Got my fingers burnt!

Discussion in 'Automated Trading' started by themickey, Oct 24, 2012.

  1. I've written my own autotrading system which shows positive expectancy on testing and I am relatively new at trading it.
    A couple of days ago I had it supposedly sitting on standby so as not to take any trades and during the day while at work the system placed a long trade at the very top of the day.
    As I was leaving work I received a phone call so instead of driving, sat and chatted for 30 minutes making me even later getting home.
    When I walked in the door I was down $1500.
    Man was I shitted to put it mildly.
    There was a small glitch in my formula which I hadn't spotted in spite of all my backtesting.

    Conclussion: Several, but one which seems to come back at me often is that errors in trading are a large reason for many of our losses.
    Funny how errors often cause a loss and not a win.

    Anyhow, the loss really shook me up, I tried revenge trading during the night, all night in an attempt to regain my loss.
    Result;another smaller loss and totally buggered at work the next day.
    Went to bed at 6:30PM last night to recoup my energy.

    Just thought to share, I hope to learn from this and remain positive.
    Ps: Don't tell me about revenge trading, I know I was an idiot but no pain, no gain (in the lesson department of the brain)
  2. Error in design, or error in implementation?
  3. The system design is great imo.
    I have a piece of the formula which is an emergency kill switch 'go flat'
    It takes me out of a trade but what I wasn't aware of it it had a hole in the formula which allowed a trade in.
    Took a minute to find and a minute to recode and fix, but 'oh the pain'. :)

    I had the formula running during the day with kill switch on, alas.... :(
  4. 2rosy


    welcome to software. this might help

    dont ass-u-me. turn off anything you dont need
  5. cheap education
  6. Relative to Knight Capital, BATS, and the NASDAQ-FB IPO !!!
  7. Neither....just lack of robust testing.
    Also, having a "go flat" kill switch is not enough.
    The switch has got to also cancel all open orders, and stop all future new entries.
  8. I'm not a system trader but it would seem simple enough to rig up an email connection to alert you of trades unless you are doing hundreds a day.
  9. You don't mention a "forward test" ... if you are not doing these, add them to your process before you trade "live" ... and run them for long enough to ensure you can build a decent picture of how the strat behaves against real data ...

  10. +1.

    So true, and even my implementation of this is half-assed. I rely on my broker's risk management functions too much. This thread should inspire me to really clean up some of these issues.

    (One frustration I have as an individual trader is that I have to watch the trading and then go program when I have the energy to do it. To test new features (even safety features) is a chore. To keep a separate instance of my trading platform with all the same features, I have to shell out yet another platform fee + another round of subscriptions. So features get rolled out much more slowly than I'd care for, although I may just need to bite the bullet and pay out the fees. And most brokers just don't have decent off-hours testing facilities.)
    #10     Oct 25, 2012