Mechanical Trading possible ?

[sirviente]

Hi,

I've been programming for about two months in VB6 trying to get a mechanical strategy up and running, but its hard just to break even. So, two questions, have you seen succesful mechanical trading ? Have you noticed that just buying and selling immediately 90% of the time results in a loss ?

Thanks,
Ulises

 

[mechanicaldaytrader]

...you buy after the bottom of the cycle has hit and sell when the top of the cycle has been reached....

...time..
....price...
.....cycles...

the E-mini market is designed to prevent 100% mechanical systems from consistently making profits in the short term.

 

[sirviente]

Hello mechanicaldaytrader,

Yes, i have noticed this very clearly in the eminis. When you speak about short term, are you talking about days, weeks, months ?

Its just pathetic that we are forced to be watching charts all day to make our money in the market... Specially because of high levels of stress.

What is the best 100% mechanical systems results you have seen in emini ?

Thanks,
Ulises

 

[ZEPPO]

Hello mechanicaldaytrader,

Yes, i have noticed this very clearly in the eminis. When you speak about short term, are you talking about days, weeks, months ?

Its just pathetic that we are forced to be watching charts all day to make our money in the market... Specially because of high levels of stress.

What is the best 100% mechanical systems results you have seen in emini ?

Thanks,
Ulises

Hi Sirviente,

Visit this website:
Discover trading systems automatically with APS Automatic Pattern Search trading software
Also type "Michael Harris" on the keywords window at the top, and read the threads on this forum.
You might you find what you are looking for.
Eduardo.

 

[mechanicaldaytrader]

Hello mechanicaldaytrader,

Yes, i have noticed this very clearly in the eminis. When you speak about short term, are you talking about days, weeks, months ?

Its just pathetic that we are forced to be watching charts all day to make our money in the market... Specially because of high levels of stress.

What is the best 100% mechanical systems results you have seen in emini ?

Thanks,
Ulises

Sorry to burst your bubble, but 100% mechanical systems don't exist for daytrading in the emini's imo. Most all my clients have thrown thousands of dollars away buying such poppycock and they choose to follow a methodology that is 70% mechanical. Check out
this thread for a current discussion about what I teach about daytrading. It's not something that you just jump into; only some people with the right attitude and aptitude can do it, imo.

Regards,

The Mechanical Day Trader / Stuart

 

[sirviente]

Hello mechanicaltrader,

Thank you for your comments, what do other traders have to say about 100% mech systems ?

Thanks
Ulises

 

[jimbotrader]

Hi Sirviente,

Visit this website:
Discover trading systems automatically with APS Automatic Pattern Search trading software
Also type "Michael Harris" on the keywords window at the top, and read the threads on this forum.
You might you find what you are looking for.
Eduardo.

Does the APS program actually do what they claim in that website? I have great reservations.

 

[ZEPPO]

Does the APS program actually do what they claim in that website? I have great reservations.

It does - visit this thread for more info:
http://www.trade2win.com/boards/software/14298-automatic-pattern-search.html

Eduardo

 

[sirviente]

Hi again,

Thank you for your comments, what do other traders have to say about 100% mech systems ?

Thanks
Ulises

 

[ZEPPO]

Hi again,

Thank you for your comments, what do other traders have to say about 100% mech systems ?

Thanks
Ulises

I think you are asking a question somewhat difficult to answer.
In my opinion it has all to do with volatility - because of this, at some time those systems will be profitable, and at others, the drawdowns will be deep.
Wether the trader can sustain them is another matter.
Perhaps the best answer would be a portfolio of systems where all, or most situations are covered, but when taken together you get a positive expectancy and ultimately a profitable trading plan.
This, of course, requires capital - perhaps lot of it!
Hope this helps.

Eduardo.

 

[sirviente]

So after a few days with this post, it seems the answer, is there is no 100% mechanical systems that traders have seen profitable ?

 

[ZEPPO]

So after a few days with this post, it seems the answer, is there is no 100% mechanical systems that traders have seen profitable ?

I wouldn't recommend on taking only one system if you go down this route; if you do then make sure that you know when it fails, and to recognise the signals when it will happen so as to stay out of the market.
This in itself requires a lot of study, backtesting, etc... and not many people are willing to make the effort, so on the long term they are more likely to lose money when the drawdown periods hit.

Eduardo.

 

[pedro01]

Hi,

I've been programming for about two months in VB6 trying to get a mechanical strategy up and running, but its hard just to break even. So, two questions, have you seen succesful mechanical trading ? Have you noticed that just buying and selling immediately 90% of the time results in a loss ?

Thanks,
Ulises

2 months is a very short period of time to draw any conclusions about the viability of such a project.

You need 2 things to get this done trading knowledge & coding knowledge.

One without the other won't work.

 

[Pat494]

Does the APS program actually do what they claim in that website? I have great reservations.

I binned it after a while - the drawdowns are too large

If as you mention you can program in VB6 then I suggest having a look at Biocomp.com.
They use swarm technology. Their bots can be improved on, even by a poor programmer such as myself.

 

[ZEPPO]

I binned it after a while - the drawdowns are too large

If as you mention you can program in VB6 then I suggest having a look at Biocomp.com.
They use swarm technology. Their bots can be improved on, even by a poor programmer such as myself.

I like that photo you've got there- gorgeous isn't she?

Eduardo.

 

[Pat494]

I like that photo you've got there- gorgeous isn't she?

Eduardo.

Sure is !!

 

[Citizen2007]

Interesting read.

Just one question. Why is it that people belive that 100% mechanical systems do not exist or can not be created? Surely this is dependant on your trading style and method ?

Is this reference to a trading record that does not win 100% of the time or are we talking about other factors?

I understand that markets change over time but that does not mean that a trend does not exist during these changing phases. There for if you are trading a trend based system, the trend can exist in any timeframe, then your system should still work.

Or are you trying to say that it is difficult to identify the trend and when it begins to change ?

I ask this because i am in the process of creating a mechanical system. To me this means having a rigid set of rules that are very clear and can be clarified in code. Also i should be able to trade this system manually with equal success.

If i can manually produce X% winners using my system manually, why should this be different when programmed mechanically?

 

[pedro01]

Interesting read.

Just one question. Why is it that people belive that 100% mechanical systems do not exist or can not be created? Surely this is dependant on your trading style and method ?

Is this reference to a trading record that does not win 100% of the time or are we talking about other factors?

I understand that markets change over time but that does not mean that a trend does not exist during these changing phases. There for if you are trading a trend based system, the trend can exist in any timeframe, then your system should still work.

Or are you trying to say that it is difficult to identify the trend and when it begins to change ?

I ask this because i am in the process of creating a mechanical system. To me this means having a rigid set of rules that are very clear and can be clarified in code. Also i should be able to trade this system manually with equal success.

If i can manually produce X% winners using my system manually, why should this be different when programmed mechanically?

Shouldn't make any difference - but surely there's some level of decision making you won't put into the system.

For instance - would you leave your system on & unattended for a few months ? Even through days where there are major announcements such as employment numbers ?

Also - I get the impression from the OP that he doesn't have a system he can trade manually and I think that starting off just with coding knowledge won't get you there.

IMO - either get the trading knowledge or partner with people that have it - then you stand a better chance.

 

[Citizen2007]

Thank you for your reply Pedro.

I see your point about some aspects of the decision making not being in the program. Also that you need to be able to trade the system manually with complete discipline in order to see how it works before going to the pains of programming something only to find it does not meet expectations.

Personally my system timings can be adjusted on a day to day or week to week basis. I am also sceptical about leaving my system running unattended for months, this is due not to the methodolgy but more to do with technical issues. The program stability etc and broker links with the system have to be tested to ensure their stability and to discover any further glitches that may be likely to arise. I am not a a programmer so these issues are a major concern at the moment. However the end goal is to develop a program that can be left to run un attended. Although this will not go on for months without regular checks to monitor performance, the system(or software) should however not be the reason for the failure.

Also news announcements etc. are not really an issue at this time, so far the system has kept me on the right side of the market during these announcements, but yes volatility can certainly be an issue. Therefore there are seperate rules for announcement days which the program can follow.

The target at the moment is to complete the system so it can trade the big moves throughout the day.There will initially be smaller moves which will rersult in small wins or small losses, but these filters will be programmed in at a later stage as my programming skills develop.

Programming is the big difficulty that I myself and a few of my fellow traders struglle with, after spending many years trying to understand the trading side of things this is now the new challenge to keep ahead of the game. Not entirely sure whether i want to go the lenghths and of learning a complete language again or find a programming partner . My current program is failrly flexible in that it allows me to use any chart format, with multiple timeframe collaborations and automatic order entry. But the major concern here is stability, which is what we are in the process of testing right now.

 

[sirviente]

Dear Citizen2007 and Pedro,

Yes, i am on the other side, i am good with programming, but lack the years of trading expertise. So i was inclined to only work in programming, as i have seen emotions are overwhelming while trading, and hopefully find an automated solution.

I have been programming for 6 months more or less, and although i have a lot of code developed, the end result, is usually break even or very small gains at the end of the day. I think that teamwork is the best, but I haven't seen such a thing, it seems to me that traders, usually tend to be loners because of so much "emotions" in regards to money.

Some very basic test, which i was amazed with, is that if i program system that would buy and sell immediately , it looses 80% of the time. Pathetic.

Regards,
Sirviente