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Trading Reviews and Vendors

Discuss and review vendors of commercial trading products, trading rooms and services, trading indicators or third-party paid add-ons



  #9 (permalink)

Durham, NC
Trading Experience: Advanced
Platform: HyperScalper Dukascopy LMAX
Broker/Data: Dukascopy LMAX
Favorite Futures: Forex
Posts: 5 since Jul 2010
Thanks: 0 given, 14 received

Vendor alert. Well, I have a couple of comments. Just a little pushback, and some reasons why "trials" or "demos" may have limited value.

First of all, my view is that discretionary trading is a complex activity, which requires complexity Analytic capabilities. Most traders agree with that.

If it were possible to "automate" trading, using "artificial intelligence" and achieve results better than an experienced human trader, then that might be a useful thing to try.

However, real markets, and real trading are such dynamic entities and activities that there is no substitute for experience, as they say.

Let's say you want to become a Jet Fighter pilot, but need a "trial" in order to decide whether you can survive a fire fight.

That, of course, is absurd. Months and years of experience are necessary. This, of course, is why humans remain in cockpits, because only experience can yield optimum results in combat. Drones are piloted by humans as well...

Some trading platforms have "automated signals" but my view is that this is unlikely to be successful in a real dynamic market. False positives, false negatives, etc. are the sorts of factors which fixed trigger strategies can create. Here we're taking the "analog" world of the market, and imposing a "digital" decision structure through some decision to react when some analog situation crossed over a "threshold" of some kind. BUY @x now with Target @y and Stop @z Even that's way too simple in my view.

I do believe that "semi-automatic" computer-assisted aids are essential, but always in the context of a Trader who makes the fundamental decision on a discretionary basis.

Short term scalping, or what I would call micro-scalping, is a dynamic environment which requires both human discretionary action, as well as computer-assisted short term analysis and trigger capabilities. Things just happen too fast for some reaction times, and the trader's experience level is critical in determining whether or not she should even get involved in the prevailing action. Sometimes, it's best to walk away from a fight or, in this case, not to get involved in the trade action, which you can recognize through long hours of experience.

Given this, with software that provides dozens of complex charting views of realtime indicators, a "demo" or "trial" is just a waste of time.

Any software or approach which requires a significant training "learning curve" is just not appropriately offered in a "trial" mode. Experience shows that most clients accept this, and also the responsibility to work hard over literally months in order to begin to master various capabilities.

In my case, the message is very clear. Most traders will fail. The reasons for failure include, but are not limited to, insufficient effort at understanding capabilities, insufficient account financial strength, choice of inappropriate markets, and a whole host of other factors.

We are almost always trying to base trade decisions on objective technical indicators, but translation of a cluster of indicators into a Trade Decision is far too complex to automate.

And this doesn't take into account the widely varying markets available in Futures contracts, ranging from T-bonds through to FX futures. No single rigid approach is ever going to handle that dynamic range.

Every poor trader I've met is looking for the "holy grail". And many want "the system" to do the work for them. I doubt I'll get much argument that successful Traders will probably shake their heads at that, and realize how much accumulated experience was required to get them into "survivability mode" in the markets.

Just some thoughts on the reasons for requiring an up-front commitment, an extended period of cumulative training and consultancy; and on the general nature of short term trading which is extremely dynamic with what I can only best describe as an "opportunistic" character to it.


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