Why can't automatic robot trade?

[TraderABC]

Hi all.


Why can't the robot that trades successfully be programmed? After all a computer can beat a human at chess... Why can't the same be built for the market?

Thanks....

[socrates]

okay, I give up. Why can't the robot be programmed to trade successfully?

[mahras]

Who said they cant be made? There are quite a few institutions and private traders EXCLUSIVELY trading automated models. However, unlike most its not stress free and "easy". Models need monitoring and the periodical updates to adapt to the changing markets.

I dont think anyone with a very successful blackbox will be releasing it publicly on a website.

[JohnD2]

i'm sure there are some fully automated softwares, but they are not published. Programming the statistical indicators is relatively simple, but writing patern recognition algorithm is not trivial at all.

Instead of spending two years in programming your system to recognize "head and shoulder" pattern (which your brain recognize almost instantly), it is better you spend two years trading, don't you agree ?

The only advantage of automated software is that it is emotions-free. If you have discipline you can follow you own system manually ignoring your feelings.

[jb1220jb]

Thats what i do. I develop a "robot" like this. Started developing it back in 2000.

The problem with an automatic trading system like this executed by a computer is that you also need to control your emoutions not to turn it off.

I have big drawdowns. few times I had to fight myself not to turn it off.

The market does not change a good system never needs to be updated.

[comingback]

Of course they can be, assuming you have a system that makes sense and is not over optimised. We adapt to changing market while machines won't, i think. But then again, what do i know?

[MickMason]

Originally Posted by TraderABC

Hi all.


Why can't the robot that trades successfully be programmed? After all a computer can beat a human at chess... Why can't the same be built for the market?

Thanks....

There are robots trading various markets, just recently the LSE had to ask it's clients to turn them off...

10/07/2005 "These are computer-generated orders created by algorithmic models without any human intervention. They could create difficulties for a firm's systems and problems for the market."

The problems an individual trader would face are devising such a system, finding someone to write it, and then linking it to a broker. Unless it was run on your brokers server there would be all kinds of issues to resolve such as connection failure, requotes, closing an unopened trade, and probably dozens more that I can't think of.

There's no doubt there are systems in operation but would you sleep at night knowing a robot had control of your account

You could always take a look into FXCM's automated trading desk, they'll run and monitor your system and even help you find someone to write it.


Mick

[comingback]

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