Automated Trading Experience

Experience sometimes brings us to some intriguing conclusions. Throughout my trading career I have come across many different types of trader and trader profiles. By trader profiles, I mean the different characteristics that 'build' a trader. I have seen boastful traders, proud traders, cool traders, anxious traders and even those that are very calm. However, I have been able to separate a wider sense that encompasses many of the trader characteristics: psychology.

I have personally observed a few traders with great potential fail simply because they could not handle the decision making process of a trade. They would fail to take a trade. They would rush into trades. They would close trades too early either by not letting their profits run or they would move their stops to brea keven with no logic behind it.  They could not simply follow the plan.

I myself have made many mistakes as such and still make them from time to time. 

The idea of lack of discipline is widespread in the trading industry and is one of the main reasons why most traders fail. 

I have never been a big fan of automated trading. The thing about the widespread majority of automated systems, EAs, Robots or however you like to call it is that they are composed of complicated math formulas rather than a well thought mechanical system in which, from time to time, there can be human intervention. Most mathematical formula based EAs, have a breakpoint and cannot be regarded as a healthy investment means in the long run.

On the other hand, if one has a sound trading plan, has logical places as to place the SL, where/how/when to enter the market as well as a TP level and all this can be translated into an automated system, than I tend to believe that one might get the upper hand: the discipline and psychological aspects of trading will be left out.

The market has artificial intelligence and no place for emotions or sentiment. Period. Be on the wrong side, lose money and the market will not be merciful on you: It will take your money and won't give it back to you.

Therefore, the counter weapon for that is to also use artificial intelligence through a sound trading plan thus leaving all kind of emotions outside.

Also, I came to a personal conclusion that trading is game of averages. You will win some, loose some. However, if you can land an average high  enough so that profit is sufficient as to counter the risk involved, than you are in business. I believe that automated or semi-automated systems can help us achieve these goals and with less stress.

By this, I don't mean that you don't have to do your work every day. On the contrary, this means that you have extra inputs as to provide extra room for improvement in your own trading system. Also, some decisions are there to be made such as: reversing a position or not? Should I be in the market during heavy news days? If I am in the market during te news, is it prudent to reverse?  and so on...

Cutting it short, I decided to 'migrate' 4 of the trading systems I use into automated systems. The first one is up and running but filled with small bugs. Therefore it is still not fully operational but operational enough as to provide a general idea.

The system has been up and running (forward testing) from the 24th and it was down for a day (the 28th). It has been able to rightfully increase a $100k account by more than 1% just in these last few days (actually just 4 actual trading days) . Needless to say that backtest on the system provided impressive results as well.

If you are interested in following the beta version of the system just click on the link below:

http://www.myfxbook.com/members/maurosandrade/ftt-18-4-stand-set/154655

Too early to congratulate my programmer or the system itself. However, I can call it a good start.

Cheers and Happy trading to all.