Are Automated Trading Systems Making Money

Mathematicians are able to predict the orbits of stars and satellites and other clever stuff but the complexity of open markets has as far as I know got them stumped.
Forget your MACDs, RSIs, Moving averages, Channels etc. they just don't predict at all well.
This may partly be because of rational and irrational traders taking profits and cutting losses.
But there is no shortage of hopefuls trying and scammers making false claims.

 

Thanks for your input Humpy.

 

spydertrader posted for years on his trading system.

 

I have been making money with automated systems for about 10 years. I re-optimize from time to time, and sometimes a system stops working (the equity curve goes flat or heads down) and I turn it off.

 

Thank you Steve for contributing. This is great to know.

 

It do work if you have a solid method that work. Made good money on my current legacy system during 2010-2015. But due to the low volatility environment in stock market we have now no signals are generated anymore. In 2016 the amount of signals went down by 50% and for 2017 there have been zero signals so far.

I'm developing other systematic models to counter this.

 

Thanks bln for response.

1. What platform do you use for developing?

2. Do you swing trade or intra-day swing trade or scalp?

3. How do you trust your historical back testing data and back testing simulation? Did you do a real time vs back testing comparison analysis over X amount of trades?

Thanks

 

Several traders I know make money with automated system, some make a good living and a couple have made it big.

You need verifiable records to determine is this is possible. Here is a tweet from one of those I follow with an example from Quantopian contest.



More than 22% in less than a year. Not bad at all and Sharpe is high too. I say go ahead and try to develop your own systems. You need to be dedicated and disciplined and will succeed.

 

Thank you bashatrader for this great post.

I am just aware of Quantopian contest. This is a very good contest for low cost.

Yes, i am developing my own systems. Right now I am understanding the limitations and capabilities of platform I back test ideas with.

Thanks,

 

Many firms and people have made big money trading automated systems. However, it is possible that knowing this may not help you.

Renaissance Technologies has made billions with automated trading and is in many ways one of the world's most successful hedge funds.