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Auto trading is only thing that conquered my darkside
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Auto trading is only thing that conquered my darkside

  #131 (permalink)
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Massive l View Post
I have a handful of trader friends that are all successful
using their discretionary method with a set of rules that they
have changed and developed over the years.
Three in particular have been at it for over 20 years.
I meet in person with two of the three every week on Friday.

Hi Massive, can you tell me what are discussed in those Friday meetings?

"Faith is the substance of things hoped for, the evidence of things not seen." --- "Therefore, I Believe it and I will see it. And every day and in every way, I am healthier, wealthier, and wiser."
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  #132 (permalink)
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monpere View Post
"During the raging bull market in the dot com era, many traders were making money hand over fist. Once the tech bubble burst, they lost everything, and could not make a dime to save their life. In that era you could throw a dart at a chart and make money going long. They mistook the nature of a raging bull market, and thought it was their natural trading ability and skill." .

Thanks, this example is nice for me.... Where's the difference between auto/mech and discretionary here? an automated system carefully created to fit the market that made lot of money on 1999 and 2000 should fail the same way that discretionary traders did on 2001 bubble burst or even lose more money.

The worst thing about this is that I bet that lot of people that think that auto trading is better are in fact backtester masters.

I think that good traders must have some set of rules, and very few can say that they are 100% discretionary or mechanical. So I'm not against one or another, just some people fit better with one kind of trading or the other. I know successful traders but they are more discretionary than mechanical and I would be more confident to give my money to these traders than auto strategies, is just my experience, not the truth.

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  #133 (permalink)
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rtrade View Post
Hi Massive, can you tell me what are discussed in those Friday meetings?

:tape:

A recap of the week

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  #134 (permalink)
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BCNTrader View Post
Thanks, this example is nice for me.... Where's the difference between auto/mech and discretionary here? an automated system carefully created to fit the market that made lot of money on 1999 and 2000 should fail the same way that discretionary traders did on 2001 bubble burst or even lose more money.

The worst thing about this is that I bet that lot of people that think that auto trading is better are in fact backtester masters.

I think that good traders must have some set of rules, and very few can say that they are 100% discretionary or mechanical. So I'm not against one or another, just some people fit better with one kind of trading or the other. I know successful traders but they are more discretionary than mechanical and I would be more confident to give my money to these traders than auto strategies, is just my experience, not the truth.

A mechanical system, if it was designed for that environment would not have been trading when the environment was no longer present, or if it was a generic system, it would have failed within the parameters it was designed. The example was addressing some of the psychological issue of winning. Those traders were taking increasingly massive risks, because they thought they were invincible, as a result of their prolonged winning streak. It is the natural psychological greed complex, and natural god complex. There are good mechanical system, and there are bad ones, but in this case, a bad mechanical system that did not take the market environment into consideration, would have had controlled losses according to it's design.

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  #135 (permalink)
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It seems there are a lot of generalities here, and along those lines, one other note, a mechanical system will have a tough time scaling in and out of trades like some of the guys on this forum, FULCRUM TRADER, comes to mind. That IMO that is more the top level of discretionary trading and basically is for seasoned pros. But for scalpers, I don't see too many mechanical draw back other than price improvement on entries and exits. And that is a limitation of the software...

Example:

You program a system to buy when the Stoch crosses above 80 and the ADX is greater than 20, then sell when Stoch crosses back below 80. But you can't always enter with price improvement because your limit order (minus one tick from the bid or from the previous bar close) will cancel on that bar if not filled and you might frig up other parameters, so you're left with market orders. And you might grab those extra few ticks by watching price on the DOM and clicking to get out of the trade, instead of waiting for your bot's set target or trail stop to kick in.

Generally, discretion allows for faster decision making because the market is in flux, but the mechanical doesn't give a shit what the market does.

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  #136 (permalink)
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mainstream View Post
It seems there are a lot of generalities here, and along those lines, one other note, a mechanical system will have a tough time scaling in and out of trades like some of the guys on this forum, FULCRUM TRADER, comes to mind. That IMO that is more the top level of discretionary trading and basically is for seasoned pros. But for scalpers, I don't see too many mechanical draw back other than price improvement on entries and exits. And that is a limitation of the software...

Example:

You program a system to buy when the Stoch crosses above 80 and the ADX is greater than 20, then sell when Stoch crosses back below 80. But you can't always enter with price improvement because your limit order (minus one tick from the bid or from the previous bar close) will cancel on that bar if not filled and you might frig up other parameters, so you're left with market orders. And you might grab those extra few ticks by watching price on the DOM and clicking to get out of the trade, instead of waiting for your bot's set target or trail stop to kick in.

Generally, discretion allows for faster decision making because the market is in flux, but the mechanical doesn't give a shit what the market does.

Huh? have you programmed in NT C#, with unmanaged orders?

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  #137 (permalink)
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Please post a specific example of code.

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  #138 (permalink)
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mainstream View Post
Please post a specific example of code.

Unmanaged orders bypass the internal NT order rules. But you don' t even need that, all you need is to specify LiveUntilCancelled, in your regular orders, to prevent unfilled orders from canceling on new bar.

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  #139 (permalink)
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Xeno View Post
Mike - there are a few people on this thread that would support a new forum called something like

"Automated trading and testing"

How about it?

Created a new thread in the feedback section and we will discuss it there.

Mike

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  #140 (permalink)
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monpere View Post
Unmanaged orders bypass the internal NT order rules. But you don' t even need that, all you need is to specify LiveUntilCancelled, in your regular orders, to prevent unfilled orders from canceling on new bar.


so then...

if (Close[0] == Swing(5).SwingHigh[0])
{
EnterShortLimit(1, Close[1] + 1 * TickSize, "Short1");
LiveUntilCancelled
}

Will look for that instance on every bar??? But what if it doesn't occur again? You have to wait a full bar for a new order to generate...


Last edited by mainstream; June 21st, 2011 at 11:37 PM.
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