I have an idea of what is going on and how I am being gamed by the market, but I haven't put together a good solution yet. Lot of intense research the past few weeks. I'm wondering if the guy who wrote the article just hates the low points, where the PnL starts drying up and the solution isn't an obvious fix.
"Every time I teamed up with a trader in an automated trading venture, their trading strategies and ideas ended up not working despite the fact that they had been previously successful (often remarkably successful) as either floor or screen traders." ----- Perhaps the strategies didn't lend themselves very well to being automated.
Great, so now we have two data points. He's incompetent for penning that blog entry and you're a fool for not figuring that out before posting his drivel here.
I've been writing code in C++ for about 15 years and I have to agree with just about everything you've said, especially point #6. It's been my experience that programming trading apps are better served as trading aids rather than trading bots. One of my most valuable apps is a tool that measures volatility that is based in part on ATR. It's highly reliable at signaling trend vs non-trend days. I've played with writing pure algo trading apps and I've never been able to come close to what the human brain can interpret. Trading is an art and writing code is a science although writing code does require some creativity so arguably there is an element of art in writing code. Point #3. Beating the market shouldn't be a goal as much as trading profitably should. I've beat the market by a wide margin in some years and trailed the market in others. The key is to try and beat the market over a long period of time. Doing it every year consistently is extemely difficult.
Sharpen your tools. Everyones edge dies when the market conditions change. There are really only two types of markets -- volatile and non-volatile. They require 2 radically different strategies. Measuring volatility should be at the top of your list.
Never give up. That's the best advice anyone can give you and I wish someone told me that when I was younger. So here you go, I'm telling you right now to never give up because there wasn't someone there to tell me to never give up. You can do it.
Never give up and find a way to adapt to changing market conditions. The reason traders lose their edge is because the market conditions change and the trader sticks with the same strategy that will no longer work. The transition from 2008 to 2009 is a perfect example. We went from a high volatility, high intra-day range to a low volatility, low intra-day range. Scaling in and out in a volatile market is a viable strategy. Not so in a non-volatile market. Get caught scaling on the wrong side of a trend and you're up the creek.