Disliked{quote} hi Copernicus, thanks for your input, this is also my reply to Atokys which I promised before. Basically I am not against mechanical / automated systems. It's just the fact that I believe that a seasoned experienced trader who works hard, is patient / disciplined and understands the way markets work and market participants behave, can do much better than any mechanical / automated trading system - might be wrong here though as have never done proper research into automated trading Actually there is something I would be really opened to...Ignored
You may be very well right in regards to discretionary systems in the hands of excellent traders outperforming fully automated systems.....but the problem however lies in the fact that this can never be validly authenticated, as discretionary systems by their nature mean that the technique or the skill is inherent to the trader and cannot faithfully be transferred to another with exact fidelity.
Given the problem of fidelity of translation, and given the fickle nature (noise) of this market, the only way that I can therefore obtain sufficient confidence that it is the actual strategy which has an edge as opposed to the skill of the trader is through the application of full automation. Exact repeatability and the logging of performance results therefore serves to validate the technique itself as opposed to the capability of the trader applying a technique.
With that in mind then we come to question of whether there is a valid technique that is applicable for all seasons. I agree that the performance results of different techniques apply to different market conditions but as Atokys suggests, the power of a system is not simply defined by 'when' it trades but also very importantly when it 'doesn't' trade. The premise I therefore adopt for automated systems is that like a spider's web, a trade signal is placed to capture the strays that fall outside the bounds of random chance. I am very much philosophically "90% Efficient Market Hypothesis" and say "10% Behavioural Hypothesis" and therefore my trade style is that of a 'weak' hunter very patiently setting traps for it's prey.
....anyway, interesting stuff.