MoneyTec Traders Community Forum - View Single Post - If Forex is so lucrative then why many people are not interested in this?

vzhig · 25-01-2004, 19:54

I think it's time to clarify some things about computerized trading systems.

PanMarcepan, indeed some of the best humans like Kassparov are better than best computers. However, most other humans who are not professional chess players would loose a chess game to a computer. As most of us here who are not professional Forex traders would trade much worse than a good computerized trading system. So Pete's system doesn't have to trade as a pro who takes into account all the news and stuff and adjusts strategies on the fly. It merely needs to trade better than an average Joe, and if it'll still make profit, it'll be invaluable.

Pete, I don't share your fear for marketmakers profits. Before they'll start to loose their profits professional traders will appear who will trade against your system and will try to fade it. It's known that any profitable system deteriorates when too many people start to trade it. First slippage increases, then guys with deep pockets outsmart and fade system traders. That's why big computer system trading firms like D.E.Shaw, Renaissance Technologies, etc. keep their systems top secret.

For those who are interested, I suggest reading the book "The Predictors". It's about the creation of a successful system trading firm, Prediction Company, which works for UBS. You won't find any info about their trading strategies in it, but would get a feel what it takes to develop a portfolio of good ones. In short, a bunch of PhDs working like crazy for several years. But then, they've created a professional trading system and retired to observe it trade with, probably, millions in their pockets. So, Pan, DeepBlue's of trading are out there, and may be Pete has a hold of one.

Good trading everyone!

25-01-2004, 19:54	#33
vzhig level 1 Join Date: Nov 2003 Posts: 50 Downloads: 0 Uploads: 0 Rep Power: 0	trading systems I think it's time to clarify some things about computerized trading systems. PanMarcepan, indeed some of the best humans like Kassparov are better than best computers. However, most other humans who are not professional chess players would loose a chess game to a computer. As most of us here who are not professional Forex traders would trade much worse than a good computerized trading system. So Pete's system doesn't have to trade as a pro who takes into account all the news and stuff and adjusts strategies on the fly. It merely needs to trade better than an average Joe, and if it'll still make profit, it'll be invaluable. Pete, I don't share your fear for marketmakers profits. Before they'll start to loose their profits professional traders will appear who will trade against your system and will try to fade it. It's known that any profitable system deteriorates when too many people start to trade it. First slippage increases, then guys with deep pockets outsmart and fade system traders. That's why big computer system trading firms like D.E.Shaw, Renaissance Technologies, etc. keep their systems top secret. For those who are interested, I suggest reading the book "The Predictors". It's about the creation of a successful system trading firm, Prediction Company, which works for UBS. You won't find any info about their trading strategies in it, but would get a feel what it takes to develop a portfolio of good ones. In short, a bunch of PhDs working like crazy for several years. But then, they've created a professional trading system and retired to observe it trade with, probably, millions in their pockets. So, Pan, DeepBlue's of trading are out there, and may be Pete has a hold of one. Good trading everyone!