Learning profitable automated trading

[oildaytrader]

lets say your systems did work, and made lots of money. where is the sense of achievement? gona just sit about counting your money? may be fun for a while but you would probably end up killing yourself.

atleast discretionary trading gives you a purpose, a career, constantly learning, increasing your knowledge base and understanding. and most importantly of all, keeps your mind occupied. sitting watching a robot does f all for your life.

since you haven't actually made any money, you wont understand the harsh reality of having lots of money and nothing to do! called boredom, which leads to depression, which leads to suicide. enjoy.

There are better things to achieve when the cash comes in, like helping undeprivilledged.

Discretionary trading is like a cuckoo's nest .Enjoy it.

There is always t2w for mentor bashing to relieve your depression.

 

[meanreversion]

Whacky spelling of privileged, like your style ..

 

[oildaytrader]

You need to constantly monitor every aspect of the mechanical system, which is where the interest lies. But as with discretionary trading, there will always be quiet times, hence the existence of t2w.

I don't have to monitor my automated trades, just glance for 5 minutes once every two days at the screen .You get a life with automated trading , only price to pay is the drawdowns and software costs.I have no stress and am free all day.

With semi mechanical strategy most things like alerts,signals,exits etc and set ups can be semi automated.There can be a load of free time with semi automated mechanical trading.

 

[meanreversion]

True, but my medium term project is to try to evaluate if there is value in optimizing my parameters in the future. I use Amibroker, which has an excellent walk forward application.. I have about 5 or 6 parameters.... does it make sense to re-optimize once a year? It's going to take a bit of testing to work it out.

 

[N Rothschild]

simple fact is, if you were capable of discretionary trading you would do it. you turn to automated systems in the hope they will make you rich because you cant do it yourself. well guess what, its not going to make you rich!

 

[oildaytrader]

True, but my medium term project is to try to evaluate if there is value in optimizing my parameters in the future. I use Amibroker, which has an excellent walk forward application.. I have about 5 or 6 parameters.... does it make sense to re-optimize once a year? It's going to take a bit of testing to work it out.

I do not believe in optimisation or optimising every so often. A strategy must stand the test of time without any changes, unless improvements are added.If parameters are optimised to suit today's market conditions, market conditions tomorrow could revert to previous conditions etc etc etc , so you are always chasing your tail optimising and constantly re optimising.

 

[meanreversion]

Well, my approach is this .. the market takes no prisoners so you need to be very honest about your capabilities. If you're good at discretionary, good luck to you. I know I suck at it.. moreover, having spent over ten years trading at some fairly large banks, I know that the vast majority of traders suck at it. If there are 100 traders at a sell side institution, I doubt if more than 5 are good discretionary traders.. nearly all of them make money from client flow. So, each to their own devices. If I was a multi-billionaire from trading, I would feel in a position to advise others. But I'm not, so I'll only say what works for me. Each person needs to find their own method.

 

[meanreversion]

I do not believe in optimisation or optimising every so often. A strategy must stand the test of time without any changes, unless improvements are added.If parameters are optimised to suit today's market conditions, market conditions tomorrow could revert to previous conditions etc etc etc , so you are always chasing your tail optimising and constantly re optimising.

Have you backtested to see whether re-optimization actually works? Simpy saying 'it's like chasing your tail' has no basis in empirical evidence ... you should know better than that.

 

[oildaytrader]

simple fact is, if you were capable of discretionary trading you would do it. you turn to automated systems in the hope they will make you rich because you cant do it yourself. well guess what, its not going to make you rich!

You should only be trading three to four trades a year, the automated systems do pick those trades

Sitting infront of a computer sweating ,tense,missing trades , frustrated and bonkers with same old underwear 250 days a year..

 

[oildaytrader]

Have you backtested to see whether re-optimization actually works? Simpy saying 'it's like chasing your tail' has no basis in empirical evidence ... you should know better than that.

I used to optimise strategies , but gave up in favour of robust systems.I found the strategies needing optimisation failed sooner or later.

If you look at market conditions over a period of time, and I am talking about currencies,there is no fixed time or pattern as to how long current market conditions will remain in place, or when they will change, and to what market conditions.

Optimisation can work but you gotta know what exactly to optimise.This is why one needs to have expert knowledge in the instruments traded.Re optimisation will work if expert knowledge is applied.

O D T

 

[oildaytrader]

simple fact is, if you were capable of discretionary trading you would do it. you turn to automated systems in the hope they will make you rich because you cant do it yourself. well guess what, its not going to make you rich!

Misconception:If rule based automated systems can produce a profitable strategy, a manual discretionary should be able to do exactly the same as a computer.

Manual traders suffer from all the disadvantages and weaknesses.

 

[N Rothschild]

its not a misconception, your thread demonstrates perfectly how crap these systems are

 

[oildaytrader]

its not a misconception, your thread demonstrates perfectly how crap these systems are

How come 95% of traders lose money when such profitable and robust methods are considered crap?Are they using crappier methods?

 

[meanreversion]

I used to optimise strategies , but gave up in favour of robust systems.I found the strategies needing optimisation failed sooner or later.

If you look at market conditions over a period of time, and I am talking about currencies,there is no fixed time or pattern as to how long current market conditions will remain in place, or when they will change, and to what market conditions.

Optimisation can work but you gotta know what exactly to optimise.This is why one needs to have expert knowledge in the instruments traded.Re optimisation will work if expert knowledge is applied.

O D T

Ok look.. I think we are on the same page as far as using mechanical systems is concerned, however some of your responses are a bit flaky and indicate lack of clarity in your thinking.

Of course a system needs to be robust, it goes without saying.

You don't use optimization? Wrong. Any system you use will have at LEAST 4 parameters, and how did you select them.... you just guessed? And having guessed these numbers, you didn't then think to see how your system might have worked if you altered them slightly? You're being economical with the truth OR your thinking is woolly.

Bill Dunn at Dunn Capital re-optimizes every now and then, and he has considerably more money than you.

You're on the right track but your pseudo-scientific responses betray a lack of thorough understanding at times.

 

[N Rothschild]

How come 95% of traders lose money when such profitable and robust methods are considered crap?Are they using crappier methods?

i would bet that the ratio of failed discretionary traders is lower than failed automated heaps

 

[oildaytrader]

i would bet that the ratio of failed discretionary traders is lower than failed automated heaps

The number of failed discretionary traders is probably in millions >xm +, number of failed automated heap < 100k

 

[oildaytrader]

i would bet that the ratio of failed discretionary traders is lower than failed automated heaps

The world's most consistently profitable and successful trader uses computer models

http://www.trade2win.com/boards/general-trading-chat/79152-greatest-trader.html

Says a lot about the discretionary losers.

 

[N Rothschild]

now you are really displaying your ignorance.

you think the "computer models" are in anyway related to the complete crap you make? lol.

 

[oildaytrader]

now you are really displaying your ignorance.

you think the "computer models" are in anyway related to the complete crap you make? lol.

Mine is more profitable

 

[oildaytrader]

u can actually see some of his research papers on an old version of his website...yeh i can't see him hammering away on mt4 at $1 a point

pennies make pounds .I always like to start small and increase stakes , don't worry stakes will go up to $100 pp eventually.

Stochastic entries may be random , but only if you knew what other intellectual knowledge was coded to make it non random.

The metatrader is better than platforms used hedgies.