Mechanical Trading versus Discretionary Trading...Opinions?

we don't use black box systems. we use self developed systems that we adjust yourself. to be able to combine systems for example you have to exactly know what you combine and why... you have to have a reason why you combine those systems. In black box trading this has nothing to do with real trading... it's just another kind of gambling in my point of view.

alain
 
Actually, black box systems can be more accurate and less of a gamble than you think if automated and tested regularly. Some even are amazing.
 
Originally posted by hmap1
Actually, black box systems can be more accurate and less of a gamble than you think if automated and tested regularly. Some even are amazing.
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I agree.
 
what is an example for a black box trading system you are talking about? With what kind of background are you trading them?

What do you think is necessary to be able to trade those black box systems successfully?

I'm just curious?


Alain
 
Originally posted by alain
what is an example for a black box trading system you are talking about? With what kind of background are you trading them?

What do you think is necessary to be able to trade those black box systems successfully?

I'm just curious?


Alain
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If directed to me;

1) Arbitrage.

2) "With what kind of background are you trading them?", Do not understand the question.

3) Multiple noncorrelated systems, real time monitoring and size adjustment.


By "black box", I am talking about our black boxes that essentially trade a set of patterns that we identified and monitor the performance of; not a commercial solution, those never, ever work.
 
with background i mean do you know what you trade or are there some systemdevelopers always working on them? Or do you just trade like the indigo software works... choose a couple of systems and see what happens.

What we do: we have several trading systems, each one with very different results. Then we trade them in different markets that are independent of each other. in this way we create a diversification. Our main work is to observe the systems when they start creating similar results. Then we develop new systems or adjust the old ones so they go into another direction. To optimize diversification.

So what I don't understand with black box systems is how you know when a system will be good?

thx, alain
 
Originally posted by alain
with background i mean do you know what you trade or are there some systemdevelopers always working on them? Or do you just trade like the indigo software works... choose a couple of systems and see what happens.

What we do: we have several trading systems, each one with very different results. Then we trade them in different markets that are independent of each other. in this way we create a diversification. Our main work is to observe the systems when they start creating similar results. Then we develop new systems or adjust the old ones so they go into another direction. To optimize diversification.

So what I don't understand with black box systems is how you know when a system will be good?

thx, alain
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Our systems are developed and programmed in house. Systems are traded at a certain size until their performance degrades from an accepted norm; then the size is cut. We do 500 to 1500 RT a day; so it is a lot easier to detect a change in a systems performance than say a longer term position trader with only a handfull of signals a month.

You know it works when it makes money; then pick-up the size and number of trades.
 
so you have people in house that spend all their time developing these systems. how much time do they spend on a system and do they do wide back-testing?

what do you actually trade currencies?

we trade european futures and bunds

alain
 
Originally posted by alain
so you have people in house that spend all their time developing these systems. how much time do they spend on a system and do they do wide back-testing?

what do you actually trade currencies?

we trade european futures and bunds

alain
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Yes, full time. We spend more man hours on system development than man hours for traders. We tend to test with real money after a basic idea has been developed. With the type of trading we do real time execution is the unknown and can not be simulated or back tested.

We trade equity options, futures and equities.
 
Do you do most of your programming of automated systms in VB or C++? Most of our systems start out in VB and end up in C++ once all of the bugs and parameters are bugged out. One piece of a system in C++ can usually run 30,000 lines of code. This makes great for debugging....:)
 
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