man vs machine

[Kmanster00]

i use mechanical trading and it suits me.

a discretionary trader can process much more non linear informatin than a computer which is why sucessfull traders can be extremely profitable.

the trade off is that part of this information is emotional and this is where the huge challenge is and why failure is high

i run a portfolio of trading systems 15 although it could be 100 and view things from the perspective of that what happens trade by trade by trade by trade is irelevant. using large numbers, 53% of trades are profitable, whihc leads to 63-70% of profitable days which leads to prfitable months

are there periods where i know a trade will lose, yes. but then i have also been surprises.

 

[maxpi]

We've learned a bit about emotion in the recent years. It appears to be true that separating decisions from emotion is not mentally healthy... in fact, there are some brain emotional activities that occur a few seconds every time before we make a logical decision!! That throws the idea of "purely logical decisions" into question...

To me that says that it is not only paramount to develop a winning strategy, it has to be one you are happy to put in place if you are trading it manually.. I have a strategy or two that I hate to actually operate, the human error factor just becomes huge because the speed and agility required is too much for me.... I have another one that is more comfortable but it requires so little of me that I want to insert trades in it just to keep busy...

I am working to integrate my strategies thusly: the one I hate to operate I'm fully automating it if possible. The other one I am semi-automating it with the machine not letting me place trades that are not with the system... I think I can be in a happy equilibrium after all that software is in place...

 

[Kmanster00]

i should have posted this first

how one trades using discretion is different than how one trades using mechanical aproach.

no one will evey have any success tyring to take a process that they thingk they use to trade and automating it. There are far too many inputs that traders rely on that enver make it into what they think they are trading on.

also, to another comment about comfort. Automated Trading should never be comfortable. it works on making a large numebr of trades and accepting that losers will happen.

 

[rosy2]

Quote from panta_rhei:

Hi,

I'm also aware of the fact that trading gets more and more automated, which especially regarding the discipline-matter is totally logically, so I was wondering to what degree this goes on and where there gonna remain the opportunities for "humans" within trading.

Which specific areas are affected stronger compared to others?

exchange traded securities are affected. Anything that is mindless can be automated (ie. middlemen, pit fillers, clerical staff). Now you have a few guys monitoring many stocks/options where before you had many guys monitoring a few stocks/options.

the opportunities are in markets where information is NOT easily accessible. "clubby" type atmospheres...members only.

 

[ehsmama]

Quote from panta_rhei:

Hi,

I'm very new to the whole topic. I was reading "Trading in the zone", and I've got the impression that the main issue in successful trading is the right attidude and discipline, which is probably nobody answering back.

I'm also aware of the fact that trading gets more and more automated, which especially regarding the discipline-matter is totally logically, so I was wondering to what degree this goes on and where there gonna remain the opportunities for "humans" within trading.

Is it gonna be all about coming up with new trading strategies and then to program sth which gonna execute the strategies or are there gonna remain opportunities in actual trading?

Which specific areas are affected stronger compared to others?

What's about "intuition"? One of our many (still!?) huge advantages, especially relevant in trading??

I'd really appreciate your oppinions about it!

The best documented return that I know of by a Man is 11000% by Larry Williams. Also one Market Wizard ( I don't remember his name) took 25K to 1 Million in just 1 year.
I have never seen/heard of systems developed that had return of even 200%.
So, I think system trading is a ROAD to mediocrity.

 

[ozzietrader]

Quote from VTI0990:

Actually I disagree, especially with the last part. I don't know much about systems, I'll admit that. But there are people, and I have seen them, who do happen to have the right attitude and the necessary discipline. Trust me when I say they would be far, far more valuable to any prop shop than some dolt with a system. All systems will eventually not make money anymore. A good trader who has "the right attitude and discipline" will adapt to the market and continue making money. As a matter of fact, he will most likely be exploiting that change to his advantage.

Saying 'all systems will eventually not make money anymore' is just wrong.
Also, there is not a single trader on earth who is successful without a edge or a shitload of luck.
A profitable edge is the very core of successful trading, without it, we are flying blind.
rickty is right, there should be more emphasis on a true edge as opposed to the psychology side of things.
Some people spend their entire lives seeking out a edge and they still die trying. Their discipline and emotions didn't matter a shit in the end.

 

[ozzietrader]

Quote from ehsmama:

The best documented return that I know of by a Man is 11000% by Larry Williams. Also one Market Wizard ( I don't remember his name) took 25K to 1 Million in just 1 year.
I have never seen/heard of systems developed that had return of even 200%.
So, I think system trading is a ROAD to mediocrity.

How long did it take Williams to make that return? Seykota made 250 THOUSAND PERCENT on one of his clients accounts (i assume that's the market wizard you are talking about).

"During that period, the accounts Seykota managed have witnessed an absolutely astounding rate of return. For example, as of mid-1988, one of his customer's accounts, which started with $5,000 in 1972, was up over 250,000 percent on a cash-to-cash basis."

 

[BJL]

Quote from ehsmama:

The best documented return that I know of by a Man is 11000% by Larry Williams. Also one Market Wizard ( I don't remember his name) took 25K to 1 Million in just 1 year.
I have never seen/heard of systems developed that had return of even 200%.
So, I think system trading is a ROAD to mediocrity.

The real question is ... can you make 11000% or turn 25k into 1 mln. Or are you better of on the road to mediocrity?

 

[ehsmama]

Quote from ozzietrader:

How long did it take Williams to make that return? Seykota made 250 THOUSAND PERCENT on one of his clients accounts (i assume that's the market wizard you are talking about).

"During that period, the accounts Seykota managed have witnessed an absolutely astounding rate of return. For example, as of mid-1988, one of his customer's accounts, which started with $5,000 in 1972, was up over 250,000 percent on a cash-to-cash basis."

It took Larry somewhere around 1 year.
http://www.robbinstrading.com/worldcup/standings.asp

Also, Seykota may not be a completely mechanical trader. Read his interview carefully and you find that he uses systems as a guideline for his decisions.

 

[ehsmama]

Quote from BJL:

The real question is ... can you make 11000% or turn 25k into 1 mln. Or are you better of on the road to mediocrity?

So, you agree that a Good trader would be better than the best designed automated systems anyday.