update on trading robots

[nalgrim]

Just a little update on automatic trading robot systems:

There's been a lot of interest on the trading robots and I was wondering if I could get some feedback on what features/indicators would be the most important to implement.

What kind of formulaic indicator combinations or algorithms could you use to generate fairly accurate signals?

I'm thinking more and more that any automatic trading robot should have some level of trader involvement. This could separate trending markets from ranging ones and use the 'eye' advantage that humans have (at least now) over computers.

What do you think?

Andrew

[Marty]

I think you already have it.

what I mean is that you have black box trading systems that generate signals, however I know for a fact that for certain managers their most important tool is the good old screwdriver to "tweak" the system when need be.

[nalgrim]

I think most traders in fact like things they can tweak and develop...that's sort of part of the nature of trading, in a way. Always improving and learning....

Right now the black box system works quite well, but I don't put up 'trade histories' or hard numbers because any system used by different traders will come out with different results realistically. Also, my current black box system (FXSignal), while it has a good data feed and is quite fast at generating signals, doesn't automatically place trades.

What I'm looking to do is make a semi-automatic system that the trader only need check every 1 or 2 days. He can apply various filters depending on market conditions/fundamentals, etc. I'll be able to get most of the major indicators installed in this program as I've found a component library on the net that supports everything from Parabolic SAR to neural nets and Japanese candlestick formations. I'll make the system customizable and flexible so the trader can trade any combination of the indicators and maybe I'll even implement a few indicators of my own.

One idea I have is integrating genetic algorithms with an automatic trading system. If you're not familiar with this technique, it's basically a form of AI and you can get more information through Google... I think genetic algorithms would be an excellent filter in deciding on different types or stages of markets. Then, different indicators that work best in various types of markets could be implemented, thus increasing profitability and reducing risk.

The program will be run on the trader's computer and integrate with various brokers.

What I'm still looking for is a few ideas of how indicators could be used in an automatic way. Let's see if we can start a lively discussion here about what indicators could be used programmatically and what kinds of setups or types of markets they'd work best in...

Thanks

Andrew


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