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Forex Trader Job Description 1 reply

A trader's job

  • #1
  • First Post: Jan 5, 2006 2:21am Jan 5, 2006 2:21am
After commenting on others threads for a while, I thought I should finally start my own.

I am a 100% mechanical system trader. I see my role as a trader to simply follow my trading system. If I follow my system and take a loss, then I pat myself on the back because I have done my job well. If I don't follow my system and make a profit, then I curse myself for doing a poor job. As a trader, I don't see myself responsible for the outcome of the trade - I can't control the outcome of the trade - the only thing I can control is sticking to the system.

Now, I am also a system developer. This is a completely different role to being a trader. I might spend a lot of time developing a system, I then pass this on to myself in the role of a system analyser - I personally think this is where my particular strength is. Once I have analysed the system, and I am happy with it, I pass it on to myself in the role of trader - the first thing I need to work out is how to implement the system to ensure that it is traded the way the designer intended - if I can't do this, then I won't produce the results that the analyser has told me should be produced. Then I simply follow the system.

So, my role is split into 3 different parts:

1. System development.
2. System analysis.
3. Trader.

By splitting my role into several parts means that I have more flexibility in what I can trade. Many people will say that you can only ever be successful trading a system that you design and develop yourself - I say that is a load of crap! Someone else can design a system for me and if it passes my analysis stage and I can implement it as it was originally intended to be traded (ie the same as it was backtested) then I can trade it.

Of the above 3 roles I play, I by far spend the most time on development and it is by far the hardest part.

Comments?

Simon
  • #2
  • Jan 5, 2006 3:21am Jan 5, 2006 3:21am
Yes.. I have a comment.. A very good post I say..
And you're perfectly right, you can be successful by using other's system, but the requirements are:
1) It is a profitable system
2) And most importantly, you trade it the way that it should be traded <- Can't put enough emphasis here...
  • #3
  • Jan 5, 2006 3:46am Jan 5, 2006 3:46am
Though I basically agree with you, you do ask for comments, and I have two (or rather questions):

1) What are your results? I'd love to know what results you are making with that attitude. (It's the correct attitude, but it'll help you little if you only lose by following it <G>)
2) Would you share your system(s)? If they're profitable, I am sure many would be interested...

Good luck trading!
  • #4
  • Jan 5, 2006 10:09am Jan 5, 2006 10:09am
the development phase is a hard one, I agree. But it occurs to me that it is getting easier and easier with time.

The biggest problem I see is: putting the right amount of time in the three different phases. I really would like to develop quick and easy, but here are still the problems.

regards,
qweet
  • #5
  • Jan 5, 2006 12:55pm Jan 5, 2006 12:55pm
Quoting qweet
the development phase is a hard one, I agree. But it occurs to me that it is getting easier and easier with time.

The biggest problem I see is: putting the right amount of time in the three different phases. I really would like to develop quick and easy, but here are still the problems.

regards,
qweet
There is no quick
There is no easy
There is only long
There is only hard

Go forth and trade and be hapy my young grasshoppers
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #6
  • Jan 5, 2006 6:53pm Jan 5, 2006 6:53pm
WOW! Never thought of it exactly that way. I was reading your original post, and it definitely struck a chord, I recognized myself immediately, glad to see I'm not alone.

I am curious since you have obviously been doing this for a while , which software do you use. I am currently using Omega 2000i. Also, I am currently coding a couple of systems and wondering if other developers hard code money management into their systems before handing it to the {{ trader }}.

Or do you prefer giving it to the{{ analyzer }}seeing a win loss ratio or profit factor before beginning money management strategies.

I would enjoy reading your thoughts on this.
A truly wise man, always has more questions than answers.
  • #7
  • Jan 5, 2006 7:34pm Jan 5, 2006 7:34pm
I am also a believer in mechanical systems. I find that the trader part of the equation is the hardest part. The fear/greed factor occurs much too frequently in my trading and as a result I sometimes override my system. Invariably, when I do this I will underperform my system. I do best when I walk away and let the automated stop loss and take profits do their job.
  • #8
  • Jan 5, 2006 9:53pm Jan 5, 2006 9:53pm
Very interesting!

Someone once said to me that there are a million systems out there and they all work. It's when we screw them up that they fail.

For me, the most important thing to believe in is me. When I am in that 'zone' my system works 100%.
The framework is there; we just have to work on our frame of mind.
  • #9
  • Jan 6, 2006 5:48am Jan 6, 2006 5:48am
Quoting Claude
WOW! Never thought of it exactly that way. I was reading your original post, and it definitely struck a chord, I recognized myself immediately, glad to see I'm not alone.

I am curious since you have obviously been doing this for a while , which software do you use. I am currently using Omega 2000i. Also, I am currently coding a couple of systems and wondering if other developers hard code money management into their systems before handing it to the {{ trader }}.

Or do you prefer giving it to the{{ analyzer }}seeing a win loss ratio or profit factor before beginning money management strategies.

I would enjoy reading your thoughts on this.

Claude,

I am using Wealth-Lab Developer (www.wealth-lab.com) with data from dataHQ (www.forex.datahq.com) (I am affiliated with dataHQ and get my data for free). I tend to not code the money management in the systems - this is the job of the system analyser and once the MM is sorted out, it goes back to the programmer to hard code the MM. This way, the trader is told exactly how many contracts to buy/sell when they are placing trades.

Simon
  • #10
  • Jan 6, 2006 5:49am Jan 6, 2006 5:49am
Quoting malagiri
I am also a believer in mechanical systems. I find that the trader part of the equation is the hardest part. The fear/greed factor occurs much too frequently in my trading and as a result I sometimes override my system. Invariably, when I do this I will underperform my system. I do best when I walk away and let the automated stop loss and take profits do their job.
I hope that you lose money every time that you overide your system so that you will learn quicker that your shouldn't be doing it. This was you will associate pain with overiding your system. You already know this though.

Simon
  • #11
  • Jan 6, 2006 5:51am Jan 6, 2006 5:51am
Quoting niceguy777
Very interesting!

Someone once said to me that there are a million systems out there and they all work. It's when we screw them up that they fail.
.
I don't believe that at all. I don't think there are many mechanical systems that work. Any time I test a system that is posted or out of a book, they don't work.

Simon
  • #12
  • Jan 7, 2006 7:27pm Jan 7, 2006 7:27pm
Quoting DrRock
I don't believe that at all. I don't think there are many mechanical systems that work. Any time I test a system that is posted or out of a book, they don't work.

Simon
I'm confused then. First you say you can work with other people's systems, and then you say they don't work - and then you beat yourself up when you succeed!

I hope you've got something that works for you!

The thing I've developed is extremely simple, and a useful tool to help you make your own decisions based on simple and clear information that is already there on the charts, if you know where to find it. Maybe if you try that, then you will be able to use it to support your analysis - or something.

Take care, and good luck in 2006
The framework is there; we just have to work on our frame of mind.
  • #13
  • Jan 8, 2006 5:53am Jan 8, 2006 5:53am
Quoting niceguy777
I'm confused then. First you say you can work with other people's systems, and then you say they don't work - and then you beat yourself up when you succeed!

I hope you've got something that works for you!

The thing I've developed is extremely simple, and a useful tool to help you make your own decisions based on simple and clear information that is already there on the charts, if you know where to find it. Maybe if you try that, then you will be able to use it to support your analysis - or something.

Take care, and good luck in 2006
My personal opinion is that most of the trading systems that people are using don't actually work. If you were to do a backtest on them you would probably find that they had quite bad results. This is true also for many of the so called 'classic systems' - the elder's triple screen being a good example.

BUT there are some trading systems around that do work and can be traded by anyone. But as for millions, I don't believe that at all.

I am not sure that I said that I beat myself up when I succeed either!

Simon
  • #14
  • Jan 8, 2006 11:26pm Jan 8, 2006 11:26pm
Quoting DrRock
My personal opinion is that most of the trading systems that people are using don't actually work. If you were to do a backtest on them you would probably find that they had quite bad results. This is true also for many of the so called 'classic systems' - the elder's triple screen being a good example.

BUT there are some trading systems around that do work and can be traded by anyone. But as for millions, I don't believe that at all.

I am not sure that I said that I beat myself up when I succeed either!

Simon
Hi again Simon. I was referring to where you say 'If I don't follow my system and make a profit, then I curse myself for doing a poor job.'

No matter. I actually agree with you in most of what you say. That's why I developed a framework that shows the range of positions that the currencies will move to, then it's up to you and your mindset to figure out the rest.

I think personal empowerment is both a necessity in trading and a benefit for life that trading can help with - and if you can work at it successfully, you don't need 'imperfect' mechanical systems.
The framework is there; we just have to work on our frame of mind.
  • #15
  • Jan 9, 2006 8:13pm Jan 9, 2006 8:13pm
Quoting niceguy777
Hi again Simon. I was referring to where you say 'If I don't follow my system and make a profit, then I curse myself for doing a poor job.'
.
This is a very important point I think. If you are a system trader and you make money as a result of deviating from your system, then you have done your job and have put in a poor performance. You can't control the outcome of a trade, all you can do is execute it according to your rules which means your focus should be on your rules, not on the outcome of the trades.

If you deviate from your rules and make money, then this will reinforce to you that deviating from your rules is a good thing to do - this is a bad situation. It is much better to have a loss so then you reinforce what an idiot you were for not following your system.

Simon
  • #16
  • Jan 10, 2006 2:55am Jan 10, 2006 2:55am
Quoting DrRock
I am a 100% mechanical system trader. I see my role as a trader to simply follow my trading system.
Simon, why don't you use an API to automate your trades? You will have much more time to develop new systems!
time is money! Z
  • #17
  • Jan 10, 2006 4:54am Jan 10, 2006 4:54am
Quoting Zazzy
Simon, why don't you use an API to automate your trades? You will have much more time to develop new systems!
Zazzy,

Great question - I am a trader not a programmer :-).

I have been using FXCM but am now moving towards Oanda because of their greater flexibility and their API. I already have a managed account with Oanda being traded via an API and will soon have my current 3 systems programmed for me.

But, then again, it did take me 5 minutes to do my trades this morning so it isn't exactly time consuming.

Simon
  • #18
  • Jan 10, 2006 10:20am Jan 10, 2006 10:20am
In reading through the thread a memory came to mind thinking about balancing the planning/trading thing.

When i was a teen i luv'd model trains! I would spend hours and days doodling in a spiral binder dreaming up track plans and scenery concepts. Weeks and months went by and finaly i'd saved enough money up to begin purchasing the materials needed to get rolling (pun intended). Much to my suprise, i found myself quite bored when the final tree was planted and the trains began to roll on the tracks!

Sooooo, i sold the trainset and started dreaming about the "next" layout.

With this part of my personality as such a foundational element, I must remember that in trading, planning is absolutely essential to success....BUT

At some point in time I'm gonna have to pull the trigger and trade what i believe to be the direction of what my analysis has shown me. And unlike the model trains running around the layout in a set course in full control ( = Boring), i must realize that all the "planning" in the world won't change the currency direction even one pip ( = excitement...uh, er, sometimes a bit too much so. grin).

Just rambling and goofing off during a slow session of trading.
http://www.accrete.com/emo/Blowing_Bubbles.gif
  • #19
  • Jan 10, 2006 11:53am Jan 10, 2006 11:53am
"Sometimes wanting is better than having Ti'pring"

Trade and be happy Grasshopper
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #20
  • Jan 10, 2006 12:16pm Jan 10, 2006 12:16pm
Quoting DrRock
This is a very important point I think. If you are a system trader and you make money as a result of deviating from your system, then you have done your job and have put in a poor performance. You can't control the outcome of a trade, all you can do is execute it according to your rules which means your focus should be on your rules, not on the outcome of the trades.

If you deviate from your rules and make money, then this will reinforce to you that deviating from your rules is a good thing to do - this is a bad situation. It is much better to have a loss so then you reinforce what an idiot you were for not following your system.

Simon
Hi Simon,

But don't you leave room for development of the rules? If you deviate from the rules and make profits consistently as a result, doesn't that mean you should change the rules?
The framework is there; we just have to work on our frame of mind.
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