain or overpriced and therefore do not make trading decisions based on that aspect of price. Some people can do that successfully but I do not have the time or mindset to track/research/digest all the information that is available for each listed stock.

I only trade (at the moment) futures and commodities. It really does not matter to me what the price is because I have sold at 20 year lows and still made money and bought at all time highs and still made money. Obviously I am chained to the pc while I have those positions open, but you never can tell how high/low a price will go.

My interest is to learn to write/backtest/automate trading programs that make me money. I will use indicators, as long as I find ones that work for my trading style. Hell, I will use anything that works, even the old, "my dog is scratching so that means the fleas are active, so all prices are going to rise". :D I have seen a few trading programs that use less reliable information to make trading decisions.

As far as forums go, I think your comments are correct. You can find some gold, but you gotta go through tons of useless dirt to get that one little nugget.

One thing I like about the forums is its a place for like-minded, or at least like-interested people to come and talk/vent. Many times I have the markets on my mind and the wife and kids couldn't care less, as long as dad is making money at it. Sometimes you just want to talk/read about your interests
 
Quote from jaronimo:

I do use indicators, but I use them more as a confirmation to take a trade or not take a trade.

When I say I trade price, I meant that I mainly look only at the charts of what the price is doing. Then make my trading decisions based on those formations.

My interest is to learn to write/backtest/automate trading programs that make me money. I will use indicators, as long as I find ones that work for my trading style.
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You probably won't get more satisfactory answers to your questions until you decide exactly what it is you want. You can't even begin to write a program until you've defined what it is you want from it. It's perhaps easier to write a program based on indicators because they're easier to define. But it's also possible to write one based on price behavior and patterns. However, those who have written programs for one probably will not have written programs for the other.

This is not to say that you must choose between price and indicators. But if you want a program that incorporates both, you have to define the roles that each will play. You have to know what you're looking for before you can begin to develop a program that will find it for you.

And if this is still off the subject, I'm afraid I have no idea what you're looking for and will bow out. :)
 
And if this is still off the subject, I'm afraid I have no idea what you're looking for and will bow out. :) [/B][/QUOTE]


No, we are on the subject. The responses have given me a lot to think about.
 
Quote from jaronimo:

I do use indicators, but I use them more as a confirmation to take a trade or not take a trade.

When I say I trade price, I meant that I mainly look only at the charts of what the price is doing. Then make my trading decisions based on those formations.

Since I don't trade stocks I am not someone that thinks a stock is a bargain or overpriced and therefore do not make trading decisions based on that aspect of price. Some people can do that successfully but I do not have the time or mindset to track/research/digest all the information that is available for each listed stock.

I only trade (at the moment) futures and commodities. It really does not matter to me what the price is because I have sold at 20 year lows and still made money and bought at all time highs and still made money. Obviously I am chained to the pc while I have those positions open, but you never can tell how high/low a price will go.

My interest is to learn to write/backtest/automate trading programs that make me money. I will use indicators, as long as I find ones that work for my trading style. Hell, I will use anything that works, even the old, "my dog is scratching so that means the fleas are active, so all prices are going to rise". :D I have seen a few trading programs that use less reliable information to make trading decisions.

As far as forums go, I think your comments are correct. You can find some gold, but you gotta go through tons of useless dirt to get that one little nugget.

One thing I like about the forums is its a place for like-minded, or at least like-interested people to come and talk/vent. Many times I have the markets on my mind and the wife and kids couldn't care less, as long as dad is making money at it. Sometimes you just want to talk/read about your interests
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If you are making money consistently trading futures, why try stocks? A lot of very smart people feel we are entering a long term period of relative underperformance by the stock market, perhaps analogous to the '70's, when commodities made people fortunes and stocks were at best boring.

That said, if you are interested in systems building and testing, there is a wealth of info available now. I think one of the most valuable uses of these backtesting platforms is to demonstrate to you that most of the indicator based approaches you read about in various books are worthless. Backtesting is also very helpful in teaching one about the effect of stops and their placement.

In many ways I think it is easier to design a system for futures because there are only a few markets versus thousands of stocks. Stock systems basically have to become scanning systems to select stocks on the move. See the various Jack Hershey threads, particularly the one by spydertrader for examples. With a commodity, you can focus on one tradeable and come up with entry and exit criteria.

In terms of systems for individual stock trading, I think you need to make some basic decisions which will dictate how you proceed. One is time frame. Will you day trade or swing trade? Will you scalp or try to hold for most of the day? Will you try to trade stocks that are gapping up or down or will you stick to stocks that correlate closely with the indexes? Will you concentrate on a few stocks or try to get on board whatever is moving? I think the answers to these and other questions will more or less push you in certain directions.
 
Quote from AAAintheBeltway:

If you are making money consistently trading futures, why try stocks?

That said, if you are interested in systems building and testing, there is a wealth of info available now. I think one of the most valuable uses of these backtesting platforms is to demonstrate to you that most of the indicator based approaches you read about in various books are worthless. Backtesting is also very helpful in teaching one about the effect of stops and their placement.

In many ways I think it is easier to design a system for futures because there are only a few markets versus thousands of stocks. Stock systems basically have to become scanning systems to select stocks on the move. See the various Jack Hershey threads, particularly the one by spydertrader for examples. With a commodity, you can focus on one tradeable and come up with entry and exit criteria.





At the moment I am not interseted in trading stocks. But in the future that may change. My concern was to figure out how to go about designing a system to trade futures/commodities.

I would like to figure out how to have the system pick out the trades for me. I am sure that will take a lot of trial and error, but thats fine. I also like your comments about backtesting being helpful in figuring out stops. I will probably spend quite a bit of time doing that.

Right now I keep it pretty simple. The majority of my trades would probably be considered trendfollowing. Hey, if it works, and its simple, why try to complicate it?

For instance I was short OJ for about 6 months. Pretty boring, but it kept making money. Then it started feeling weird so I got out. Then I felt it was going to turn around, but since I had no verification I just bought a bunch of calls, just in case I was wrong. That was about 3 weeks before the first hurricane hit. The options are working out fine.

When I first got into OJ I could look at the chart from across the room and see that it was obviously in a downtrend. When I got out it just felt weird. I have no idea how I could translate that into a programming code. I think the big downtrend I could program (maybe) and then issue buys or sells based on that, but I have not spent any time trying to figure out the "feeling".

I have gotten a lot of good feedback so far. I think my next step is to sign on with Tradestation or some other platform, and start playing with it.

I have been kicking around a few trading ideas and until I came across backtesting I really could not try them out without putting money on the line or spending tons of time papertrading. (I am a huge believer in papertrading). One of the ideas is so simple, I can't see how it cannot work. I only say that because many people discard anything simple as ineffective, so theres a good chance nobody is using it.
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