I'd like to hear your stories about how you got into automated trading? I'm particularly interested in people who are not software engineers or programmers, and how you overcame your handicap? Did you hire programmers or did you learn how to program yourself? Did you use third party so called "automated trading platforms" or did you build a program from the ground up? Were you a manual point and click trader before? What made you finally cross into the automated territory? Where did you learn all your know how? How steep (financially) was the learning curve (i..e how much did your system lose money initially or was it a winner right away)? On average how long has your system been "working" (note: profitable) in the field?
Okay, I'll bite. I used to be a discretionary point and click trader in the late 90s and did okay. Nothing spectacular. Had some programming abilities all along, but finally several years later, I forced myself to learn C# and become a better programmer. I had many strategies over the years. Lost probably more than $40k (I can't remember for sure and prefer to forget) dabbling in things I didn't really understand. Foolish mistakes and naive assumptions. Eventually things started coming together and I started making strategies that worked. For me, and I believe this is the case with most people. A single strategy has a limited shelf life. I had an equity strategy that traded very frequently intraday, and did very well for a year and a half (it evolved along the way). That was the longest lasting single strategy. Just recently, I've made a variation of that strategy and running it in the futures market. 99% of my strategies are intraday automated fast trading. I've dabbled unsuccessfully in swing trading. Other than that, I have a non-automated (yet systematic) strategy that trades every two weeks in my IRA that has done well for years.
Interesting. I find a lot of traders implement automated strategies for day trades only. Few create algos for swing trading positions. Any reason behind this you think?
I have no idea. For me, I still sit at the computer monitoring even though it is automated. You never know if something will go awry. I'm a pretty patient person, but not patient enough to sit around waiting for an automated swing trade signal to show.
I'm not sure if many individuals do this, but I'm sure the quant hedge funds do. The dollar amounts applied to these longer-term quant strategies is colossal and completely dwarfs that applied to HFT. Check out "The Quants" by Patterson if you want to learn more about these funds and their origins.
Hey 2rosy, If I can make a simple analogy, is some of the algorithmic trading in the institutional side not much different from a forex guy who punts for astronomic returns using mt4 while using their algo for a limited time(minutes to days) based on the occurrence of a targeted regime? In other words, how are those systems managed compared to your turn key systems sold thru introducing brokers? Thanks.
I had a bad experience with Pascal and Cobol around 2000, which lead me to avoid any code writing for over a decade... Around 2005 I learned to trade, scalping the order book and flipping credits... after reg NMS came in I got wiped out and decided to automate. Since I didn't want to write a line of code I moved to a business analysis role learned the technology that moves of the markets (the learned to talk FIX, OUCH, ITCH... designed gwservers, feedparsers, pretrade checkers, smart routers, etc...) and tried to do automated trading more than a few times with no luck... I was always hitting the wall of my non-programmer-self... around 2010 I started playing with code again, with esignals scripts and mathematica... but not too seriously... until 2012 when I took a Python course in coursera, followed by other courses in Octave, R, SQL... etc... Nowadays Im working on a team putting together an algo system, near going live. The only reason we've got this far was cause I finally got around getting off that self imposed non-developer label that was holding me back. Getting rid of that label allowed me to join my current team with an open mind and ready to learn, and to cover more ground in 2 years than I covered in the previous 5. my 0.0002
Interesting response eusdaiki. I have been debating whether to take the plunge and spend the time learning R or Python, or keep trying to work in Ninjatrader. I have also put up a self-imposed developer label as well. Getting through that block will take some work, but it is certainly doable. You may have convinced me to move forward.
I used to program a bit with Metastock. But didn't like the amounts of money needed to trade from that platform. So I turned to MT. Chose MT5 as the newer and cheaper platform. Still with it. I bought a book to have a go at MT5 programming. Stuck 1/3rd way, without much clue of what it is talking about really. Bought a program that looked super in the system tester but failed from the first trade and lost me a load of money. The vendor replied but wasn't helpful. No refund etc. So back to manual.