DislikedAutomated trading systems and chess programs are programmed to win until someone figures out how to beat them. If I beat a chess program once, it would never beat me again and it will keep losing all the way. You only need to figure out the weakness of the program and that's enough for you.
Automated trading systems are programmed to make money. And since markets change, programs that are making money now are not guaranteed to make the same money tomorrow. They are not even guaranteed to keep what they made yesterday and not lose it.
Of course, I don't mean that human traders are competing against a certain trading program. But it's a whole world full of minds as an automated trading program reflects a human mind after all (The programmer), without emotions. So, it's human minds against human minds.
The edge I am having against trading programs is that I can change strategies whenever I want to change while the trading program can't change strategies unless the programmer changes the code or the program is already built with different strategies for different conditions to be used.
Let me give you a simple example to clarify my point of view (Which is not contradicting yours by the way).
Let's assume that some programmer designed a trading program and introduced it into the market. The program worked very fine for 6 months generating nice profits. And then came another programmer who noticed that prices tend to fall strongly on Fridays when Mondays contains rallies, and found that prices tend to rally strongly on Fridays when Mondays contains sell offs. This programmer decided to program another trading system based on this observation without him knowing that prices tend to do this because another trading system is programmed to sell sharply and take profits on long positions during Fridays opened on Mondays and cover shorts and take profits on short positions during Fridays opened on Mondays.
After programing this system and introducing it into the market, it will distort the results of the original system as both are being built upon each other. In other words, the second trading system is being built upon some actions that are being created through another trading system and this will reduce the efficiency of the first system.
This way, programmers will always keep updating their trading systems and it will go into an endless machine vs machine battle where the best human mind will always win at the end of the day.
You just need to figure out the weakness of your opponent to beat him/her, you don't need to figure out your strength.
Thanks,
NaderIgnored
1. Every trading day is unique, what works one month may not work the next therefore, if you beat the market one month you are no more qualified to beat it the next.
2. You are trading against the collective market, not a single system or computer. There is no one to beat or no code to crack. It's you vs. me, all the dudes here on Forex Factory, all the automated systems, and everyone else, human or otherwise, that execute trades.
3. The maket is always right and doesn't have a weakness. The best you can hope for is to minimize your own.
4. Good automated systems are constantly maintained and adjusted to be consistent with current market conditions. In my experience, automation fails due to one of three things: 1) user eventually decides that he/she is smarter than the system and exits early, 2) user does not perform the required maintenance to stay current, 3) user fails to appreciate the capabilities of the sysetm and loses faith after a couple losses or doesn't take it offline when it does fail since they have no objective way to know that failure has occured.