And how exactly does this impact my performance? "Quant" doesn't mean you have a license to print money. Plenty of hacks everywhere.
So what are the problems you encounter? Speed disadvantage? Money management mistakes? Too many losing trades? Entry or exit problems?
doggfx, Good question. The problem I encounter with back testing trading strategies /ideas from +5 past historical (I normally back test from 2011 to present) 1. Total losses is big negative year after year. 2. I can't find a trading strategy I can think of that is results in profitability. I tried about 10 trading strategies so far and all of them is negative $$ year after year. The bottom line nothing is working or showing me positive expectation. I test strategy on all time frames 1 min up to daily. I guess I keep on trying. Thanks,
In my simple opinion. Quant, slump, HFT, blah blah blah blah blah trading style is all BS and marketing. I just want to program something that has proven to make money in the past, then put real money to it. I don't care what the quants OR anyone else is doing unless they give me their trading strategy so I can make money with it. I think us traders worry to much about what other traders are doing and not focus on the bottom line: making consistence money with proven trading methods.
Do you trade live or just search for strategies on past data? From what I understand and my limited experience is that Trading is a skill based activity. You need to practice to become good. Is it not a waste of time to just be stuck on demo for years?
One of the problems of automated back testing or automated trading for example is that it usually does not take into account non technical market conditions. For example during the run did it trade during a FOMC decision that caused losses due to market volatility. Most manual traders would stand aside during those times. Computers do not know how to. Also humans can change techniques for various market conditions such as sideways markets vs trending markets. Most programs can not do this without human intervention.
_eug_, I have traded real money before and lost most of it cause I did not know what I was doing. That was my practice. HECK NOOOO "Is it not a waste of time to just be stuck on demo for years?" I will stay in DEMO mode searching for profitable trading strategies until my hands fall off before I risk my hard working cash flow doing something where I don't have the odds of winning. Trading is Business and I treat it as a business. I am not risking my money if I don't have proof that over time I may make alot of money. I will stay in paper money, markets not going nowhere. Right now my trading cost are $0 and I program and back test strategies for free.
Once you find the holy grail, will you be executing manually or through algo? If manually, you still will have to put in the time and losses to get the execution and psychology down. Is it possible that by the time you get those down your found edge maybe gone already?