Charles Bronson
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You may have misunderstood what automatic trading means. It does not matter if you trade manually or automatic, you still need a good system that works consistently.
Automatic trading, as I believe you are seeing it, is using a profitable system that you have used manually, and programming it to execute the orders automatically following your criteria.
What is your perception of "automatic trading"?
You think there is just a trading bot that everyone could run and it'd earn everyone millions simultaneously?
Your questions is same with "If manually trading really works...". A method could improve somethings or remove some struggle in traditional trading but it could not make millions, if it really can do it, I don't think it would be public. No money is easy, rite?
Pat494
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I feel that it is only a matter of time before someone produces a profitable robot. Probably some of the big money banks/hedge funds etc. have their own in-house ones already. It may take some years before it filters out for the general public though.
And when it does, trading will be changed for ever or finished as markets are read correctly. The brokers won't accept 100% winning trades either.
And when it does, trading will be changed for ever or finished as markets are read correctly. The brokers won't accept 100% winning trades either.
Whenever a trading strategy becomes too popular, its profitability declines. (An example is the rise and decline of pair trading.) The same is true for any quant or algorithmic strategy. A number of hedge funds use quant trading, but the best ones are continually inventing new algorithms to try to beat the market. It's an ongoing battle to outsmart the other quants. I use an algorithmic trading strategy (mean-reversion of a cointegrated portfolio) that I programmed myself, but every day I run a statistical test to check whether the cointegration is still present. At some point, I expect it to stop working, and so I'll have to move on to some other strategy.
The reasons for this are many;
1) Traditionally strategies for automated trading need to be programmed, few are programmers, and have the time - it takes a professional team 3 months to develop a small set of strategies, having a trading idea from a professional trader !
2) The development platforms and that you have to program sets a limit to which kind of complexity, sophistication, and the count of different strategies you can develop.
3) There is in general no difference between a trading idea for discretionary and for automated trading - a computer is not a magic stick, the automated strategy still need to be based on a trading idea.
4) In general 99% of all strategies works till they do not work any more, works in the market behaviour it was tested to work in - in general till the market behaviour change against the strategy.
5) The market behaviour now change faster than strategies can be developed, mainly due to the increasing use of automated trading.
The above shows why we are not all millionaires, and also why the use of automated trading signals has been replaced by social trading in the retail segment, its too difficult to develop strategies (by programming) and there is a lack of strategies in the market.
However, automated trading and computer assisted trading is the future, proper development tools are not in the retail market yet, but they will for sure be.
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Pat494
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Does it make profits ?
0007
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To calculate what?