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Advantages of trading automation

  • #1
  • First Post: Mar 15, 2019 1:42am Mar 15, 2019 1:42am
This discussion thread is about advantages of trading robots over manual trading.

I simplified my thesis for you:
1. For any trading you should follow trading plan
2. Such trading plan has to strictly define rules when to enter trade, when to not enter trade, when to exit trade and risk management.
3. Well defined trading plan is a must. Well defined trading plan is executed better by robot in all aspects - precision, speed, timing. Unlike human robot is not affected by emotions, sleeping, thoughts or illness.

Another advantage is diversification. I have built portfolio of trading systems and to diversify risk there are different trading systems, pairs, brokers and trading times. Of course such portfolio has to be traded by robots.

It is also much easier to backtest the robot for last decade compared to manual trading. There is no way you can optimize complex trading system manually.

You opinions are welcome.

Tomas
I like what I trade, I trade what I like
  • #2
  • Mar 15, 2019 3:50am Mar 15, 2019 3:50am
Quoting togr
This discussion thread is about advantages of trading robots over manual trading. I simplified my thesis for you: 1. For any trading you should follow trading plan 2. Such trading plan has to strictly define rules when to enter trade, when to not enter trade, when to exit trade and risk management. 3. Well defined trading plan is a must. Well defined trading plan is executed better by robot in all aspects - precision, speed, timing. Unlike human robot is not affected by emotions, sleeping, thoughts or illness. Another advantage is diversification....
Your TE is quite good. Not many have almost half year TEs alive
Try don't lose pants never...
  • #3
  • Mar 15, 2019 3:51am Mar 15, 2019 3:51am
Quoting togr
This discussion thread is about advantages of trading robots over manual trading. I simplified my thesis for you: 1. For any trading you should follow trading plan 2. Such trading plan has to strictly define rules when to enter trade, when to not enter trade, when to exit trade and risk management. 3. Well defined trading plan is a must. Well defined trading plan is executed better by robot in all aspects - precision, speed, timing. Unlike human robot is not affected by emotions, sleeping, thoughts or illness. Another advantage is diversification....
I agree with many of your conclusions...
Try don't lose pants never...
  • #4
  • Mar 15, 2019 1:53pm Mar 15, 2019 1:53pm
Most of the manual trading systems are not able to trade with EA. In the decison is your brain always there. I tried to code a lot of manual systems, and are not really effective. for example how do you program it?
-I dont exit now, the price have break an important Supply/Demand.
-I dont trade, since days is the market choppy.
And there are lot of little decisions that make a manual trading succesfull, and not really possible to code. You can not make exceptions for each market movement. As a manula system, the EA need simple clear rules. But you get it with many testing and development.
You have a basic idea (can depend on manual trading rules).
You try to add or remove some indicators.
Try to find some rules, they can reduce loss and add to profit.
Try different scaling in/out, different openings buys/sells, with different money management.
Try different trading time, timeframe pairs.
Make many test with different settings to see how robust is your EA. Work it with only 1-2 settings or make profit less or more with the most settings?

And wath you get is way different wath the manual trading idea was.
  • #5
  • Mar 15, 2019 2:00pm Mar 15, 2019 2:00pm
The optimisation is a important point. If you optimise 8-10 parameters at the same time , I am not shure your EA will make big profit, and you will not see the strong and weak point of your strategy.
I make always partly optimisation.
for example:
At first try to catch the right trend settings.
Next is the setup.
Try to add some position management.
Add some extra rules.

If the EA dont work with basic settings(trend, setups), I dont try to fine it with rulse, then the EA is worthless for me.
  • #6
  • Mar 15, 2019 5:34pm Mar 15, 2019 5:34pm
As good as they are, we should not forget to mention their disadvantages. They can be very expensive and most at times difficult to maintain.
  • #7
  • Mar 18, 2019 1:52am Mar 18, 2019 1:52am
Quoting braintheboss
{quote} Your TE is quite good. Not many have almost half year TEs alive
Thanks!

I have actually much older trading systems running on live accounts
I like what I trade, I trade what I like
  • #8
  • Mar 18, 2019 1:54am Mar 18, 2019 1:54am
Quoting Beertje
Most of the manual trading systems are not able to trade with EA. In the decison is your brain always there. I tried to code a lot of manual systems, and are not really effective. for example how do you program it? -I dont exit now, the price have break an important Supply/Demand. -I dont trade, since days is the market choppy. And there are lot of little decisions that make a manual trading succesfull, and not really possible to code. You can not make exceptions for each market movement. As a manula system, the EA need simple clear rules. But you...

Well you should have well defined trading plan.
Based on such plan you will not get into situation like I do not exit now.
With well defined trading plan you know when to exit. If you know when to exit it can be coded.
-I dont exit now, the price have break an important Supply/Demand.
I like what I trade, I trade what I like
  • #9
  • Mar 18, 2019 1:55am Mar 18, 2019 1:55am
Quoting Bryn23
As good as they are, we should not forget to mention their disadvantages. They can be very expensive and most at times difficult to maintain.
When optimizing the EA it is important to split data to the part you optimize for
and keep the rest of your data for testing.
E.G. optimize years 2021-2016 and test the outcome on years 2017-19
I like what I trade, I trade what I like
  • #10
  • Mar 18, 2019 1:58am Mar 18, 2019 1:58am
Quoting Bryn23
As good as they are, we should not forget to mention their disadvantages. They can be very expensive and most at times difficult to maintain.
Nope. I am not talking about buying some miraculous EA on the market. That could be expensive.
What I am talking about is simply converting your manul trading plan to EA. This is not expensive.
It is difficult to manually trade one or more accounts every day, it is much cheaper and more efficient to do so by EA
I like what I trade, I trade what I like
  • #11
  • Mar 18, 2019 6:11pm Mar 18, 2019 6:11pm
Quoting togr
{quote} Well you should have well defined trading plan. Based on such plan you will not get into situation like I do not exit now. With well defined trading plan you know when to exit. If you know when to exit it can be coded. -I dont exit now, the price have break an important Supply/Demand.
What will go wrong if you do it manually, I haven't gotten a straight answer to the thread's title?
  • #12
  • Mar 19, 2019 7:03am Mar 19, 2019 7:03am
Quoting Bryn23
{quote} What will go wrong if you do it manually, I haven't gotten a straight answer to the thread's title?
If you trade manually you lose advantages of robot trading
Advantages of robot's trading are described at the top.
I like what I trade, I trade what I like
  • #13
  • Mar 22, 2019 7:40am Mar 22, 2019 7:40am
Quoting braintheboss
{quote} Your TE is quite good. Not many have almost half year TEs alive
My EA made 12.8% profit today.
That is exceptional as well as the move of currency was.
I like what I trade, I trade what I like
  • #14
  • Mar 22, 2019 5:11pm Mar 22, 2019 5:11pm
Nobody has talked about the cost of maintenance and upgrading EA's.
  • #15
  • Mar 25, 2019 1:19pm Mar 25, 2019 1:19pm
Quoting Bryn23
Nobody has talked about the cost of maintenance and upgrading EA's.
In anyway it is cheaper invest into that and get profitable system trading trading 24/5
compared to buying some promoted sh@t and pay for unpredictable results
I like what I trade, I trade what I like
  • #16
  • Mar 25, 2019 2:59pm Mar 25, 2019 2:59pm
hey, even though I don't trust straight balance curves I totally agree with your points.

what you expect.. many think trading is gambling.. others think its an art form and have no rules. THAT'S FINE bcause it's a zero sum game afterall

yes it seems everyone here ignore serious / half serious system automation, except a user called Copernicus and me.. so forget trading forums unltess you want to talk about music and fancy cars.
  • #17
  • Edited 8:53am Mar 26, 2019 6:59am | Edited 8:53am
Quoting HeyYou
hey, even though I don't trust straight balance curves I totally agree with your points. what you expect.. many think trading is gambling.. others think its an art form and have no rules. THAT'S FINE bcause it's a zero sum game afterall yes it seems everyone here ignore serious / half serious system automation, except a user called Copernicus and me.. so forget trading forums unltess you want to talk about music and fancy cars.
I think it is better to have automated strategy which provides stable results during 10 years of backtesting and live testing
than spending all your time in front of monitor to spot the patterns
I like what I trade, I trade what I like
  • #18
  • Mar 26, 2019 8:42am Mar 26, 2019 8:42am
Major market moves/changes in direction happen when big (red) news events occur. I believe in automation for all the reasons you listed. However, I have to manually turn off my strategies whenever big news events happen (batten down the hatches). I turn them back on after the effects of the events have passed. Even if you knew what the news would be, you will never know how the market will react. This is the only big issue I have with auto trading.
  • #19
  • Mar 26, 2019 8:54am Mar 26, 2019 8:54am
Quoting MasterElf1
Major market moves/changes in direction happen when big (red) news events occur. I believe in automation for all the reasons you listed. However, I have to manually turn off my strategies whenever big news events happen (batten down the hatches). I turn them back on after the effects of the events have passed. Even if you knew what the news would be, you will never know how the market will react. This is the only big issue I have with auto trading.
Well yes I have very similar experience. EAs work for the technical part of the trading but fundamental analysis is till done by me.
I like what I trade, I trade what I like
  • #20
  • Mar 26, 2019 1:49pm Mar 26, 2019 1:49pm
Quoting togr
{quote} I think it is better to have automated strategy which provides stable results during 10 years of backtesting and live testing than spending all your time in front of monitor to spot the patterns

Oh yeah I got sick of that after a couple hours.

I know few systems that have potentials IMO and cannot be automated.. but since I have no time and NERVES for that stuff ... if I can't backtest it in the long term (10 years AT LEAST, as you suggest)... I don't touch it!
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