3 replies to this topic

[traderx]

EOM

[arbman]

I traded with completely automated algorithms and mostly quit out of it. It pays a lot better to swing trade with the appropriate hedging...

[traderx]

I traded with completely automated algorithms and mostly quit out of it.

It pays a lot better to swing trade with the appropriate hedging...

thanks

Could you give me an example?

[arbman]

I traded with completely automated algorithms and mostly quit out of it.

It pays a lot better to swing trade with the appropriate hedging...

thanks

Could you give me an example?

There are many ways to trade algorithmically, but most of the really fast (and almost risk free) stuff have already been overly exploited by everyone such as the arbitrage in between the etfs and stocks, index options and etfs etc.

A lot of people trade unhedged futures intraday with some pre-determined rules and let the computer trade for them, these work well for many small profits as long as you maintain that positive bias and the stops are not violated too much in fast markets.

The purpose of the automated trading should be to trade frequently the same set of rules that you proved they have a positive edge over the markets, but small profits. So, you should not be increasing your trade frequency just because you can trade with computers either. In one way or another these all involve some sort of leverage appropriate to the system and the markets.

It is better to learn how to trade with the appropriate hedges instead, if you have a successful forecasting system for a few days to weeks. My preferred way though is to play the entire swings either by properly hedging directionally or selling premiums in options for the range markets.

Edited by arbman, 10 August 2013 - 08:38 PM.