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Strategy builder analyzer results issues long term
I can build a simple strategy in the builder. Run it on the analyzer for a month and it will make a ton of money. Run it for 2 months with the 1st month's settings and it makes less. This process will get to 50/50 (at BEST) the more months you run it (using the 1st month values). This process will be the same no matter what duration you initially ran it and kept those settings. If you ran it profitable for 6 months. Then use those settings for 2 years back, it will be 50/50 at best. WHY? I just don't get it. No matter what strategy I build, it loses over time.
That begs the question... Does automation work at all in the long run?
Or am I just doing something wrong?
IF you optimize every X amount of days/weeks/months, that also doesn't work. I have tried to run a strat that is profitable one week ago. Then run those settings for the next week. Loses. I have tried that monthly also. Loses.
Now, there MIGHT be some baseline (vix, volume, atr, range, volitility, etc), to use as a base/constant in calculating the settings? I don't know.
There a gaggle of bot companies out there promising profitability. How are they getting around the this problem? Or are they just selling stuff (knowing automation doesn't work in the long run)?
Can you help answer these questions from other members on NexusFi?
I don't do algo trading so I can't directly address this. But the general reason is probably the same as it is for discretionary trading: the markets change. Being able to recognize and adjust to a change when it happens, or soon enough, is hard however you are trading.
For specific suggestions on automated trading, I suggest the many posts in this forum by Kevin Davey, @kevinkdog, who has obviously gone through this and who knows what he is talking about. (He can't mention this on the forum, but I can: search Amazon for his book on algorithmic trading. People who have used it tend to be happy with it.) Not that any one book or one person is going to turn someone into a profitable trader, and probably won't. But it may help to see how someone else has managed this particular stretch of the road....
The answer to this is much simpler: they're lying. They have indeed found a way to make money from automated trading, but it's selling stories to the hopeful. Don't be one.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
