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The life of a trading system on Forex Factory

  • #701
  • Apr 17, 2012 4:56am Apr 17, 2012 4:56am
Quoting pipmutt
I don't get it, are you saying every strategy/system can be automated regardless of any discretionary element? If you can automate mine then it would be a price worth paying.
Exactly the opposite, any system can work given the right trader and his discretion, you can't code discretion therefore very few systems will work with a EA as shown by the total lack of profitable EA's going around.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #702
  • Apr 17, 2012 5:00am Apr 17, 2012 5:00am
Quoting pipmutt
I don't get it, are you saying every strategy/system can be automated regardless of any discretionary element? If you can automate mine then it would be a price worth paying.
yeah I have an issue with this... One of my school friends went on to work for a hedge fund in London, now retired at 38.... git!

When I asked him about the trading he told me that there trading is 80% automated now, but to achieve that they had a backroom of 20 guys, math genius' running data all day, every day and adjusting the parameters....

From that they ran automated trading risking a very small percentage and aiming for 5% growth a month.

So in short, it can be done, but just sticking in some basic rules won't cut it...
tradewith60
  • #703
  • Apr 17, 2012 5:00am Apr 17, 2012 5:00am
Quoting pipmutt
I don't get it, are you saying every strategy/system can be automated regardless of any discretionary element? If you can automate mine then it would be a price worth paying.

No, not at all. What I'm saying is that it is the discretionary element that makes or breaks the vast majority of systems. And those who say "I've been profitable using this system", more often than not do not realize the other elements that have contributed to their success. They may say that they are following 100% the rules of the system, but those rules are not enough to give them an edge. And they usually can't describe accurately the "extra" rules that make them profitable.
  • #704
  • Apr 17, 2012 5:04am Apr 17, 2012 5:04am
Quoting micmic
No, not at all. What I'm saying is that it is the discretionary element that makes or breaks the vast majority of systems. And those who say "I've been profitable using this system", more often than not do not realize the other elements that have contributed to their success. They may say that they are following 100% the rules of the system, but those rules are not enough to give them an edge. And they usually can't describe accurately the "extra" rules that make them profitable.
I think its the system that gives the edge, the strict rule based part, then the discretionary extra analysis is what gives you that extra win or greater profit...

For me the system rules is the important part... my opinion....
tradewith60
  • #705
  • Apr 17, 2012 5:06am Apr 17, 2012 5:06am
Quoting 60minuteman
yeah I have an issue with this... One of my school friends went on to work for a hedge fund in London, now retired at 38.... git!

When I asked him about the trading he told me that there trading is 80% automated now, but to achieve that they had a backroom of 20 guys, math genius' running data all day, every day and adjusting the parameters....

From that they ran automated trading risking a very small percentage and aiming for 5% growth a month.

So in short, it can be done, but just sticking in some basic rules won't cut it...

It's not automated like that, they don't use EA's to place trades, they use EA's to accumulate a position, say Long on EU for 1,000,000 Lots but the decision to accumulate is made by a human still and what method / how aggressively they want to do so, more aggressive gets them in faster but also moves the price bla bla bla.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #706
  • Apr 17, 2012 5:10am Apr 17, 2012 5:10am
Quoting 60minuteman
yeah I have an issue with this... One of my school friends went on to work for a hedge fund in London, now retired at 38.... git!

When I asked him about the trading he told me that there trading is 80% automated now, but to achieve that they had a backroom of 20 guys, math genius' running data all day, every day and adjusting the parameters....

From that they ran automated trading risking a very small percentage and aiming for 5% growth a month.

So in short, it can be done, but just sticking in some basic rules won't cut it...
Yes, and this is another issue I have with most "profitable systems" that say "keep it simple". Well, if I keep it REALLY simple, I will lose my money. No matter whether it is automated trading or manual trading, "simple" doesn't cut it.

What I've been saying is that I can program most of the systems that appear here in FF, and follow their WRITTEN rules 100%, and they will not be profitable. Not even by little. It turns out that in order to make them profitable one also needs "discretion" and "several thousands of hours looking at charts". So, it's not the system itself that is profitable or not, but the trader.
  • #707
  • Apr 17, 2012 5:13am Apr 17, 2012 5:13am
Quoting 60minuteman
I think its the system that gives the edge, the strict rule based part, then the discretionary extra analysis is what gives you that extra win or greater profit...

For me the system rules is the important part... my opinion....
I don't think so. Show me a system with clear rules and I can make it into an EA. You just have to tell me the rules as you would lay them out to someone you would like to teach. "Apply discretion" IS NOT a rule.

It will not be profitable.
  • #708
  • Apr 17, 2012 5:15am Apr 17, 2012 5:15am
Quoting Turveyd
It's not automated like that, they don't use EA's to place trades, they use EA's to accumulate a position, say Long on EU for 1,000,000 Lots but the decision to accumulate is made by a human still and what method / how aggressively they want to do so, more aggressive gets them in faster but also moves the price bla bla bla.
you're wrong, unless you know him too, and he told me a load of bullshit...?

There core strategy was a trend following system based on fundimentals in key years like the US election, etc etc, then it was all executed using highly complex algorithms...

The human element was purely managing the risk.
tradewith60
  • #709
  • Apr 17, 2012 5:23am Apr 17, 2012 5:23am
Quoting 60minuteman
you're wrong, unless you know him too, and he told me a load of bullshit...?

There core strategy was a trend following system based on fundimentals in key years like the US election, etc etc, then it was all executed using highly complex algorithms...

The human element was purely managing the risk.

Don't believe everything you hear, no computer can replace a human brain as yet likely never will, why would they pay traders bonus's have huge offices and expenses if all they needed was a server farm stashed away somewhere and a few code monkeys.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #710
  • Apr 17, 2012 5:27am Apr 17, 2012 5:27am
The only fully automated trading that takes place is the Nano trading they've setup really close to the exchanges and all that does is look for weaknesses which allow it to buy at the Bid then immediately sell at the Ask before anyone else can even see the orders ( talking nano seconds here ).
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #711
  • Apr 17, 2012 5:29am Apr 17, 2012 5:29am
Quoting Turveyd
Don't believe everything you hear, no computer can replace a human brain as yet likely never will, why would they pay traders bonus's have huge offices and expenses if all they needed was a server farm stashed away somewhere and a few code monkeys.
if it's coming out your mouth, i don't believe a word of it....

if it's coming from someone i've known for 25 years, with a proven record in trading, then I will
tradewith60
  • #712
  • Apr 17, 2012 5:32am Apr 17, 2012 5:32am
Quoting 60minuteman
if it's coming out your mouth, i don't believe a word of it....

if it's coming from someone i've known for 25 years, with a proven record in trading, then I will
Well actually from my fingers via my keyboard.

I don't believe yours either, so we'll have to agree to disagree on this, unless you can produce real evidence to say so.

I think my " why would they pay X and X and X " is sufficient logic to prove my point.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #713
  • Apr 17, 2012 5:34am Apr 17, 2012 5:34am
Quoting Turveyd
why would they pay traders bonus's have huge offices and expenses if all they needed was a server farm stashed away somewhere and a few code monkeys.
because its considerably cheaper, and easier.
  • #714
  • Apr 17, 2012 5:48am Apr 17, 2012 5:48am
Quoting Razzle
because its considerably cheaper, and easier.

Offices and Trader Million $ bonus's to keep them, is cheaper than a server farm and a few geeks which will work for Coke + World of Warcraft access in there lunch breaks ??
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #715
  • Apr 17, 2012 6:38am Apr 17, 2012 6:38am
Quoting 60minuteman
I think its the system that gives the edge, the strict rule based part, then the discretionary extra analysis is what gives you that extra win or greater profit...

For me the system rules is the important part... my opinion....
What 60mm said, I know he is right because I get the same results with my system AND I have taught many people to trade it profitably during the last year.

They cannot all be wrong.

Let the flaming begin
  • #716
  • Apr 17, 2012 7:06am Apr 17, 2012 7:06am
I'm with micmic on this one. Actually if you check any of the system threads you will often see the OP saying something like "I didn't take that trade because ... <insert discretionary reason here>". I am talking about a trade that should be valid according to the rules posted by the OP himself. That discretionary reason can be almost anything - time of the day, higher time frame analysis, SR levels being too close, news coming soon, correlated pair movement or the universal "didn't like the price action". However if any of those 'excuses' is turned into a rule and added to the original set of rules, we would get rid of losers AND winners too (more winners in fact). Overall the system would be even less profitable.

In my opinion what happens is that the experienced trader, after watching the charts for many years, thousands of hours, develops some pattern-recognition skills that lie mostly on a subconscious level. He's not even aware of them and would have a hard time explaining them. When asked by someone else - why didn't you take that trade? - he is forced to come up with an ad-hoc explanation, but that's not the true reason behind his decision, it's just some form of rationalization.

A little off-topic - I am faced with the same kind of problem as a chess player (international master) and teacher. There are (chess) positions where a strong player simply "feels" that a certain move should work and plays it. That gut-feel, which some people would call intuition, is nothing else than subconscious pattern recognition based on the existence of a mental database of tens of thousands of games, many of them reaching a similar position. But when a student asks "why did you play that move?" you cannot answer "I just felt it would work". You have to come up with something and just like in trading it's very easy to do so.

What I described above also explains why there is no substitute for chart-time. You can teach any rules you want to a beginner trader or to a beginner chess player and they will both lose. But let them work hard for a couple of years and then suddenly those rules start working.
  • #717
  • Apr 17, 2012 9:22am Apr 17, 2012 9:22am
Quoting LazyPawn
I'm with micmic on this one. Actually if you check any of the system threads you will often see the OP saying something like "I didn't take that trade because ... <insert discretionary reason here>". I am talking about a trade that should be valid according to the rules posted by the OP himself. That discretionary reason can be almost anything - time of the day, higher time frame analysis, SR levels being too close, news coming soon, correlated pair movement or the universal "didn't like the price action". However if any of those 'excuses'...
Nope, like 60mm said there are rules for the perfect trade and THEN there are discretionary ADDITIONAL trades. The problem is most people don't have the discipline required to wait for the 100% reliable, PERFECT system trades, myself included (although as time goes by I am getting better at waiting).

The reason you will only have seen the inferior seemingly discretionary system on a forum is because they are too valuable to give away for free.

If 60mm is prepared to teach your for free or for £1000 even, rip his hand off.
  • #718
  • Apr 17, 2012 9:53am Apr 17, 2012 9:53am
Is it any wonder my head hurts when I read some of these posts.
Especially from Bob...
60 is right. Rest of the circus you are being called back to the center ring.

Toodles....
Master your Mind,,,Master the Market
  • #719
  • Apr 17, 2012 9:53am Apr 17, 2012 9:53am
Quoting jag1966
Nope, like 60mm said there are rules for the perfect trade and THEN there are discretionary ADDITIONAL trades. The problem is most people don't have the discipline required to wait for the 100% reliable, PERFECT system trades, myself included (although as time goes by I am getting better at waiting).

The reason you will only have seen the inferior seemingly discretionary system on a forum is because they are too valuable to give away for free.

If 60mm is prepared to teach your for free or for £1000 even, rip his hand off.

Most probably there are such systems: 100% mechanical, consistently profitable. And there appear to be several people in this forum who use such systems, even coded in EAs, and ARE NOT willing to share them, money or no money.

Now, we have two cases: Either such systems have a low annual return (eg < 100% per year), in which case I can understand asking for money in order to teach them and grow you capital. Or they have a rather high return (> 20% month), in which case there is something terribly wrong with any teacher who would ask for money in order to teach such a system: Given that it is 100% mechanical (or automated) and with such good returns, that teacher SHOULD NOT need the students' money. In the worst case scenario, if he enjoys teaching so much and would like to screen students, he should require a donation to a WELL-KNOWN charity in order to accept the students, and not pocket the money himself.

Besides, I took a look at 60minuteman's thread, and he states very clearly that there are no additional rules for his system other than the ones he has publicly shared.
  • #720
  • Apr 17, 2012 10:00am Apr 17, 2012 10:00am
Quoting micmic
Most probably there are such systems: 100% mechanical, consistently profitable. And there appear to be several people in this forum who use such systems, even coded in EAs, and ARE NOT willing to share them, money or no money.

Now, we have two cases: Either such systems have a low annual return (eg < 100% per year), in which case I can understand asking for money in order to teach them and grow you capital. Or they have a rather high return (> 20% month), in which case there is something terribly wrong with any teacher who would ask for money...
crap to that, business is business, it is a valuable commodity, sell it.
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