Friday, October 14, 2005

My apologies

Sunseeker, I did not mean to be rude and apologize, if you understood my article in this way.

The thing is, I have been in a lot of chatrooms, where people posted live trades, my futures-trader can post live trades, but ask yourself, what does it help your trading, when I tell you, that I entered a Euro long at 1:37:28pm EST today at 1.2131 or a DAX long at 10:45:10am EST at 4989.0?

Nothing, absolutly nothing. And had I posted the trades in realtime, it would have meant zilch, nada, just another trade made by globetrader.

In my own blog, if I use it as trade-journal such an entry might make sense, if I add some comments to it like I did, when I wrote my trading journal, but the trade without further information is just that, a trade. It might be profitable, it might get stopped-out, but knowing that you made a trade will help noone. And you could be Warren Buffet and Jesse Livermore together, it still would mean nothing.

What would mean something, if you not only told people, that you have a profitable system giving you this and that entry today, but also why. How your tradesystem generated it’s tradesignal. You already said, that it is a always in the market system. That’s interesting and I would love to discuss such systems with you, especially, if they are profitable.

Other traders I asked always told me, sorry, but that’s a big secret, because if it were known to too many it would loose it’s effectiveness. If anything a widespread tradesystem generates more volume in your direction than a system known just by yourself.

But that’s beside the point I want to make.

The idea behind the two trading systems currently implemented in Futures-Trader came from reading “Zen in the markets” and Sport’s blog, where he posted day in and out about the First Bar trade. 
I just asked the question, whether it is possible to prove, that statistically these systems work. And everyone already playing with the Backtest Module will agree, that using the right trademanagement parameters, you can build a very profitable automated system, use other parameters and the same system, based on the same tradesignals, fails miserably. Actually it would be a sure way to the poor house, if you invested your money in such a system.

Again: The same entries, traded one way generate a very healthy income and traded differently are the sure way to the poor house. That was really the most astonishing result I got sofar from my backtesting.

And the consequence: It’s not the entry, which is important, which decides whether you become trading elite or just sheep. It’s your trademanagement.

3 comments:

SunSeeker said...

Apology accepted and thank you. I owe you an apology for misunderstanding. I am sorry.

I do agree with you about not learning much from posting trades without any reasons. There is something to be said however about posting trades live.

I was just hoping to get others to join along too and have discussions about all the problems with autotrading more so then anything really. Because that is where my interest is. I do think it would be pretty cool if there was a place where we could all autopost our trades with or without reasons, background etc. I think in some sense it would hold us 'more accountable' and force us to look closer at our systems. I just watch my everyday now and have sort of stopped being so critical of it. Not good. Maybe we can figure something else out. Like I said, i dont like hotcomm. Any ideas are very welcome.

You are right I have worked on my autotrading system for several years now and do not wish to speak to how it works. I would like to talk about just how hard all of this trading is though. Trading is not easy. Probably never will be lol.

OK glad we worked through this. Again my apologies too.

as for always-in-market autotrading it has some serious risk involved imo. why? because its like running uphill forever. constantly working the trade, figuring out when to switch. im just glad the computer is doing it.

also, the risk is large, maybe. i myself dont trade like this funny as it sounds. i am always flat at the end of the day. my autotrading is always in a position. case in point. today i took a hit and am down around 10.0 points on ER2 so far today. i was short from the close yesterday and got whacked 5 points or so. it is trying to make up for losses as we speak. however, interesting enough, it usually picks the correct side and mostly gains are made.

well something to think about anyway.

PianoMon said...

Everyone out there wants the perfect system.
Everyone out there wants the perfect filters to reduce the losers.
Everyone out there wants the next best indicator.
But you can throw darts and make money if you understand what to do after you enter the trade to have the best overall results.
That is not ever traders spend their time........
They spend their time reading text in chat room hoping for someone to spoon feed them trades.
That will never change sorry to say.

Gulash said...

As the man said:"trading is simple, not easy". Put on a trade in any direction, put in a tested stop and trade the trend, exiting when the trend is over. Nothing fancy required, just something that helps identify the trend. Then autotrade the methodology so the only discipline needed is to not switch the autotrader off.