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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

  #281 (permalink)
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Moderator Note


This thread should be moved to the Automated Trading section




If the OP agrees, let me know and I'll move it.

https://futures.io/elite-automated-trading/

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  #282 (permalink)
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Big Mike View Post
Moderator Note


This thread should be moved to the Automated Trading section




If the OP agrees, let me know and I'll move it.

https://futures.io/elite-automated-trading/

Mike

Sure Mike you can move it to where it fits best. This thread kind of walks the line between psychology and auto trading. I lean towards leaving it here as it is really about how I conquered my psychological issues. But I will leave it to your discretion on where to put it no pun intended.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."

Last edited by liquidcci; July 6th, 2011 at 05:41 PM.
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  #283 (permalink)
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I'm sure this is relatively easy to code but what program would you use to backtest the code?

Here's an example:
Historical data (200 days) of a hammer (or dragon fly) candle stick with 1.5 times or more the average volume in a 5-10 day downtrend on a 1 hour chart.

This is of nothing of great importance, just something I would like to see.

I personally love stats so I would most likely get caught up running these sort of backtests all day
while taking notes.

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  #284 (permalink)
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Massive l View Post
I'm sure this is relatively easy to code but what program would you use to backtest the code?

Here's an example:
Historical data (200 days) of a hammer (or dragon fly) candle stick with 1.5 times or more the average volume in a 5-10 day downtrend on a 1 hour chart.

This is of nothing of great importance, just something I would like to see.

I personally love stats so I would most likely get caught up running these sort of backtests all day
while taking notes.

With NinjaTrader, you can write an indicator that looks for those instances, count them or calculate your desired stats, then load 200 days of data on a chart with that indicator.

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  #285 (permalink)
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liquidcci View Post
I think most pure mechanical traders do see the market as black and white it is just our nature. I think we also see any hybrid as a deviation from a system where you go into a black hole on being able to measure the probabilities.

I also want to clarify most of my comments on system trading revolve around day trading. I think the shorter the time frame the more essential a rules based mechanical system with no discretion becomes. In fact I believe strongly trying to day trade in a discretionary way will end badly at some point.

I think if you have a longer time frame days, weeks, months, years and do things like build options positions discretion can play a positive role. But those types of strategies give you plenty of time to maneuver like a chess game. You make educated guesses but usually get the opportunity to hedge those guesses and build wide positions that market can land and still make a profit. Where day trading is very unforgiving of any discretion.

Well, you have had some quite incredible scalpers. Rotter and Priston comes to mind... Both earning 8 figures before venturing out.

It really it quite simple. If you can build an algorithm doing it, you have several minds being capable of the same. In fact, an agile mind is more powerful today's computers in several fields. Why would it be hard to believe that someone has the innate ability to model markets?

But I agree that automation is favorable when it comes to day trading, at least if the trade frequency is high. The more often you execute trades, the more sense it makes to try to automate that. When it comes to longer term trading where fundamentals plays a part, I will claim that it makes more sense to use discretion. There are plenty of billionaire investors, but not many day traders.

As for myself, my discretionary approach still outperforms my automated ones. Both on returns and risk.
I only take a few trades a day, though.

Personally, I find it better to take fewer trades with larger size...


monpere View Post
Nothing wrong with guessing... as long as your guesses have a statistical foundation that says you will be right x number of times out of y.

Exactly! I used to make my living off sports betting (which is legal here), and I still use a lot of the same principles when it comes to trading. In fact, they work much better in this field.


rpm123 View Post
I'm thinking it is more of a natural progression, and nuanced at that.

First, you trade by the seat of your pants, ride the emotional roller coaster, try out different indicators, and blow out your account.

Second time around, you build rules for taking trades that perform well in the market, and also address your emotional limitations. You follow them most of the time, and do fairly well. But not as good as you can mark up a chart, according to your rules, would have done that day/week/month.

Then, you look to automate - thru the ATM, and ultimately thru a bot. Executing a strategy perfectly. And then fine tune the bot, when it does not do what it is suppose to do.

That is the stage I'm at. Reading the pitfalls and positives of automation here and elsewhere is helping me to fine tune my strategies to fit automation.

Thanks for the thread.

I somewhat agree. But I also take it most people here are just trading off indicators based on price series?

If someone also has automated fundamental data coupled with price action, I would be most interested in hearing about it...

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  #286 (permalink)
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I just want to add that am I very much in favor of automation. And I hope to be able to model my intraday trading soon enough..

I am advocating both... There usually are a couple of very good opportunities every year where it makes sense to be aggressive. You lose those with automation, and those events are a good way of building wealth.

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  #287 (permalink)
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Lornz View Post
There usually are a couple of very good opportunities every year where it makes sense to be aggressive. You lose those with automation, and those events are a good way of building wealth.

I would agree. A couple of years ago when market went into free fall FCX went from around $120 to $15 per share because of hedge fund liquidations. It now sits at $53 which is actually $106 before it split. I used pure discretion and bought calls and long verticals when price was at $17 and profited quite nicely.

I will not use any discretion day trading but black swan event on the right company or commodity to hold for longer term I will.

My view is there is a place for discretion but only in longer term.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #288 (permalink)
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One other thought to anyone thinking of going an autotrade route. If you have developed a system but are not a programmer. There are programmers you can pay to code your scripts. In other words you do not have to know how to code to have a bot. I think some don't explore going this route because they don't know how to code. I am very very basic in my coding abilities and the bot I have goes beyond those abilities.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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  #289 (permalink)
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Good thread.

I fully agree discretionary day-trading is not for everyone.

I always considered myself as disciplined but when it comes to trading you have to be really, REALLY, strong.

Also I've decided to automate my strategies and I discover a whole new world.

Actuall I find that doing research, programming, back-testing etc ... much more fun than trading in itself.

I don't feel exhausted at the end of the day anymore and the losses don't affect me.

So there's some great discretionay scalpers out there and my hat off to them but everyone has to find its own way

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Lornz View Post
It really it quite simple. If you can build an algorithm doing it, you have several minds being capable of the same. In fact, an agile mind is more powerful today's computers in several fields. Why would it be hard to believe that someone has the innate ability to model markets?

From working at banks and being a monkey boy for "smart money" it seems to me every retail trader overestimates institutional trading.
Trading is a strange mix of right/left brain that the guy who gets a perfect SAT score doesn't have.
To my mind the ultimate trader is some burly, seasoned Chicago pitt guy with decades experience but also has a phd in financial engineering.
Lenny Baum is Simmon's Charlie Munger but you never hear about him. He can model anything and also has a speculator mindset.
IMO the real problem traders have overall, retail or institutional is laziness. Neither want to study hard enough to become Lenny Baum/Simmons or Wykoff/Livermore, let alone both.

People will buy any bullshit book on TA, yet all the advances in trading fall under quant finance for the last 15 years. You can skip college and learn Mathematica, yet try to find shit on mathematica and trading.

There will always be an edge to find in any kind of gambling game for those who are willing to far out bust their ass.
Refer to my sig quote...I quote that line whenever I hear someone say everything has been invented. As if people didn't think the same at that time.

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