Sunday, December 28, 2008

I had a question in the chat box that i thought deserved an answer in more depth - so here goes.

Tarrentino: Soul, very very interesting stuff in your blogs. I have spent the last three years messing about with automated system development but have yet to get the smooth equity curve we're all searching for. My systems worked well over 2-3 years but there was always one period which made the whole thing FUBAR. Got an article being published in e-Forex in Jan which you might find slightly interesting although there's nothing revolutionary. Are you an ex bank trader?

hi tarrentino - (your films suck by the way :) ) seriously tho, no, not a bank trader just a self taught trader but i have met with many bank traders and know the score.

Automated systems can work but i don't believe they will for retail traders over the long term - the mega players have them that win but they take very small wins that we can't get because of retail spreads - institutions have spreads as low as 0.1 pip and often zero - those people have automated systems.

There's also the calibre of programming tools at our disposal - Until we get some real artificial intelligence then i no longer believe that automated trading is a way to go - it worked for me for just over a year and then as you say FUBAR.

I dont think it's possible yet to programme a computer with the instinct that a trader has. I'm sure that in the future someone will prove me wrong, but as yet i've not seen it.

I actually now find trading so easy that I couldnt be bothered to automate it - trading is a numbers game - take enough of em and hold on to em when they win and you can't fail - all you need is time and money - both of which sadly most traders do not seem to possess. They want everything today in a hurry and don't have the funds to even trade with a long term conviction.

Trading is 'the long game' - that takes money and time. Thankfully I think that i've now found that out. I very rarely go below a daily chart anymore and that's where the real money is.

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