What it takes to develop a profitable trading system?

Discussion in 'Options' started by Aquarians, Dec 28, 2017.

  1. rb7


    I don't know if I'll get a commission from that once you'll become profitable and willing to pay back Charles ;).
    #31     Dec 28, 2017
    MACD likes this.
  2. fan27


    Your current problem is the exact problem I am aim to solve which is to drastically reduce the time it takes to find profitable trading strategies. I am going to have a very beta version of my Quant Machine Learning SDK available at the end of January. No need to have in depth data science knowledge. Just need to be able to write a little C# code. I'll send you copy.
    #32     Dec 28, 2017
  3. qxr1011


    man, i am not a subject of this thread
    #33     Dec 28, 2017
  4. @fan27, OK, I'm looking forward.

    Although, lemme express my reserves about these trading systems where you don't need to know nothing, there's a button there labeled "Make Money!", you just need to press it.

    Programmers especially seem to have a fascination about these systems where you don't have to know programming to program, don't have to learn to trade in order to trade and don't have to understand science to be a scientist.

    Knowing things is so last century. Now you too can get a 6 figure paying job. And when you get a problem, just ask Siri:
    [ A Millennial Job Interview ]
    Last edited: Dec 28, 2017
    #34     Dec 28, 2017
    fan27 likes this.
  5. qxr1011


    only when its not their money on stake...otherwise the fascination evaporates very soon
    #35     Dec 28, 2017
  6. fan27


    I totally agree. It does not use deep learning where it spits out some Algo you could not possibly have any confidence in. It basically wraps user defined indicators, price data in classes and interfaces that can then be used to construct strategies on the fly. You tell it the "strategy components" you are interested in and it can test all possible combinations extremely fast at a rate of 1000 strategies per second. All will be clear when you see the SDK and code samples.
    Last edited: Dec 28, 2017
    #36     Dec 28, 2017
  7. Hey, easy! Someone needs to make sure your trades from 2PM feed downstream at 8-9PM while you're four beers deep at he bar...

    In all seriousness I think theres levels to how relegated you are in a support function. Being on the floor has taught me a lot in a short period of time. Only rarely do I really feel like a peasant and in general I think the business is pretty appreciative and 100% willing to teach. It would be a tough ask for them to tell me to code something and not teach me exactly what it is they want, right?

    Again, levels. I'd be living at my parents house playing xbox if they told me my job would be downstream settling trades or something. To be honest, I think keeping feed handlers running and learning about the right way to write trading infrastructure is really cool. I see it as valuable in terms of exit opps too. How many firms do you know that have this sort of infra? Pretty much every principal trading outfit I imagine.

    I think I'm junior enough that there's still plenty of value in this sort of role (tell me now if I'm wrong though)! There's really very few tasks I'm asked to do where I question the educational value. Now of course I'm not sure I'll be doing this when I'm forty but I'm also not sure that's anyone's expectation.
    #37     Dec 28, 2017
    kellys and sle like this.
  8. Stdray


    First develop a trading system catering your trading needs (trade stocks, forex, futures, options). Then, experiment with tons of trading strategy to see which one generates the maximum profit. And that's about it.
    #38     Dec 29, 2017
  9. Sprout


    Here’s a start -

    Price is the dependent variable of the independent variable volume.

    The market’s system of operation follows a sequence of events.

    The sequence of events unfolds in a fractal branching pattern.

    The basic grandularity of the market’s price action is a finite permutation of 10 unique price cases and 11 volume elements. These combine to create 56 posssible unique price and volume combinations.

    The market is fractal with symmetry. The basic pattern is composed of two interlocking yet opposite price trends.

    The beginning of the next trend is contained within the present trend. The present trend began in the prior trend.

    Trends are composed of at least three alternating trend segments.

    This can be coupled to the three moves of a trend.

    A trend begins with coherent price direction with increasing volume - this is known as Dominance. The next segment is a non- Dominant retrace of price with decreasing volume. The third segment is a return to Dominance with increasing volume.

    This pattern can be observed in a single bar or clusters of bars contained within each segment.

    Trends can be interrupted or progress to completion.

    The market operates in an orderly manner to provide opportunity to fulfill the needs of all market participants. We know this because all participation is voluntary.

    There is no noise, anomalies nor flaws in the market’s system of operation.

    Many would refute the above collection of statements as not true which points to the math most appropriate to understand market dynamics, participant sentiment and orderflow.

    The math of the markets operate on Boolean algebra with a bias toward negative logic.

    In other words, one can know a thing by knowing what it is not.

    All the above are observable and definable concepts with the ability to be tested as a True or False condition.

    Testing follows the form; If,... then,...

    Solutions exists outside the domains of the problem and require a different perspective to be perceivable.

    What separates the two is the engagement of purposeful learning through work

    Two broad classification of traders would be the informed and the un-informed. Another is the profitable and un-profitable.

    Two polar extremes are defined - the informed and profitable engage the un-informed and un-profitable whenever the former wants to trade. The former only trades when it’s profitable, they are aware of fundamental values that the latter is not. Their trading is informative. The latter being un-profitable engages in trades when prices are not informative, thereby being un-informed.

    Fundamental values are not well-known, if they were there would be no profitable trades since everyone would know the fundamental fair value.

    Fair value and market value are not the same.

    Last edited: Dec 29, 2017
    #39     Dec 29, 2017
    Simples likes this.
  10. It might sound ol' fashioned and too simple to you, but have you considered just learning to read the trend? You'd be surprised how everything falls into place once you can.
    #40     Dec 29, 2017