Got my fingers burnt!

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

  1. themickey


    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. themickey


    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