Well that was a lack of communication, or lack of understanding on my part, I do not believe that anybody can predict price, I am mitigating the fact that we as traders can predict high probabilties in the direction of price action to maintain the right side of the market.... Earlier you mentiioned that you have to be able to predict, guess, etc. to know, I thought that you were being sarcastic.. I was out at 15:15pm so I missed the opportunity too participate. AS we all know Typed words lack much merit, so miscommunications are a part of messaging..
Reasons for failur in automatic trading systems
- Thread starter cohvi
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Well that was a lack of communication, or lack of understanding on my part, I do not believe that anybody can predict price, I am mitigating the fact that we as traders can predict high probabilties in the direction of price action to maintain the right side of the market.... Earlier you mentiioned that you have to be able to predict, guess, etc. to know, I thought that you were being sarcastic.. I was out at 15:15pm so I missed the opportunity too participate. AS we all know Typed words lack much merit, so miscommunications are a part of messaging..
Well, let's say I randomly enter a trade...
Profit = Predicted the market.
Loss = Not in the zone.
That's a bit harsh so... I enter a trade with a system...
Profit = The system predicted the market.
Loss = Part of the statistics.
... Well... I enter a trade via discretion...
Profit = I can predict the market.
Loss = I predicted that too.
Profit = Predicted the market.
Loss = Not in the zone.
That's a bit harsh so... I enter a trade with a system...
Profit = The system predicted the market.
Loss = Part of the statistics.
... Well... I enter a trade via discretion...
Profit = I can predict the market.
Loss = I predicted that too.
I was kind of suprised reading this post of the views some (most) have on here.
I've worked at a managed futures investment firm, wealth management firm and now run a hedge fund, all of which used automated trading systems.
Granted you can't turn continual profit, but with proper design, backtesting, walk-forwarding and thinking, you can reap very good profits. And when the drawdowns and directinoless periods come, oh well, c'et la vie.......and if the directinless phases last longer then normal, then it's time to find something new to trade.
E.g., at the futures investment firm we traded crude oil 1 and 2 month out contracts using simple channel breakouts. Nothing fancy, just a simple buy highest(high, buylength) + 1 point stop, sell lowest(low, selllength) - 1 point stop, properly thoughout and tested parameters.
But seriously, after reading this thread I"d think that some of you guys just did fundamental/discretionary analysis.......Ooooooooooooo, slave labor is up in South Africa and it looks like people are buying lots of pants and shirts today so I'm going to buy Wal-mart stock!!!! ^_^
I've worked at a managed futures investment firm, wealth management firm and now run a hedge fund, all of which used automated trading systems.
Granted you can't turn continual profit, but with proper design, backtesting, walk-forwarding and thinking, you can reap very good profits. And when the drawdowns and directinoless periods come, oh well, c'et la vie.......and if the directinless phases last longer then normal, then it's time to find something new to trade.
E.g., at the futures investment firm we traded crude oil 1 and 2 month out contracts using simple channel breakouts. Nothing fancy, just a simple buy highest(high, buylength) + 1 point stop, sell lowest(low, selllength) - 1 point stop, properly thoughout and tested parameters.
But seriously, after reading this thread I"d think that some of you guys just did fundamental/discretionary analysis.......Ooooooooooooo, slave labor is up in South Africa and it looks like people are buying lots of pants and shirts today so I'm going to buy Wal-mart stock!!!! ^_^
Btw, one thing I forgot to add is that the key is definately to think outside the box - obviously I'm not goign to tell you what I'm doing ( ^_^ ) but I found a lot of success with technical trading once I identified niche markets that met various factors of mine like liquidity and were properly designed using some fairly standard ideas but using them outside the box (such that if you saw what I was doing you'd be like 'WTF? That isn't complicated or anything???')
It's because people in general, I must admit, do not have little intelligence to play in the market.
Most traders are losing (it is supposed to be about 90%). However there are (nearly) sure-fire PLUS simple method which can make you profit effortlessly and comfortably. A ten-year-old boy can execute this plan. Nevertheless people have been losing all the time.
The same holds true for automated systems. Coded in some simple rules, having some sense of money management and so on, you should be able to profit from it. Eg: You can always use moving averages to catch the mid-to-long-term trend. It's difficult for you to lose. However automated traders still fail.
What's up? An unsolvable myth!
So sorry, I won't go into details or I will hijack this thread, but I could try my best to point you to the right subjects, so you could see the point.
One method: Think about long-term investments, be it stock, index, commodities etc. Spot the big trend and ride on it. Wait for ripeness. That's it! Money, money, money...
Similar points/logic apply to automated trading systems, and I have mentioned one example briefly which you should get it if you have some basic trading understanding.
However I have to say I haven't involved in automated trading personally.
Quote from OddTrader:
Perhaps he actually meant that logically any trader having develped a never-failing system, if it exists, would not bother selling it.
Usually true but not always.
Some genuine people are REALLY selling workable trading systems. However there're much more rippers/tricksters which defame this business badly.
Reading reviews, subscribe magazines which talk about automated systems should help you spot the genuine ones.
What's more, you could always develop one yourself.