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Must you know how to program?
- Thread starter Brianharvey
- Start date
fully agree. You walk to my desk and tell me "hey buddy, I got a new trading idea can I do it?" I will in return say "sure, why do you think it works and back up your argument with statistical evidence".
Nobody should trade his/her funds nor get funded to trade without first thoroughly testing an idea. Enough other things can go wrong.
Nobody should trade his/her funds nor get funded to trade without first thoroughly testing an idea. Enough other things can go wrong.
Quote from The Big D:
His position, while somewhat popular on ET, is not popular in the industry and I would go so far as to say it's just wrong.
Back testing is an essential first step for any trading system. It's not the only barrier to profitability, but ask yourself this: if you backtested a system and could find no evidence it gave decent returns, would you trade it with real money?
In other words, a good backtest doesn't imply a system is actually going to be profitable, but bad backtests tent to imply it won't be.
I think a lot of the comments are correct even though they sound contradictory. Backtesting is just that - testing using back-data. It won't guarantee a future outcome. On the other hand, programming can enforce a mental discipline, because if you can't codify it (or pseudo-code it), you probably haven't thought it through very well.
Also, it is true that the market reacts to emotion. But if you have a position(s) on, that means that You are part of the market. We tend to see the things we want to see, and a programmed marker can help show you if what you think is a great idea is just an illusion over a certain period - kind of like an impartial assistant (assuming you coded it right).
But programming isn't giving you any ideas - and without an idea, there's nothing to program.
Also, unless you already code in the language you plan to use, that is (as a previous post said) a significant commitment of your time to learn. Unless you plan to pay someone a lot to code iterations as you thrash through your idea(s), you either hunker down and learn it, or you don't.
Also, it is true that the market reacts to emotion. But if you have a position(s) on, that means that You are part of the market. We tend to see the things we want to see, and a programmed marker can help show you if what you think is a great idea is just an illusion over a certain period - kind of like an impartial assistant (assuming you coded it right).
But programming isn't giving you any ideas - and without an idea, there's nothing to program.
Also, unless you already code in the language you plan to use, that is (as a previous post said) a significant commitment of your time to learn. Unless you plan to pay someone a lot to code iterations as you thrash through your idea(s), you either hunker down and learn it, or you don't.
so, why wont you tell me, what is the probability (expected value) of a back tested strategy, which made a positive $ amount almost every day with the occasional small but well controlled loss, that this strategy will perform better than an idea that performed more like randomly in the past? Trading is nothing else, betting on positive expected outcomes while controlling negative realizing outcomes...
Sure if you are a broker or money maker you dont need to back test, you live off the spread, clearly defined, a sure way to make money. Otherwise, every Goldman, Deutsche, or other quant or low latency desk performs backtest on an almost daily basis...
Sure if you are a broker or money maker you dont need to back test, you live off the spread, clearly defined, a sure way to make money. Otherwise, every Goldman, Deutsche, or other quant or low latency desk performs backtest on an almost daily basis...
Quote from WaveStrider:
I think a lot of the comments are correct even though they sound contradictory. Backtesting is just that - testing using back-data. It won't guarantee a future outcome. On the other hand, programming can enforce a mental discipline, because if you can't codify it (or pseudo-code it), you probably haven't thought it through very well.
Also, it is true that the market reacts to emotion. But if you have a position(s) on, that means that You are part of the market. We tend to see the things we want to see, and a programmed marker can help show you if what you think is a great idea is just an illusion over a certain period - kind of like an impartial assistant (assuming you coded it right).
But programming isn't giving you any ideas - and without an idea, there's nothing to program.
Also, unless you already code in the language you plan to use, that is (as a previous post said) a significant commitment of your time to learn. Unless you plan to pay someone a lot to code iterations as you thrash through your idea(s), you either hunker down and learn it, or you don't.
That's a big +1Quote from The Big D:
Back testing is an essential first step for any trading system. It's not the only barrier to profitability, but ask yourself this: if you backtested a system and could find no evidence it gave decent returns, would you trade it with real money?
In other words, a good backtest doesn't imply a system is actually going to be profitable, but bad backtests tent to imply it won't be.
To me backtesting IDEAS is very important. What I want to see is that the entry idea I have will take me to, at least, my first scale out point after which the art takes over in managing the trade. In real time, my entry will be influenced by the nuances and context.
My daughter is currently programming our methodology with the idea of using her FloBot to auto enter trades, then look at the entry manually and decide whether to stick with the trade and manage it or reject the trade due to context and exit it. We talk a bit about it in my blog electroniclocal.blogspot.com, nothing for sale there.
My daughter is currently programming our methodology with the idea of using her FloBot to auto enter trades, then look at the entry manually and decide whether to stick with the trade and manage it or reject the trade due to context and exit it. We talk a bit about it in my blog electroniclocal.blogspot.com, nothing for sale there.
so in order to be able to backtest your ideas, are you all trained in programming, or do you pay someone to write a 'strategy' for you, based on your concept/ideas, so that you can backtest it yourself on your platform..?
Easylanguage can be easy for the simpler ideas.