With manual trading all one needs is charts, money, broker and the urge to place a trade. Can happen very quickly. With algo trading one may need to spend weeks or months to write your program before you can trade. Longer if you don't know how to formulate it. But the time spent writing a program is not wasted time, it's preperation time. I've been coding for numerous years, just completed a new system and it took 16 attempts to get it written and nearly 3 months mostly full time including weekends. Been my biggest coding job yet, was extremely difficult. Yet the system itself is a very simple concept.
What does this specifically mean, i.e., an edge over algos? And further, is "an edge over algos" needed for a manual trader to trade profitably? As long as a trader can buy low and sell high or vice versa isn't that all that matters? Could be a myriad of reasons for that ranging from not being able to trade profitably manually to not wanting to have to trade manually and so on. Further, you're assuming that just because someone spend months trying to create an algo it will give them an advantage. Rest assured there's plenty who spent years trying to create an algo and ended up failing massively. Yes, but you may be comparing apples and oranges. A calculator will of course always be faster than a human. But the calculator is only performing an operation/output where the human defined the problem and typed in the input. An algorithm will only perform based on the rules you as a human created. The question then is if it's possible to fully automate a good discretionary / semi-discretionary system and cover all bases/angles that an experienced human trader can? I think it's possible, but I'm sure it's very hard. I don't claim to have a fantastic system, but I've automated everything that can be automated, i.e., data collection, computing statistics, creating reports, basic indicators and so on. But at the end of the day I trade discretionary based on the above and my experience using this. I think it would be very hard to automate everything, but it's certainly an end point I may have in mind at some point.
Lots of questions and it would take a while to answer as we enter the rabbit holes. In summary my reply is all traders think differently. For some math is not for them. Some of us are visual, others analytical. Some enjoy reading and studying, others prefer being stimulated by other sources. But If we think of some of the large whale traders, I'm guessing they don't trade off visual charts manually. There are better ways of harvesting a crop with machines than manual labor, but there's always exceptions.
Well, I was questioning your statement where you said you fail to see how a manual trader can have an edge over algos. My point was that you may be comparing apples and oranges. All things equal a computer will always be faster than a human and perform the same way every single day without emotion. So, HFT trading or arbitrage, human versus computer, isn't even a comparison worth doing. However, a complex and discretionary system may not easily be translated into code. As such, my answer/take is that this is where a manual trader may have an advantage over an algorithm.
It's make the conversation difficult, when you say will continue to disagree, but basically agree with majority of what I said. There's no doubt most people can't be disciplined, that's why so many people fail and why bots / algo's can be very good. It doesn't change the fact that not many people succeed in retail with either one and it also doesn't change the fact that there are traders who are that disciplined. So the point still stands all things being equal, at the highest level of retail a manual trader will generally beat a bot/algo. The thing is as tough as it is to be disciplined, it's equally tough to code a bot well enough to be long term profitable. Basically what Laissez Faire is saying. A mix of manual intervention and automation I think can work wonders as a middle ground as well.
I would say rules-based. Because it is easier to analyze past trades. Simple question: did I follow the rules or not? Easier to backtest than going with intuition I believe...
Agree with the above. Of course, the devil is in the details - deeper understanding of the points listed
Hard edge is when you scalp context and understand when context strat to switch. When Yin start to be Yang and when Yang start become Ying.