The infamous "Blackbox" Theory

Discussion in 'Strategy Development' started by aphexcoil, Sep 4, 2002.

  1. I wanted to start a new thread from the discussion currently taking place in "Scalping e-minis."

    Let's talk about the "Blackbox." This box is a fully developed system that automatically removes all emotion and decision making from trading the futures. This blackbox, in its very simple or complex design, chews out ES points at a rate of between .50 points positive a day (after commissions) to +10 ES points a day.

    Now, does such a blackbox exist -- or could such a blackbox EVER exist.

    Let us assume that there are ten's of thousands of systems working together to move the market -- yet, you can look at any chart after the fact and say, "Ahh yes, I see the trend easily!" Well, if we can so easily ascertain that trends are present after the fact, why can't we more easily trade them without wondering whether this move is good for only 2 points or 20?

    Does this blackbox exist, who has it, and how complicated would such a blackbox need to be in order to at least turn a .50 point profit per day after commissions.

    Please, let's keep it friendly -- no bashing or name calling. Let's just talk about the "blackbox."

  2. tntneo

    tntneo Moderator

    what gives blackbox systems a bad name are stupid ads in stocks * commodities and other magazines.

    purely automated trading is possible with consistent gains on ES and NQ (I find NQ more nerve wrecking, but that's just my opinion).

    but no one has to be so strict about it, it's possible to mix generated signals and discretionnary trading. just a hint...

    Back to WarEagle's comment : maybe it is pointless (hehe!) to target 1 point scalps, at least in a systematic way.
    Just like him, we never succeeded in that way. I would not say it's not possible. But obviously there are many easier ways to trade this.

  3. aphex, it seems to me you're mis-defining blackbox. Blackbox is when one just takes the signals without knowing the underlying logic of the system. It seems to me what you're talking about is a fully mechanical trading system.
  4. He's got 152 posts in since 8-19-02. Must have automated "blackbox" ET posting software.
  5. max401,

    It is the same thing as with MISC.INVEST.STOCKS -- I might as well make a name for myself before I get interviewed for the 4'th edition of Market Wizards.

  6. traderkay,

    I guess what I mean is a program you click "run" come back 8 hours later and see you're up 10 points for the day. Whatever that is called is what I am talking about.

  7. i can just imagine the touting going on there.
  8. tntneo

    tntneo Moderator

    stick to subject or go to another forum.

    member's status is driven by number of posts, not what is written.
    but language abuse won't be accepted in this forum, I don't care who.
  9. tntneo

    tntneo Moderator

    yes, usually a black box is a mechanical system one does not know the inside logic in details (general strategy may be public).
  10. artguy

    artguy Guest

    Maybe aphex is talking about a bleached blonde doing a handstand
    #10     Sep 5, 2002