Why Traders Fail

[jl1575]

What about an almost perfect automation system? What human psychology is needed for managing the entry and exit ?

 

[wrbtrader]

What about an almost perfect automation system? What psychology is needed for managing the entry and exit ?

If you're 100% automated (entry, exit and everything in between)...psychology is mute.

Thus, anything a trader has to do manually in a trade...psychology becomes important.

 

[algofy]

What about an almost perfect automation system? What human psychology is needed for managing the entry and exit ?

Just the entry and exit rules are shaped by human decisions.

 

[volpri]

In the design human psychology will come into play. In the execution if fully auto then no emotions or cognitive functions come into play. However, for that reason many algos only work for a time and stop working. The computer simply doesn't have the ability of the human mind to adapt. It can only do what it was programmed to do.

 

[jl1575]

Just the entry and exit rules are shaped by human decisions.

You are confused with two processes: The programming stage and the trading stage. The programming and coding process is all based on math, science and algos; The trading process handled by human operation is affected by psychology; but the trading process handled by machine is not affected by psychology, it is all determined by the rules and algos that are built in the systems, unless a operator sitting in front of the computer makes interference, then in this case it is not full automation.

 

[themickey]

Learning to code an auto system is a good education.
Teaches one to become more objective in trading, that was my experience.
I trade discretionally now, but much more sytematic and I use less emotions.

 

[algofy]

You are confused with two processes: The programming stage and the trading stage. The programming and coding process is all based on math, science and algos; The trading process handled by human operation is affected by psychology; but the trading process handled by machine is not affected by psychology, it is all determined by the rules and algos that are built in the systems, unless a operator sitting in front of the computer makes interference, then in this case it is not full automation.

I think we're on the same page. Human decision making goes into the programming. That's what I was trying to say.

 

[jk90029]

Find example person who never failed.

Maybe those who never buy asset with loan, like Buffet and Gates