=========================== Anony; Well, the highest probability is if you added most all the electric engineers income & got an average earnings. And did the same for traders & investors; you would spend most [or all maybe] of your time with engineering. If you can run that business , that's better. Personaly i like computers to figure/draw my 50 dma/ex moving averages; but i do enough data work by hand, it really doesnt make much difference either way. So computers help,but theyre not the key to Fort KNOX. As far as me being worried about competing with a Lehman or others, or over leveraged car dealers, i simply do not worry about that.David whipped/won with that giant. And the short sellers & long sellers /buyers ,at the end of the day , truth wins.
Anon, Austinp gives some of the most consistent, well-intentioned advice on this forum. I'd heed his advice/input. Here's my opinion . . . Austin's comment about mechanizing systems after an edge is discovered is the only way I've heard/seen anyone be successful. I don't know of/about one person like yourself who found the pot of gold at the end of the rainbow taking the approach you are taking. Law of large numbers suggest that they exist . . . probability suggests that time is better spent elsewhere first (trading is about using smart probabilities to your favor, is it not?). My attempts at mechanizing my trading have pailed in comparison to learning the flow of the markets in real-time. An interesting reference is Dave Cummins with his Tradebot business. He found his edge by going and trading on the floor, then made mega-bucks galore by automating it. I firmly believe tons of screen time and essentially reading tape from a daytrading perspective are about the only ways to eventually find the nuggets you are looking for. How else can you pick up clues about the anticipated market behaviour? 99% of everybody else is looking at the same charts you are. If you continue, the psycological aspect for you to weather through a string of losses will be the biggest driver to make you quit. Your approach has about 100% chance of painful losses occurring at some point. So what's your plan when that happens? Was it expected, or is it an indication that your approach needs to change? Then begins the dizzying chase. Good Luck no matter what. JS
Thanks again. The three systems I've written so far have all been systems identified by the traders I'm working with as potentially profitable strategies. All three have shown to be "maybe" profitable sometimes. However, I'm not sure if the things stopping them from being profitable enough for me to run are: 1. My expectations of profitability may be too high. I think right now that if a system is making me, say, 50 pips per month profit in forward testing then that's too close to unprofitability. I'd like to find something with more buffer between where I am and break-even. I just have no idea what's reasonable. I don't know if people have automated systems out there that are pulling in 2000 pips a month profit, or whether that's just ridiculous. Then of course there's drawdown and predictability to add in there. 2. I need better backtesting and optimization tools. My current testing methodology is extremely tedious and time consuming. My algorithms may very well be fundamentally sound but without the right input data sets I won't have a winning strategy. However with my current set of tools it will take me months and months to get an answer to that. This is why I'm on the verge of writing/acquiring better tools but that in itself is an endeavour that is pointless if there's nothing behind all this. 3. Maybe my systems are no good. I agree about not choosing the optimal settings. My plan was to take several years of data and backtest and walk-forward test through it to see if I can figure out if an input set that backtests profitably and forward tests profitably has any differences in characteristics than an input set that backtests profitably but does not forward test profitably. If option (a) is a backtest that shows 200% profit in a month but a forward test that loses 5%, and option (b) is a backtest that shows 15% profit in a month and a forward test that gains 5%, option (b) is the obvious choice. I just have to figure out if there's a way of statistically differentiating between the two backtests beforehand. I've been given another system by my trading partners that has been shown in backtesting to be consistently profitable over the last 2 years. OK, ranging from mildly profitable to very profitable, depending on the month. In live forward testing it also seems to be working quite well. So my next step will be to automate that, then to thoroughly test it. I'm TRYING to not just shoot around in the dark as a programmer hoping to hit profitability, but instead rely on people who have actual trading experience. Between the two of them they have over 20 years of experience in this market, so even though it hasn't turned either of them into a millionaire, they still have good experience. One last question, and it's sort of personal and maybe impossible to answer. What are people with automated trading systems getting in terms of average monthly or yearly returns? I don't know whether I should be ecstatic to receive 2% per month, or bummed if I don't get at least 20%. I'd start with a small account balance ($1000-5000) and probably risk around 2.5% per trade, +- depending on my calculations of risk for a particular trade. Of course I'd love it if I made millions and millions of dollars, but at least I'd like to see this being worth the effort I put into it vs. just spending more time on my other job. I just want to be more diversified financially, at least. If I get a system that over a couple years is outperforming what I'd expect to get from my other investments, I don't have a problem putting more money into my trading account. I'd just want to see some solid predictability first. Anyway, if anyone has any comments they feel to share about this, either on the forum or via PM, I'd greatly appreciate it. Thanks again, - Andrew.
It seems to me that one can be successful in almost any business by sticking with it, differentiating between sound and unsound advice, following through with customers (where appropriate). I like my job and I'm good at it. But whether I charge $10, $100 or $1000 an hour, my income is fixed. I'd also like to diversify and be less dependent on the economy. Sure I could be putting this effort into other aspects of my career, but for these reasons I'd like to find a "product" that is not dependent on making more money by billing my clients more hours. I'm hoping that by trying to avoid the pitfalls that 90% of unsuccessful traders fall into, and by trying to learn from the 1% of traders who are successful, that I can boost my likelihood of success from <2% up to close to 100% Time will tell I also have to set a reasonable definition of "success".