% of Time Happy with Bot Performance??
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Hi Grahal. I somewhat feel similar. I actually stopped trading any automated strategies as I feel many are not suited for live trading. The money management in 95% of all codes here are not managed properly, and should be at least x 10 in the initially account. I studied a lot this past year as I was not profitable, in Manuel or automated trading. It about to turn, at least in Manuel trading. So I’ll stick to that and use Proorder to backtest and not live trade. I think it has to do with ones expectations of how much ROI you would like, or hope for. When seeing the many codes here with +250-500% ROI over 2 years you are easily fooled. Just one example.
Pathfinder DAX- the most popular code here. it’s recommended to trade with 10000 euro, however every SL is placed at least 350-600 points away, and accumulating positions. with just one position a proper MM should say 1% risk- that’s 35000-60000 points=35000-60000 euro for the initial account! Some trade with a 4000-5000 euro account- risking 10-15% per position!!!!- that’s stressing! Pathfinder lost in one trade I think it was February around 5-6% of the equity in one trade(350 euro). I also came to the conclusion that saisonal traidng is a very curvefitting mechanism and It was implemented wrong in pathfinder(IMHO). It can be there, but I feel it needed to be implemented to protect your equity and not to profit your gains. It’s not a disrespect to Reiner or anything. In fact I think he did a very good job on pathfinder- but as I recall it was developed for ETF’s which is not leveraged, CFD’s are. in EFT’s he’s expectations was 25% ROI. You can always argue that the indicators stops the trade and so on, and in the end, it up to one self to decide how to trade. So this is just in my own humble opinion- to risky.
Anyway I think when professional trades recommend only to risk 0.5-1% of equity per trade, there are some truth in that, never the less your feeling about it. When you risk 10% in an automatic code- it stresses you out.
Also I had to adjust my perception of what to expect in ROI. down from 500% a year to measly 25%.. that it. If you can make persistent 25%- 3 year in a row, Goldman Sachs has a golden position for you 😉 .. yes yes I know you hear about traders making 100%.. even a 1000%.. it just not persistence. it luck, and they won’t tell you when they lose.
My guess is that you are not relaxing because you are risking more that your gut feeling tells you. I have 2-3 strategies that I believe in here. all making only small but persistence winnings- they still run in demo. one from ALE one from Maz and one from Doc trading.
Some good books for the psychology in trading, that should be read by all traders- they also come in audio format:
Trading in the Zone, Mark Douglas(Classic)- I identified my self in every stages of this book- it a real eye opener!
The little book of behavioral investing
Reminiscences of a Stock Operator, Edwin Lefhvre (Classic)
Cheers Kasper
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Hi Grahal
Reading your statement
Once a Bot opens a Trade I can’t relax in case price goes the wrong way, which most times it seems to almost straight away. Rare that a trade opens and profit turns green within a few seconds!
I find manual trading less stressful as I feel more in control!
This says to me you don’t have confidence in your systems so you should not run them – that’s why you asked the question. I on the other hand have high confidence in my systems but I don’t have confidence with PRT and IG.
If you are more confident and comfortable with manual trading then this is the way to go and just focus on indicators and entries and exits. You have to find and use the trading style that works best for you.
Kasper you’re right about returns ~20-30% PA and that’s it, because that’s what the hedge funds average from my reading and sure once in a while there’s a big move and they make > 100% but that’s an outlier and not the norm. I’ve had 1 or 2 great years but most of the time its average and I have to manage my expectations.
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My most profitable automatic system was running a single strategy on a portfolio of markets. So the few currently profitable markets pushed the equity curve up and I had a great time. Would do it again.
What I did notice was that sometimes the orders where placed incorrect. In 2-3 markets execution was about 20-50 minutes late. So I decided to stop the system soon after because that is a real problem for me.
Learning about the plattforms “special features” is helpfull but it shows how much longer it will take before I can trust an automatic bot with a simple MA crossover strategy to run 24/7.
If I use automatic strategies today, then for trade management. The entry order is placed by the system but the decision when and where to enter has been made by me. The system is designed for single trades only: place the entry order, calculate the exit, execute and quit.
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Interesting discussion as always guys. I for one still believe that it is possible to make money from automated strategies and currently have 51 systems running live. Am under no illusion that I may have just been lucky and that when this never ending bull market dies my P&L goes with it 🙁 Agree with the comments about the amount of risk we are taking on having suffered a 25% P&L drawdown in February (my own fault putting a strategy live that wasn’t ready) and another 12% drawdown when my usually reliable Dow strategies got crushed at the start of May, luckily mitigated by results on other markets. @ElsborgTrading, interesting reading your comments about Pathfinder, I may have this wrong but I think the original author wrote that (great piece of work BTW) more as an intellectual/coding challenge rather than a system to trade with? I think a lot of people may be taking strategies from the site and putting them live without understanding the risks or how they work. I personally would never run a strategy that someone else has written, although I do incorporate ideas from here or anywhere else into my own algos if they work 🙂 Am hoping that in 2 years time I will be asking you for those contact phone numbers, either that or I will have gone off radar … did that guy make his pile and retire to the Bahamas or did he just go broke?
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I am a great believer of the fact that indicators are just lines on a screen. They can tell you everything or nothing but you decide what they say based on your knowledge of the market. I think that the “gut feeling” at the end is just your knowledge of the trading floor. I got rid of a lot of my psychological pressures by starting to pick stocks with strong balances. I had to learn to read and interpret balance sheets and that was the most eye opening reading in my life. Now I know, for example, that a top created by selling shares outstanding will bring the market down and then back on the direction of the original trend and this boosts up my confidence and my profits. I increased my gains and reduced my stress working with portfolios and holding stocks for longer amount of time. I will never make the 800% plus earnings that a famous world champion of trading is advertising but I can do a good living with what I make.
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Hi, wanna add my 2 cents regarding various topics i guess:
1. First of all i wanna just say that there’s stories, podcasts, books and even competitions about real people making real money using automated systems. It is possible, that being said its not easy.
2. Regarding the fact that ur not comfy running systems as soon as they enter trade: I feel u bro, i felt the same way when i started with this (in my experience).. In the beginning i was running systems i found of the web/this site. Other peoples codes and i felt uneasy every time they entered a trade. Rightly so i would add, because i didnt really know what they where doing. Now that im running my own codes, i feel confident that they are doing what they have done in the backtest. If it will work or not in the future, is not known until i actually trade the strategy (demo or real money). So i run it in demo for a month or 2 until im satisfied and after hitting the “play” button for real money account, i know its just a numbers game from there on. Im gonna loose say 45% of all future trades. So if i loose 4 in a row i try to calm myself down by saying “well, according to the stats i should be getting a few winners soon!” And if i dont, but the market goes “my way” then thats a big red flag that something is wrong and let the troubleshooting / shutting down the system begin..
3. I would say Im a very methodical person and i trust a log of 500 trades more than “i think its gonna go up today” (meaning manual trading) approach. I would rather put my trust in a strategy that i could test and tweak and demo-trade, than to have to trust my basicly non-testable “thoughts” on the market from a day to day basis, based on a few lines i drew in chart. I would have no way to say that my manual trading is “going as planned” or not, because i would feel like there is no “plan” to begin with. No set of rules to say if a strategy is working or not. If you can trade manually and make steady profits, then good for you. Ive tried it and for me, it was a horrible psychological experience and that bad feeling i got from effing up a manual trade, either from FOMO or from panic selling, was so horrible for me that its the whole reason i got into systematic trading. The thought being that i could sort of remove myself from the trade itself. if i loose a trade now it just feels like a loss that i knew had to happen, my backtest is showing me hundreds of loosing trades. I can look at the market and definitly see why it entered, and also why it failed. Shit happens.
4. All of the above said, i still have my inner demons to defeat. Ive made the mistake of turning off systems literally hours away from their biggest win ever, even compared to entire backtest.. Again I had to face the fact that i am my own biggest enemy, even with automated systems. With the risk of sounding like a douche, meditation and reflection has helped me to overcome this fear of loosing trades and i can calmly look at a failing trade without feeling the urge to hit the “sell” button. Also i have turned off all notifications for trades on my phone and computer. I only check my account at the end of the day to see if im up or down and log the trades. I have systems that trades for me, no need to stare at a loosing trade and feel the panic, and no need to stare at a winning trade and feel the pride and also fear for loosing the unrealised profits.
5. Lastly, i know ur not new to this, but im still gonna hit u with a tip (that u might even have written urself on this site lol): if u ever feel uneasy about a trade just make sure that its not because you’re overtrading, either on account size or amount of trades. If youre feeling uneasy just because of the $ up or down, just try to remind urself that running automated system are 100% gonna lose a few trades! Accept that and try not to stare at the trades, but just try to create a new system in stead, in a chart where you do not have an on-going trade.
Edit: All my trades risk =< 1% of total equity. Risking 5% on 1 trade would make me feel very uneasy. If you screw up 10 trades in a row youre really gonna feel it. In it for the long run baby yeeea
unless my math is off, if u got 100.000 and u risk 5% on each trade, and u loose 15 trades in a row, then ur left with ~50.000. Also to get back to the initial 100.000 you would now need a 100% profit on the current equity.
However if you risk 1% and loose 15 in a row then u got like ~86.000 left. and i would only need like 16% profit on equity to get back to the 100K
Obviously risk/reward is different, but lets say im running 7 systems. If i had about 100.000 in equity I would have to think that all 7 systems could start loosing 2 times in a row starting tomorrow.. If i where to use 5% on each trade i would be broke fast unless i got very lucky or had god-like systems.
quote from “better system trader podcast”: Im a risk manager first, trader second.
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