Robotics Determined Strategy

Recently there are a few EAs claiming to be able to read the market and fire off the right strategy according to the market condition. It started off with one pioneering EA and the rest followed but so far only one is working well.

Based on these concepts, certain changes may be seen. Instead of looking at the risk/reward of individual trades, perhaps it will be much better if the risk/reward of each strategies are obtained. If the profit probabilities of each strategy are known, the market condition where they work best can be studied (This is where this discussion comes in). So brainstorming before the start of each trading day may be able to forecast the type of market and the right strategies can be fired. For example, different set of strategies for anticipated breakouts, near support/resistance, pre news, trend, panic and so on. With time, this art of 'forecasting the market type' can be further developed and determine the best strategies.

An interesting topic, I have seen the glitzy advertising on all these new robots claiming ludicrous results which are generally as a result of curve fit over optimized algorythms. I always keep my mind open to new stuff, but when I see the same marketing hype and styles applied to these new robots I do tend to just dismiss them as, for want of a better word, pure crap!

Anyway, on to the subject at hand. I would absolutely agree that trading is about using an arsenal of techniques and choosing the correct techniques to suit the market. The problem there lies, identifying the type of market you are in.

Trending, range bound, or just plain all over the shop. The traders which are predominantly making a regular income from trading have learned through thousands of hours of watching the markets what type of market they are in - this does clearly differentiate them between the winners and the losers. Identifying your market is key, the general problem is, nobody, including robots, have thus far identified how to do this well. The human brain is a marvelous thing, I personally believe we will never be able to design a robot to trade like a pro.

When proper Artificial Inteligence (AI) comes to computers the whole trading scene will again change - markets will adapt to make those robots no longer work, it is an inevitable fact. You cannot have only winners in a market, there has always got to be someone on the other side losing. There may be a brief window of opportinity when robots will make a killing, but the human will always outmanouvre the robot and the robots will very quickly be destined for the scrap heap. Either the humans shall win or the robots shall win, if the robots win then you are still back to square one - there will be winning robots and losing robots and it will yet again become a game of trying to find the best one. The winner will again be the human choosing and controlling the robot - there can only be one winner and that is the human -

So, stay away from those robots and learn to trade - this is the safest and best way forward! Sorry, got carried away.

Ok, to summarize, I cannot add value to this thread in terms of how the hell I decide what market I am in and then convert that into s/w, I just look at charts and "generally" know what the market is doing - this is enough to give me an edge, so long as I mechanically execute that edge I know I will be ok.

All over the place we have techniques thoroughly defined, down to a clear algorythm, trade breakouts, S&R, getting in on a trend, news trading ....... and on and on and on ....... So, we have the techniques, now which one do we use for the current market?

.... Im buggered if i can define how I know, I just know more often than I don't know, and that is all I know.

Forgot to mention the other VERY important thing I know, which is, if I don't know then I stay out of the market. Knowing when not to trade is something you learn, don't ask me how I know!

Sorry, I'm just having some fun whilst waiting for some of my trades to come to a close, shame on me I'm using a robot to do this for me - but then I personally told the robot to stay in the trend, yes, I use it as a tool and nothing more.

If you invite traders to brainstorm what is happening for the day then you will get a whole set of different answers, how do you then asses which is good and which is bad? I make my decisions during the day, I have a vague plan to start with but as prices move around I make new decissions.

I fear nobody has posted to this thread because it really is one which can go nowhere. Although worthy of much thought and a very interesting one at that, I think this may be more for phylosophers than for traders.

To sum up: If we were able to define what strategy to apply in a timely fashion to the market then we would have produced something worth billions of $$$. We will have achieved what all those huge institutions with their armies of intellectuals failed to achieve, and all on a humble Forex Factory thread.

Happy to join and philosophise in this thread, I'll wait for some more posts before I try to add more value.