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  #17 (permalink)

Reading UK
Trading Experience: None
Platform: Custom
Broker/Data: Interactive Brokers
Favorite Futures: My 3 boys
Grantx's Avatar
Posts: 1,631 since Oct 2016
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module0000 View Post
The problem with any "system"(charts, t&s, indicators, tea leaves) exists whether or not you look at it. The problems are inherent in the system itself; the probability of designing a perfect system is unimaginably low.

That's problem #1(your 'system').

Problem #2 is you - your brain is "interpreting" your system, and deciding when to follow it. The system already has it's flaws, but at least they are defined and unchanging(unless you are changing them constantly, in which case you have a problem #3 as well). Once you add yourself as the interpreter to your system, you have unlimited potential flaws in your system, and they change every day with your mindset and physiological state.

Now that you know you have (at least) 2 problems, why not eliminate the one you have control over? Automating your "system" means that problem #2 no longer exists for you. Now you only need to be concerned with the defined and static flaws of your system. The good news is there is a tolerable rate of flaws within a profitable system. Your goal is to reduce your flaws below that tolerable limit.

tldr; Time spent automating your system is the best time you will ever spend on your system. Now you can backtest and logically modify your system towards the goal of maximum profitability. You can also throw it all out and start from scratch when the numbers tell you it's not going to work out.

Lastly, if "automating" scares you off, because you associate it with teaching yourself to be a computer programmer...don't despair. Things like EasyLanguage and NinjaScript are orders of magnitude simpler and more approachable than what you would encounter in a general introduction to computer programming. Pick a platform with a decent language and support community, master that language, and proceed from there.

Time spent automating your system is the best time you will ever spend on your system.

This can be achieved by using your brain as well!

1. A trading system is a set of guidelines. As a discretionary trader if your system is any more complicated than basic guidelines then you are fighting yourself.
2. The brain should not spend time interpreting your system. If you have to spend even a few seconds ‘interpreting’ system rules then that is time wasted. That is why you ‘KISS’.
3. There is only ever one of two things happening, the opportunity either exists or it doesn’t:

a. The trade is on: your structure has become evident and an appropriate entry exists within the structure.
b. No trade: No structure is evident.

The most powerful multi threaded processing unit available to you is your brain. Your training should be spent figuring out how to bypass the firewall (emotions, beliefs, assumptions etc) so that you can get access to the core processing unit. Once your basic framework has been embedded in your subconscious (through repeated practice) then it becomes a lot easier for you as the heavy lifting gets handled automatically.

If you look at the hard right of you chart, you know that a pattern is about to unfold which has occurred countless times before. Which one? No one knows but what is 100% knowable is that a pattern is about to repeat. The sequence in which these patterns occur is random and in my opinion that is where the skill and art of trading lies.

Navigate the path as it unfolds before you.

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