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View Poll Results: Does the Previous Day's close give you an indication of which side to trade?
Yes 15 60.00%
No 6 24.00%
I don't know 1 4.00%
It's possible 3 12.00%
Voters: 25. You may not vote on this poll

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Old Apr 24th, 2012, 12:02 PM   #19
trhudson
 
 
Join Date: Aug 2002
Location: Raleigh
Posts: 184
Quote:
Quote from trhudson:



He laughed and said "You know, what you are doing isn't all that complicated."

The sad part is - I found out later that he attempted to do what I was doing, but was unsuccessful. The problem was, he had NO CLUE as to what I was doing. I am certain he was very confused when there was a long position in one stock and a short in another. (And this was not a pair trading strategy).

WHY was he unsuccessful?

He most likely keyed his entry off of the SPY - BAD IDEA.

He did not have a 100% automated system. There is no way a manual trader can enter an order as fast as an automated system. Not to mention, the program has no emotion.

He did not have the information that he needed. - In terms of Research and a data-mining application to find out what would / would not work.

He did not understand that what I was doing was all calculated and automated. I tried to explain this to him many times, but he would not listen. I attempted to tell him that the program took less than 3 minutes to setup, but it would do everything on it's own and I would not enter a single trade manually.

Just a few months ago, I was contacted by someone who has been in the industry for a very long time and the question was - If you had a profitable system, whey did you not size up?

I proceeded to explain that my goal was to become more like Toby Crabel and CCM in my approach to risk management. My goal was to take smaller trades, risking less capital on each while diversifying my strategies as well as my risk. This approach simply cannot be achieved manually, there is just too much going and too many calculations to make.
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Old Apr 24th, 2012, 12:28 PM   #20
Rationalize
Registered User
 
Join Date: Jan 2010
Posts: 841
Does calcing in a spreadsheet count as manual?
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Old Apr 24th, 2012, 12:49 PM   #21
trhudson
 
 
Join Date: Aug 2002
Location: Raleigh
Posts: 184
Quote:
Quote from Rationalize:

Does calcing in a spreadsheet count as manual?
I personally do not think so. I started out using a spreadsheet that got real-time quotes and changed colors to alert me as to when to get in and out of a position.

That's when I got the idea that I needed to develop a program to make the trades for me. Excel is an excellent starting place, but I wanted something much more user friendly and I wanted to be able to adjust the algorithms in the UI, not in code. I also wanted the ability to back-test and mine the back-tested results to determine if daily patterns could improve a systems performance.

I will add, that it's still much quicker just to get the program to make the executions. This way, you don't have to stare at the screen.
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Old Apr 24th, 2012, 01:11 PM   #22
Rationalize
Registered User
 
Join Date: Jan 2010
Posts: 841
Agreed.

But I'd also say that while paying retail commissions, trading faster than manual doesn't necessarily help.
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Old Apr 24th, 2012, 01:39 PM   #23
trhudson
 
 
Join Date: Aug 2002
Location: Raleigh
Posts: 184
Quote:
Quote from Rationalize:

Agreed.

But I'd also say that while paying retail commissions, trading faster than manual doesn't necessarily help.
Totally agree! It has never been a good idea to trade paying retail commissions.

I have been asked many times if my platform is capable of graybox trading, allowing a trader to take a trade on discretion. While there is a simulated version that could act as a graybox, It was not designed this way on purpose. In my back-testing application, I always calculate what would be a typical entry for a discretionary trader = The high of the minute of my entry. This alone can take a successful system and turn it into a mediocre or losing system. While this is quite unfair in it's calculation and assessment, due to the fact that the other components of the trade are not adjusted, only the entry. It gives me a good idea of what excessive slippage can do to any system.
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