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Auto trading is only thing that conquered my darkside
You see - all of these analogies pro automation are flawed. You are trying to accuse me of something because you fail to see the nuance in my argument. Could this be your technical nature?
Yes - an airplane can fly itself
Yes - a GPS can replace a map
Yes - a neat little machine in the Royal Orchid lounge at Narita can pout a perfect pint every time
These are examples of static implementations that operate in isolation of other humans. Hence, we don't have cars that drive themselves. This could of course be done if ALL cars drove themselves. We don't have robots that can comfort a child. We don't have programs that can design a cool looking building. We don't have a program that can outdrive Michael Schumaker on an F1 track.
The retail trading community is brainwashed to thinking that trading is a purely technical endeavour. Most trading books are all about TA. Most traders read these TA books and then follow these techniques to hand their money over to more savvy players.
Pick any career and people will accept that you can improve over time. Doctors improve over time, surgeons do, bricklayers do, pilots do etc. etc. etc. Yet a large percentage of the retail trading community believe that trading is different from any other career. That you merely have to 'crack the nut', figure out the formula and then sit back and watch the pennies roll in.
Just like anything else - trading is a skill. It's not merely a left-brain activity. Skills develop over time in trading just like in every other career.
"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."
What we are really talking about here is not non automated vs automated. We are talking about a mechanical system vs discretionary. If you are not shooting from the hip, guessing the market feeling the market, or using jedi skills to determine the direction of the market then you must have a rules based system. If have rules essentially are mechanical. If mechanical then only one step away from automating that system.
I understand the 'skill" you are talking about as I traded that way for 7 or 8 years and it is a losing proposition. I had years that I made quite a bit only to give it back the next. My first year I thought I was a genius had skills like you would not believe only to find out I was foolish. The problem in that type of trading is the very things that cause alot of money to come into your hands will eventually be the very things that destroy your account.
"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."
Or, I think you have the opinion that anyone who's auto trading cannot make a living manually trading.
I can do it manually, but not without smoking a pack of cigarettes before the closing bell and not without getting insanely pissed when I miss a trade that I should have made (under my strategy "rules") because I was busy signing for a delivery by UPS or I was talking on the phone, etc, etc, etc.
Again, the other aspect is one you're discounting. You absolutely CAN NOT scale in and out effectively (intraday) with instruments like CL or GC. Not unless you're going after huge profit/loss goals (which effectively removes the "intraday" moniker).
You cannot employ sophisticated money management schemes like parabolic stops, tiered stops, etc, etc....MANUALLY. You simply cannot calculate that quickly.
Now, on other instruments that move like glaciers, possibly.
My point is that automation encompasses more than what you think it does (or at least that's the conclusion I'm drawing from your posts).
I disagree with the notion that you're methods will eventually end up bankrupting you.
As I stated earlier, if it works for you, then great. Stick to what works. However, the flip side of that argument is the guy that's still riding his horse while everyone else is riding in automobiles. It may be effective, but how effective is another argument.
For YOUR particular strategies, perhaps discretionary and manual is perfectly fine.
I can't tell you how many times (before I learned automation) that I said "man, this trailing stop is cool, but wouldn't be even better if...." AND THAT IS THE TYPE OF NEED THAT LEADS TO INNOVATION.
So if you can make a living on the preset tools your platform provides, great. I probably can too. But it makes it MUCH easier for me to make my own tools to build my cathedral with (rather than just accepting the ones the platform gave me.)
I'll close by saying that if it wasn't effective, then people wouldn't be doing it.
It's like the whole steroid argument in baseball. Everytime I hear an idiot say "it doesn't help them hit home runs" I just ask them, then why in the SAM **** would they do it? The proof that it works is self evident in the fact that they were all doing it. If it wasn't effective, no one would do it. If wearing pink underwear helped a guy hit more homeruns, then they'd all be wearing pink underwear. But you know what? It doesn't, and that's why I'm nearly certain that most of them don't.
Using my analogy, I'll agree with you. Any random guy can't just go out and roid up and hit homeruns. He has to be a professional baseball player for it to be effective.
So your point is taken, if you don't know how to trade and you don't understand the fundamentals involved, then auto trading probably won't help you. But for those that DO understand those things, it simply helps to make us more effective.
I can't put it any more plainly than that and we've already been clowned about the bantering in here So I'll stop at that.
I do think the market is a problem with a mathematical solution! I think the market is a problem with 1000 mathematical solutions. I think it can require very little or no skill to trade the markets depending on the way you choose to trade it. What it requires for some, is finding a market phenomenon that repeats itself, and taking advantage of that phenomenon. There are 1000 of these phenomena that can be exploited, all you have to do is find one, understand it, and devise a way to exploit it (entry/management/exit). Once you have defined that, there is no skill involved.
You may choose to watch a scrolling time and sales window and make decisions based on that, and that may make you feel you have developed a skill beyond that of others. But, guess what, if you break it down to it's core, you are looking for patterns in that T&S window, and guess what again, a pattern is a mathematical concept, it is not a skill.
If you see a double bottom, with a MACD Divergence while the ATR of the past 20 bars is greater then 10 ticks, then press the blue button. If you press the blue button 10 times, on average, you will get a smiley face 7 out of those 10 times. What skill is involved in pressing the blue button 10 times?
Your style of trading may truly require skill, I don't know, but that's because you want to trade that way, not because it is the only way to trade profitably. There are plenty of others making money without needing any special 'skill', because all the necessary thought, work, effort, and 'skill' required to identify, enter, manage and exit their trades, have been put upfront, so all that thought, work, effort, and skill does not have to be repeated for every instance of every trade. They have put a process together to streamline all those steps, whether that process is written down on a piece of paper as a set of rules, or it is written down in a computer's memory as binary 1's and 0's
Large institutions use HFT's. Do institutions use HFT's because they make money or because they loose money? Do HFT's require any special trading skills to make money? Are HFT's automated? Are HFT's mathematical solutions that make money in the market? Now consider that thought again, are special 'skills' that can only be developed with experience required to trade the market?
The market is in a sense all numbers. Behind all those numbers there are human beings that are moving the market because of fear and greed even if they are using robots to do it. But that movement is translated into numbers that then can have math applied. So in a sense the market is all mathematical and most aspects of it can be measured although not always perfectly.
My auto system takes into account momentum, trend and to a degree price action. If you look at the patterns that trigger a trade in my system they all have a psychological basis. I simply use math to measure that basis and capitalize on the opportunity. Putting that in an a system that automatically trades then removes my own bias and and mistakes.
This takes skill that can be refined over time. You can get better at seeing certain things that exists in the market and then developing a system around those things. Mechanical system trading does take a certain skill set.
I guess my point is by watching the market you can learn and become adept at certain skills. These skills are very important and take time to develop. But I believe ultimately if you do not develop what you learn into a mechanical system that can be measured it will be a losing proposition. I further believe that system does not have to be automated but can benefit most traders greatly for reasons I have already stated in this thread.
"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."
The more mechanical I become following my ruleset, the better day I have. Bots seems a logical extension. Not there yet, and I would not leave it unattended for at least 6 months, but I can see the advantage.
I think that is the progression. Once you realize your success depends on the rules of your system then a bot is a natural extension. I keep an eye on my bot. I don't pay attention on a minute by minute basis but whenever I trade is entered I receive a text. I then will turn more of my attention towards it and keep at least one eye on it. I do that in case something goes wrong from a technology standpoint with hardware or software. I take a laptop with me when I go out somewhere and can access via rdp my server if needed. So I always have access to it without it controlling everything I do.
"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."
"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."
So I'll stop at that.
