Automated Systems -any hope? :(((

[initialsBB]

Originally Posted by Pip Trip

You ever wonder why professional stock and futures don't use EA's? (most never hear of an EA). Very simple - you do this as career and watch the computer screen b/c most entries should be with discretion.

Dr. Elder says a plane can fly on auto but human intervention is most important through flight at many times.

One other is very important - forget about mini-account b/c this is just a beginning. Would you leave your house with a $25,000 acct. running on EA that always has chance of developing bug?

What makes you think that professional traders don't use mechanical systems? I know many VIP traders that are experts in EasyLanguage and use computers in some part of the process of development new trading systems. Also, the famous Turtle traders utilized mechanical trading system. Discretionary trading has (also) many drawbacks. Look what SoulTrader writes about watching computer screens 24/5 and discretionary trading:
http://soultraderdiary.blogspot.com/

[WmWaster]

Originally Posted by initialsBB

What makes you think that professional traders don't use mechanical systems? I know many VIP traders that are experts in EasyLanguage and use computers in some part of the process of development new trading systems. Also, the famous Turtle traders utilized mechanical trading system. Discretionary trading has (also) many drawbacks. Look what SoulTrader writes about watching computer screens 24/5 and discretionary trading:
http://soultraderdiary.blogspot.com/

The biggest advantage of mechnical system is the ease of mind.
You can even trade evn if you sleep.

It's tedious to watch at the screen 24/5. No man can do it.
If one can, I'm fairly sure he will die soon. X(

soultraderdiary blog wrote:
We now have a system which we believe (and tests support that belief) will make us multi millionaires in a few short years.

[jlpi]

There is something I don't understand:

- most of the people agree thatto be be successful you have to have a well define strategy that you canwrite downin a plan.
-if the strategy works and if you can describe it, you can code it and trade it automatically.

If automatic trading doesn't work it then means that the strategy is wrong, how can you hope that trading it manually it will be successful?
Maybe it will just require more time to discover that it doesn't work.

[FXGenius]

It is not the strategies that win, it is a trader who wins, you give a brilliant strategy to 2 different traders, both will come up with entirely different results. Trade is not something like 2+2=4. If a computer software could trade successfully, we would have seens lots and lots of them. Frankly, I have seen none so far.

A seasoned trader trades keeping an eye on all the variable that can effect the market. An experienced trader develops a sense of market sentiment, which only comes by watching and live trading for several years and that is something which can not be taught to a computer.

Second, computer based trading also fails as hopelessly as indicator based strategies fail, because almost all of them are based on one kind of indicator or the other.

Third, an experienced trader also keeps an eye on the economic news releases and the outcome of those can never be judged accurately.

I guess, these are some of the factors due to which a CBTS never works. I myself wasted a lots of my early time finding a magic combination of indicators and automating them.

I would be the happiest person on earth, even if I see a CBTS trading markets automatically.

[jlpi]

So, FxGenius, if I would summarize, it means that the only way to get profitable is to succeed to get a "market feeling".

And that doesn't depend on any indicator or price pattern that could be automated, it only deêns onyour experience. So to get it the only way is to spend thousand of hours in front of the screen watching the quotes.
(for the news anyway most of the brokers won't let you trade the news easily as they will loose money on it).

I think that is a revolutionary advice: forget about indicators, patterns, etc... forget about defining a stretegywith TP, SL, etc...
Just sit in front of the computer, watch the price and develop your market sentiment. Maybe after several years in front of the screen you maybecome profitable.

[astro]

Originally Posted by jlpi

I think that is a revolutionary advice: forget about indicators, patterns, etc... forget about defining a stretegywith TP, SL, etc...
Just sit in front of the computer, watch the price and develop your market sentiment. Maybe after several years in front of the screen you maybecome profitable.

That's not what he said.
Your response is of a newbie.
I started demo trading two years ago. I learned all indicators, price formations, fundamentals etc...
I had a long thread here on Moneytec with some guy who was using pivots. He posted lots of examples of his successful trades and explained them. I even had personal correspondence with him (off the forums).
I copied his trading style EXACTLY! By "EXACTLY" I mean even the colors of his MAs!!!
While he was calling successful trades, I kept losing money. His style was very simple: look for breach of pivot points or reverslas at pivot points and trade using variable number of lots depending on the MAs.
Very simple.
Then how come that I blew up TWO (!!!!) $10,000 accounts (demo) in a few months?

I then stopped trading for almost half a year.

When I started over again, I ran into some new strategies and insight of the forex market.
All of the sudden, things started to fit together. Just like a picture made of small bits.
I started demoing again, and I can tell you that I've been trading LIVE now for a few months and I'm not losing money. I actually make more than I lose!

Why? What was so different?
I got some new insight, that's always good. But more important: I had a year and a half of watching the markets! I started to understand what price is doing. I didn't need any indicators. I traded based on price action, not some indicator telling me to buy or sell. I started to get the feeling of what's going on.
I then understood what was the difference between me and the guy who I was in touch with that had great success on trading pivots. I knew why he wasn't entering trades that I did enter and which turned into losses. I knew why sometimes when the MAs told him it's ok to trade, he didn't trade.
In order to have this skill you have to practice A LOT! Understand what price is doing, when are markets ok, when are they crappy. What news are coming and how can they affect the markets.
You can't put that into a computer program. You can't even program the computer to identify high probability profitable double tops or bottoms, since there are so many factors such as how they look, where are they, when did they form etc...
I'm still learning. I'm still trying to understand price action better. That's the only way.
The only way.

It's like a new doctor and an experienced doctor. The former will check his patient "by the book". The latter will also have "gut feelings", intuitions, consider more factors which are not "in the book". The latter will have better diagnosis than the former.
That's how it works in trading.

No shortcuts.

Sorry.

Astro.

[FXGenius]

Originally Posted by astro

That's not what he said.
Your response is of a newbie.
I started demo trading two years ago. I learned all indicators, price formations, fundamentals etc...
I had a long thread here on Moneytec with some guy who was using pivots. He posted lots of examples of his successful trades and explained them. I even had personal correspondence with him (off the forums).
I copied his trading style EXACTLY! By "EXACTLY" I mean even the colors of his MAs!!!
While he was calling successful trades, I kept losing money. His style was very simple: look for breach of pivot points or reverslas at pivot points and trade using variable number of lots depending on the MAs.
Very simple.
Then how come that I blew up TWO (!!!!) $10,000 accounts (demo) in a few months?

I then stopped trading for almost half a year.

When I started over again, I ran into some new strategies and insight of the forex market.
All of the sudden, things started to fit together. Just like a picture made of small bits.
I started demoing again, and I can tell you that I've been trading LIVE now for a few months and I'm not losing money. I actually make more than I lose!

Why? What was so different?
I got some new insight, that's always good. But more important: I had a year and a half of watching the markets! I started to understand what price is doing. I didn't need any indicators. I traded based on price action, not some indicator telling me to buy or sell. I started to get the feeling of what's going on.
I then understood what was the difference between me and the guy who I was in touch with that had great success on trading pivots. I knew why he wasn't entering trades that I did enter and which turned into losses. I knew why sometimes when the MAs told him it's ok to trade, he didn't trade.
In order to have this skill you have to practice A LOT! Understand what price is doing, when are markets ok, when are they crappy. What news are coming and how can they affect the markets.
You can't put that into a computer program. You can't even program the computer to identify high probability profitable double tops or bottoms, since there are so many factors such as how they look, where are they, when did they form etc...
I'm still learning. I'm still trying to understand price action better. That's the only way.
The only way.

It's like a new doctor and an experienced doctor. The former will check his patient "by the book". The latter will also have "gut feelings", intuitions, consider more factors which are not "in the book". The latter will have better diagnosis than the former.
That's how it works in trading.

No shortcuts.

Sorry.

Astro.

Thanks Astro, can not say all that any better. I did not have the words to explain what you said in examples.

Yes, that is exactly what I meant.

[FXGenius]

Originally Posted by jlpi

So, FxGenius, if I would summarize, it means that the only way to get profitable is to succeed to get a "market feeling".

And that doesn't depend on any indicator or price pattern that could be automated, it only deêns onyour experience. So to get it the only way is to spend thousand of hours in front of the screen watching the quotes.
(for the news anyway most of the brokers won't let you trade the news easily as they will loose money on it).

I think that is a revolutionary advice: forget about indicators, patterns, etc... forget about defining a stretegywith TP, SL, etc...
Just sit in front of the computer, watch the price and develop your market sentiment. Maybe after several years in front of the screen you maybecome profitable.

I too used to be that aggressive about automated trading, when I started, but the market humbled me.

Keep searching this forum and you will find good number of threads on automated trading and their outcome. Also, on interbankfx.com website see the difference b/w results of automated and manual trading contest.