How long before you were fully automated?

Discussion in 'Automated Trading' started by travis, Apr 18, 2009.

How long did it take you, since you started trading, to become fully automated?

  1. 0 to <= 1 year

    22 vote(s)
    18.5%
  2. >1 year to <= 2 years

    16 vote(s)
    13.4%
  3. >2 years to <= 5 years

    36 vote(s)
    30.3%
  4. >5 years to <= 10 years

    25 vote(s)
    21.0%
  5. > 10 years

    20 vote(s)
    16.8%
  1. travis

    travis

    Don't answer if you don't use a fully automated trading system, or if, for any other reasons, you feel that you can't answer correctly.

    By "since you started trading" I mean "since your trading career started", which means the day you decided you were going to be a trader and started working on that task (not as children say "I will be a doctor"), either by trading, paper trading or also by reading manuals on trading. For example, if you did research for 5 years, built your automated system, paper traded it for another 5 years, and only then started real trading, that would count as "more than ten years" (and not "zero to 1 year").
     
  2. travis

    travis

    The reason I came up with this poll is that I was thinking of all the time and steps it took me before fully automating my trading, since I started trading in the Fall of 1997. So I was wondering how long it took the others on this forum.

    Since the Fall of 1997, I tried everything, failed many times and often had to keep on failing for years before realizing my mistakes. In this sense, my trading career didn't follow a steady progress, but rather very irregular, with many stalls and accelerations.

    With a few constants. I never thought of giving up and I always thought success was around the corner. Also, I only focused - from the very beginning - on technical analysis, and before even knowing it was called "technical analysis", I thought I should just study the charts and try to predict the future. Lastly, I always thought I should only trade derivatives, because if I knew how to make money why not make more? (If I didn't know then why should I trade at all?).

    The major milestones in my trading career since the beginning have been as follows.

    1) 1997: Technical Analysis.
    I realized , from the start, that I should only focus on charts and forget altogether about any news, budgets, balances of the companies (no fundamental analysis), and therefore also that I should only trade indexes, so my trading wouldn't be affected by news, insider info and similar things that there was no way I could ever learn and cover, or use in my predictions.

    2) 1997: derivatives.
    I realized , from the start, that if I knew how to make money, I should trade with leverage, that is, derivatives. And to people who said "what if you lose?", I replied "why should I be trading at all?" If you're planning to lose, then you just should not trade at all.

    3) 2002: trading systems.
    I realized that using approximate notions of technical analysis for picking trades was not good enough. I needed univocal rules, and therefore that trading systems were necessary. I started experimenting with Tradestation.

    4) 2003: futures.
    After years of trial and error, I concluded that the best and only derivatives to use were (liquid) futures. Options and other products were too complicated, unpredictable, too much work, spread, and basically not worth trading.

    5) 2005: US broker.
    After more years of mistakes, I concluded that I couldn't trade futures with a broker in Italy, where I live, because their commissions are too high, and service is too poor. So I finally opened an account with IB, that beats by far any Italian broker by any parameter.

    6) 2005: automated systems.
    I realized that trading systems implemented by a human are not good enough, especially for me, and that I needed an automated system, and started working on it, even though I lost focus of the backtesting in the process, and implemented an automated system that I couldn't backtest.

    7) 2008: several automated systems.
    Realized that the system had to both be backtested and automated. Also, realized that the more systems I had, the better. And started creating more and more systems, that all traded the same capital.

    8) 2009: money management and full automation.
    I realized (because of losing everything twice) that I couldn't have any part in my systems or trading even. I couldn't "help" them to make more money by adding some discretionary trading or second guessing their choices. I couldn't help them recoup losses faster. I had to fully automate them and this included money management. They had to take care of everything, even avoid financial ruin by not reinvesting everything all the time, as I had been doing. And I had to maximise the % of capital invested by non correlated systems, and by the best performing systems by "Return on Account" (instead of letting them all trade equally, as I had been until then).
     
  3. Interesting post.

    Can you elaborate more on #6?
     
  4. No one can have their computer trade for them and make money. This is a bullshit question. Computer algorithms don't have intuition, which is what really makes a trader from a wannabe. If you think you will be able to program an indicator that does everything for you, while you sit back and let the atm fill up, you are sorely mistaken.
     
  5. 1999 - Dabbled in Dot com stocks

    2002 - Attempted full time manual stock trading while out of work.

    2004 - Open futures account with IB, automated entry and exit within a few months.

    2005 - Fully automated system (inc positions sizing) on one maket.

    2007 - Fully automated systems on several markets.

    Cha Ching!!! Sit back and relax and wait for my systems to catch market fear and greed inefficiencies... and dont pull the plug on the system during the inevitable drawdowns!
     
  6. This is 100% false. Made 52% last year and already up over 30% so far this year and I am 100% automated. Trade approx 17 times per day and end up flat every single night. I was partially automated throughout most of last year and fully automated in October 2008.
     
  7. Best to ignore the na sayers or the thread will go off topic, there are plenty of ET threads discussing if fully automated trading is possible or not.
     
  8. RainMann

    RainMann

    Travis

    I started about 4 years ago with forex and some option trading and finally made the move to the E-minis about a year ago. Being a programmer at heart (many many years doing this) I immediately began scripting eSignal and TradeStation but not with the notion of Auto-trading. I simply wanted to know how a certain trade would perform if I took the trade every day. It was actually a statistical method for me and I could test stop values and target values. Anyway, it grew from there.

    And it was just last week that I finally toggled the switch from SIM to LIVE on one of the strategies. Just like you, I am trying to make decisions for it, completely forgetting the fact that I had already made the decisions when I programmed it. Each time I turned it off, the trades came in fine.

    Anyway, it's going to be an adventure I'm sure. So best of luck to you and your systems and may your connection never go down. :D

    RM
     
  9. travis

    travis

    6) 2005: automated systems.
    I realized that trading systems implemented by a human are not good enough, especially for me, and that I needed an automated system, and started working on it, even though I lost focus of the backtesting in the process, and implemented an automated system that I couldn't backtest.


    Well, maybe my limited English made me write something unclear. I meant that once I wrote a system on tradestation 2000i, I couldn't manually implement its rules, because I would second-guess it and also I wouldn't have the time to be there at all times.

    An automated system on the other hand solved both problems. Yet the problem was then that I didn't automate the system I had written and tested on tradestation, but for some reasons (I think the system I had built was over-optimized and worthless) I automated an entirely new system, which then was not backtested and also could not be backtested because it was based on the book (bid-ask sizes), and I couldn't find such data. So for a few years I was running an automated system which wasn't backtested, and had very poor results (I broke even).
     
  10. travis

    travis

    I get your point, but that is exactly what I think, so maybe I am sorely mistaken, but by what I read on this forum there are many others - much more knowledgeable than me - who have my same belief. Read Businessman's post below yours for example. Otherwise we all would not be talking about "automated systems" but only about "(semi) automated systems", as you seem to refer to. Then tell the owner of the forum to change the title of this section.
     
    #10     Apr 19, 2009