Automated systems - Do they work?

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MitchT

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I occasionally stumble across material selling automated trading systems and I was wondering... Do these systems actually work? Am I right in thinking that they do all of the trading for you - you simply put your money in and out comes regular profit? If such a thing really did exist then surely everyone would be using it - independent traders, banks, institutions, etc? I've searched the forum for information but nothing really gives me the answers that I'm looking for.
 
I would of thought a search would of bought it up, but no, if people are trying to sell one to you then it's most likely a load of crap. Especially if it gives ridiculous figures.
 
Hotch said:
I would of thought a search would of bought it up, but no, if people are trying to sell one to you then it's most likely a load of crap. Especially if it gives ridiculous figures.
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A search brought up loads about automated systems, but it all seemed to deal with comlicated specifics rather than answer my basic question. All I want to know is... is there an automated system that's known to T2W's sensible, serious traders which they can testify works? As I said before, I'm not sure there is as everyone would be using it, but then I do hear mention of these things and it's made me curious.
 
MitchT said:
A search brought up loads about automated systems, but it all seemed to deal with comlicated specifics rather than answer my basic question. All I want to know is... is there an automated system that's known to T2W's sensible, serious traders which they can testify works? As I said before, I'm not sure there is as everyone would be using it, but then I do hear mention of these things and it's made me curious.
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If you set up a direct debit to my bank account, I'll give you nothing in exchange for some of your money every month. The bank will deal with this, so it'll pretty much be an "automated trading system", where you'll be able to exchange something for nothing.

This situation probably offers you about the same chance of profit as if you go out and buy an automated trading system. Also, I'd be making money out of it, which is definitely a plus from my point of view.
 
They work as a conformation in what u are seeing form u r own system...

Thats how i am using it.I use metastock to find a stock that is worth trading, then i scan it through an elliot wave automated program(get or winwaves) and i move from there...
Get always changes its waves if a new low takes plaece or something else...

so manual is the best way to go for me..
 
most automated will blow the account. No one strat can run 24 hours and deal with 2 types of market [range/trend] and three trade sessions [london NY Asian] ie 6 charcteristics.

if someone is selling a goldmine ask why.
Is it because for them that is a better strategy than trading in the market?

Traders are graded according on an R number. An R of 1 is every trade is a winner and you should automate yourself out of a job. the average is between 0.3 to 0.7. every trader should know the R number of their strat.
 
I think the responses here basically reflect my own feelings. It's good to get confirmation from others though!
 
oiltanker said:
most automated will blow the account. No one strat can run 24 hours and deal with 2 types of market [range/trend] and three trade sessions [london NY Asian] ie 6 charcteristics.

if someone is selling a goldmine ask why.
Is it because for them that is a better strategy than trading in the market?

Traders are graded according on an R number. An R of 1 is every trade is a winner and you should automate yourself out of a job. the average is between 0.3 to 0.7. every trader should know the R number of their strat.
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hi.. do u mind explain more about R number? whats that?
 
its called R2 and in short its the success rate. if you have a strat it will generate signals. take EVERY valid entry signal for say 20 or 30 or 40 trades [e.g a weeks or months worth] and what success rate do you come up with? A perfect score =1 [diagonal line]. Most are between 0.3 and 0.7.

it must relate to every valid entry because that is what a robot/algo would do. Most people don't do that so don't know their starting point R2 of the strat..

if you know the weekly or monthly or quaterly R2 for a strat and you did take every valid trade and you are no where near the expected R2 then one needs to review what is going on. Is it trader problem or a change in market conditions. By knowing R2 one can keep oneself and the strat under review.
 
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oiltanker said:
its called R2 and in short its the success rate. if you have a strat it will generate signals. take EVERY valid entry signal for say 20 or 30 or 40 trades [e.g a weeks or months worth] and what success rate do you come up with? A perfect score =1 [diagonal line]. Most are between 0.3 and 0.7.

it must relate to every valid entry because that is what a robot/algo would do.
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The difficulty can be in defining valid entries.
 
everyonerich said:
oh..! R = Resistance level.. geezz...
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not in this case.

Coefficient of determination - Wikipedia, the free encyclopedia

...R2 is a statistic that will give some information about the goodness of fit of a model. In regression, the R2 coefficient of determination is a statistical measure of how well the regression line approximates the real data points. An R2 of 1.0 indicates that the regression line perfectly fits the data....

Different forms of R and R2 [regression] is used a lot in trading. not just for measuring how good a strat and traders are but for lots of other reason. Some have it as an indicator on charts. It is used as a test for automated strategies. And is predictive. see

Forecasting Tomorrow's Trading Day by Tushar S. Chande Ph.D

if the model someone is trading does not fit the reality then it will have a low R2.

so getting back to the thread if you want to freak the black box guys out ask them what the R2 is for their system. All systems have an R2 and they should know it.
 
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jaet1989 said:
When it comes to trading, ignorance is key, ignore everybody, trade your way.
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Couldn't agree more. If there was a perfect system we would all be winners - but then there would me no market. If anyone expects easy £ from trading then they got a lot to learn. The guys selling these systems work on moving averages and the usual crap - they just want your money!!
 
Claudia123 said:
Couldn't agree more. If there was a perfect system we would all be winners - but then there would me no market. If anyone expects easy £ from trading then they got a lot to learn. The guys selling these systems work on moving averages and the usual crap - they just want your money!!
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you got it wrong..

more buyer, less seller = price up
more seller, less buyer = price down


if we are on the 'more' side, chances of market go our way is much greater. thats why the expert trader or whatever secret trading plan should be revealed...
 
eh?

if everyone is buying and no one is selling yes the price will go up. but once this has started how do you plan on buying when there is nothing to buy at that price? you will get filled when there is something to buy at a higher price. now if you were in before this happened you would benefit...but you wouldnt be if everyone used the same entry...
 
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