New book on how traders are beating the HFT guys

[Alpha Trader]

Making a living or making a life from trading comes down to backtesting.

Backtesting has a significant place as part of a retail traders arsenal. However, as the adage goes: Past performance is not indicative of future results.

It is very important to retain your sharpness with this ever changing market. This sharpness (or edge as some choose to call it) can only be retained and evolved with forward testing. This in turn allows you to tweak/alter your algo for backtesting. Without this, you are backtesting nothing.

 

[Grandluxe]

Most people who I know that backtest are not profitable traders. They spend their lives backtesting.

Those that are profitable and actually trade, usually test it out with small size and work from there. No backtesting required or needed. The market is the test.

 

[Alpha Trader]

Yeah, sure, we are going to beat super fast computers connected directly to their liquidity providers via T3 network access lines with our oh-so-fast Pentium 4 computer located in some basement in Kansas City, from our E-trade account and with our DSL connection

 

[Alpha Trader]

Is that so?


http://media.futuresmag.com/futuresmag/historical/Issues/2006/7/Documents/Top-10-Trading-Systems.pdf

Note from the article : "... a trader who takes the time to correctly develop a trading plan with a solid money management overlay, has a much greater chance of success. Starting with a trading system that has done well throughout time is step one"

Thanks for the link xelite777. It seems like good reading.

 

[Alpha Trader]

In 2010 I could have made more working at McDonalds. Otherwise, every year has paid the bills plus some.

Dustin, it seems you have been around a while and been pretty consistent all along. What did you think changed in 2010 to break the streak?

 

[Dustin]

Dustin, it seems you have been around a while and been pretty consistent all along. What did you think changed in 2010 to break the streak?

I can't say for sure, but I think that was the peak of hft which really dulled down moves. It seemed like nothing would ever follow through...the only moves were gaps. Intraday moves are coming back for now.

Or, maybe I just sucked as a trader that year.

 

[xelite777]

Thanks for the link xelite777. It seems like good reading.

You are welcome Alpha Trader.

 

[Crude Man]

This is honestly the dumbest debate ever. For system traders you need to backtest. To run a system without backtesting is foolish. For discretionary traders backtesting isn't necessarily needed and in many cases impossible.

Can we end this debate and not hijack this thread anymore.

Amen! Thank you. Let's go back to discussing the book. I read it as well, very good interviews.

 

[xelite777]

Let's go back to discussing the book. I read it as well, very good interviews.

Interviews are fine but I am still looking for an HFT book that says something like this :
- "See this profitable trading system here? Well it's no longer profitable due to HFT activity and here is the proof".

I mean could anybody name just one?

One thing is for sure though, unsuccessful traders can know blame HFT for their own failure.

Anyway, here are 2 other books on the same subject:

The speed traders : an insider's look at the new high-frequency phenomenon that is transforming the investing world, by Edgar Perez.

Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market, by Scott Patterson

 

[drownpruf]

Interviews are fine but I am still looking for an HFT book that says something like this :
- "See this profitable trading system here? Well it's no longer profitable due to HFT activity and here is the proof".