Temptations, yes. Which come with freedom. That's the problem of having to work with more people. I would rather work with a programmer who will be paid and let go, because I want to preserve my freedom. More people, as in a company, can add resources, but can also slow you down. I think I should stay between #1 and #2. Because if I stay all the time at #2, I may fall into #3, and get screwed. But actually the fact is that it is much easier to do nothing at all, than to do some things. It takes less discipline to get used to doing nothing at all. And whereas I risk getting to zero with #3 (because I am reckless and suicidal), with #1 I should only risk a long drawdown of 1 month during which I make no money at all. Besides, forcing myself to stay at #1 will motivate me to try and improve my system.
Before he goes he will implant a backdoor in your program or mess it up to place random orders and he will encrypt that code so well you won't know what was it that hit you.
How does everyone here rate tradestation securities? Is it an efficient alternative? In the sense if I am happy with the way a strategy gets back-tested on tradestation, will they execute it correctly? And, also, do I send my rules to them, or do I have to keep my application running the whole time? (It would have both advantages and disadvantages).
As with any server based system, a malicious host can have complete knowledge on what is on your hard drive. I am not saying TS will do that, but theoretically they can. Normally, they would not even bother doing it because they know you will lose all your money at the end, this is what statistics say, except in the very low probability case that your are lucky enough ( I hope) to have a winning streak and withdraw to go on a permanrent vacation away form the markets before you face the black swan. Got it?
I have an important update on this topic. Today I came home and I found a -500 on two of the systems. As usual I couldn't take that much of a loss, and I intervened. This time I got unlucky and, even though I turned one of the -500 into a -100, the other one turned into -4000. This made me understand that I am not ready to take the drawdown of my systems and that is what pushes me to act and try to compensate the drawdown with my own trades. If my system made money consistently I certainly wouldn't touch it. The problem is not my discipline. The problem is that my system is not good enough to trade all the contracts that I make it trade. I mean, as long as everything goes right, it can double capital every month. But I am not prepared to take those months in which it loses 50%. Then I start acting, and with my actions, I manage to lose everything. I gotta work on two things. Improving my system. And the other, if the system stays like this, change the money management. I certainly can't let it reinvest everything as it's been doing. I cannot stand the sight of it losing this much money, so I have to say trade not one contract every 5000 I have, but 1 contract every 30000. I have to do something I would have never imagined: limit my leverage. In other words, I have to use less capital than it's available. And the solution is certainly not to modify manually what the system does, because this has made me lose even more so far. Recapitulating. 1) What causes my intervention is not my lack of discipline but the fact that my system does not work, given the money management I implemented. It risks bringing me to ruin in very little time. 2) Solutions are two. First I should try to improve the system, but it's not something that will happen that quickly. So in the meanwhile I have to limit the number of contracts it buys to avoid both 1) the risk of ruin and 2) fearing ruin so much that I intervene and cause ruin. I thought I had it all figured out, but I didn't. As soon as drawdown hit me, I realized that the problem is not me, but the fact that the systems are not that good. Making 100% profit each month for two months in a row, should not lead you to think you have a system that makes 100% a month, if the third month you lose 66% of your capital. Then on that system it makes sense investing only 66% of capital, and it's a system that actually only returns 28% a month on average. Do not expect it to return 100% every month, because it will drive you crazy otherwise. My problem is that I kept on wanting to forget that my system had a drawdown, and that I didn't know when it was coming, and this whole thing made me unstable.
Here's a little file I created to calculate what would be the best % of my capital to invest if my system doubled two out of three times (months), and the third time it lost 66%. Different values can be tested.
You actually just need to: 1. stay the hell off of your system, 2. trade less contracts (which will give you a better money management), 3. invest your time and creativity in develop more (and better) systems, and 4. stay the hell off of your system. *** You're smart enough to develop an ATS, but not smart enough to know that you should leave it alone. Go with your strengths, not your weaknesses.
Well, if you already know this then why are you trading your "system" with real money Dude, your money management is fucked up if you're trying to double your capital every month.
Travis, I have to agree with Monti on both counts: 1. Stop trading with Live money until you work out the kinks in the system. 2. Change your profit goals to go after smaller returns. That will allow you to lock into profits quicker and not be hanging around, waiting to lose. All of this is easier said than done of course. But doing something simple like saying "hey I'm up 10% on this trade and now it pulled back 2%, I'll take the 8%". The more you are up, the larger the trailing stop loss, so if you are up 20%, you can wait for a 4% pullback instead of 2%. Sometimes it doesn't hurt to let the market come to you, instead of you always chasing the market. Regards! Ed
If you tested your system and its net positive over the year for example, if you left it alone for a year, you would have made money, then you need to leave it alone. Just check your balance once a month if looking at open positions causes you so much pain. I am able to look at longer term trades and if something fundalmentally happens, I will get out quickly with a loss. I am not at the point where I can totally automate my system and still need to enter orders into it. The sad thing, 2 traders said they could help me program a simple formula, and I still have not received anything back from them yet.