Reasons for failur in automatic trading systems

Sorry if I confused you a bit, but I can just go by my direct experience with my traders....only one has made any consistent money, and that's my brother...and he's hedging a pretty large stock portfolio.

When the guys on the floor, and those affiliated with firms on the CME floor, are paying 10% or so of what you have to pay in commissions ...it make it tough to compete.

Historically, we hedged Spoos vs. OEX options and stock baskets, and we found an "edge" without having to be on the "right" side of a trade.

I respect anyone who can overcome such obstacles and make a few hundred grand a year, so my hat's off to you.

I like to keep things simple, use the futures as leading indicators, trade my baske of stocks and my pairs (after the opening only orders)...as long as all this works well, I'll likely not trade to many emini's.

The bottom line is all that counts...and I've never made bones about "it" being anything else.

All the best,

Don
 
Quote from Don Bright:

Yes, it would seem that "being on the right side of the market" is the ultimate goal....let me know when someone has figured that out....LOL. Perhaps pairs traders with long/short positions.

Don
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Left side of the chart is the recent price action and the right side is the future price action. So for you to be on the right side of the market you must be familiar with the right side of the chart. You must know how to predict,forecast,guess or have an inside info. That simple.
 
Quote from Walther:

Left side of the chart is the recent price action and the right side is the future price action. So for you to be on the right side of the market you must be familiar with the right side of the chart. You must know how to predict,forecast,guess or have an inside info. That simple.
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As I said "predict" "forecast" "guess" - LOL, my crystal ball has never worked well....

Good comment, LOL....


Don
 
Quote from Walther:

Left side of the chart is the recent price action and the right side is the future price action. So for you to be on the right side of the market you must be familiar with the right side of the chart. You must know how to predict,forecast,guess or have an inside info. That simple.
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You guys are a riot,

In such a subjective environment like trading, you have to make an assumption whenever you enter a trade, you are either right or wrong, if you are right about your decision you make money, in order for that to happen, whatever system you are using is taking information from the left side (past) of the chart to negotiate whats on the right (future) side, that is a statistical prediction (probabilty), are you telling me you guys have inside info? if you are not trying to predict a high probabilty of whats going to happen next based on past information,

1. You either know whats going to happen next, (which I doubt) or
2. You are not trading..

this conversation is a catch 22, none of us know the future but yet we manage to produce a profit based on which direction the market will go in the future when we do not know the answer, so how do we make money?

Now Don gave me an explantion the other day of how he makes money without being on the right side of the market, he brought to light that being on the right side of the market does not necessarily mean the market went in your direction, it just means the strategy you used produced a profit, but on the other hand, what if he loses to the market, is he "Not" on the wrong side?

I guess my point is that you cannot trade without taking a side of the market, it's either the right side, or the wrong side and we do not know the answer until we take a side, you cannot even facilitate a trade without two people taking a side of the market, it's impossible to trade nuetral because the market is nuetral at any given point and we as traders pivot on either side. I don't know about you but I make money trying to figure out future price action... I am not saying I know it all, but if you guys are not trying to make money off of future price action, but some other price action, I am all ears because this future price action crap is hard to figure out...

(so, who's on first)
:confused:
 
Hedging strategies generally have about a 70+% success rate, as does the opening only strategy, and for the most part, good tape reading, and of course correlated pairs trading.

Of course we are going to be "wrong" - but I look at it this way.. In blackjace, with a plus 5 count and no aces out, I will bet a high wager...even though there is a 50/50 chance that the dealer will get blackjack, not me....if I lose, I will do it again under the same circumstances....however, blackjack is finite, trading is not... so we must simply accept loses, cover them, and go on....

Don
 
Quote from Don Bright:

Hedging strategies generally have about a 70+% success rate, as does the opening only strategy, and for the most part, good tape reading, and of course correlated pairs trading.

Don
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Now I have thought about messing around with hedging, I was trading euro futures but have moved over too forex becuase I can apply my strategy to multilpe products and start implementing hedging strategies, but I certainly did not realize that it has about 70% success rate, I am definitly going to start looking closer into that, I actually had my programmer build hedging switches into my program but I have not integrated them into any strategies yet.

I don't know anything about tape reading, I have seen scalpers do it in firms that I have traded at.
 
That question you quoted of mine was meant to be a rhetorical statement, I was not implying that I could predict the future.. If I could predict the future I would play the lottery...
 
I talked to a guy once on a bench in front of the CME who told me he traded by using planets and Lunar cycles, very successful, he looked as crazy as his ideas, I always figured he was independently wealthy and claimed he made money off the market becuase I did not believe him, anyways I was thinking about what he said for a long time and came to the conclusion that time it's self is based on lunar cycles, so if you look at a 30 minute chart, you are looking at a lunar cycle, not that I would put any money on his method, but we all seem to have a method or system and for what ever reason, our methods can work for you but not someone else. I believe I have figured a way to get on the right side of the market at a particular junction in time, even though the right side doesn't ever exist, you believe otherwise, I choose to stay in my happy happy joy joy world...
 
Quote from Cheesy:

That question you quoted of mine was meant to be a rhetorical statement, I was not implying that I could predict the future.. If I could predict the future I would play the lottery...
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I thought that that you are doubting my ability to predict price action. So I gave you a time in advance where you could enter in either direction and make money. I had buying in my mind but even if you sold at the high of 15:15 bar you would still made money.
So once again, it is possible to predict price action in any liquid market in any time frame.
 
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