Thread: Can be automated trading be profitable?

Originally Posted by ;

Sure it is possible, there are people who have consistent profitable robots trading for them - that is a fact. 1 case is high frequency trading, which is highly profitable if done right.

However from my experience, it is much much harder to make a robot that functions than learning how to trade and profit by yourself. To make a winning robot you probably need expertise in analyzing complex systems (using data, signal processing, etc.. .) , after which you also need to know how to fine-tune the robot. You then also need to make sure it's profitable...

I also was under the impression that robots and appliions needed a individual to know coding and to be able to code expertly if they wanted to change and modify a robot?

That automatically stands out me, if it is true. lol

As previously mentioned, there's High Frequency Trading, Quantitative Analysis, etc..

I can not remember the exact statistics/markets (I'll try dig it up), but in some markets, automated trading outnumbers discretionary trading with a ration of 3.5 to 1. .

Certainly automated trading can be performing. . But you have to teach your program something like sense - if this works, a robot can be more effective than a human - that's an issue of fact.

A human brain is far more powerful than a computerchip (because of technical reasons I wont explain further) BUT a computer is more efficient at a smaller range of involved variables and so it's much quicker to do calculations.

IF a computer had to procedure as much advice as our brain does (visual, feelings, etc) a computer will immediately kill itself - it is not effective at that.

But if you figure out how to invent some principles to some programm a computer will probably be ways quicker than a human.

Let's compare the market together with the weather (because it is roughly the same in relation to becoming an chaotic system) - who is better in predicting a weather prediction? Because it can add some variables to his equation of understanding what 19,, it is the human.
A robot lacks this feature and is jailed to his mended equation.

Only for your interested: Even today NO computer was able to exactly reproduce climate and weather before because the equations still lacks of some information.

On the flip side, in the event that you discovered a mechanical system for yourself which functions, say, 60 percent of time to get a triumph (where you always! Act to your principles - then a robot can make you rich, because it can exchange this system 1000s of times every day.

But the thruth is, there is no such system, which will actually function - it might work for a while but because of the chaotic nature of the market parameters will alter over time and the robot will probably fail. . And he wont fail 1 moment like you, he'll fail 1000s of times every day.

That is the risk That's involved when you have a robot that does nothing more then you will do but quicker:--RRB-

Lots of things will change if someone will write the first really self-lerning Artificial ligence...:-)

Originally Posted by ;

Additionally, I was under the belief that robots and appliions required a individual to know programming and to have the ability to code professionally if they desired to change and alter a robot?

That automatically counts me out, if it's true. Lol

Uh yea that's obvious, you need to know coding to code a robot

Originally Posted by ;

Uh yea that's obvious, You Have to know coding to code a robot

Hehe, yeah, I guess I phrased that question quite ignorantly... lol

I believe EAs are at first stage. Stock marks and forex had been around for years but trading through computers as well as personal computers had only been popularized in the previous decades. Yes, there had been a successful EA ever made that had made consistent profit since, however, it is too early to tell that EA will not function to drive consistent profit.

I believe that a successful trader will adapt to ecological fluctuations which includes technologies. When technology creates chances for automated trading, people's natural greed will produce a demand to exploit such a new opportunity. When the demand grow to a certain stage (which it is growing at the moment), I believe it is feasible for automation to beat the market. Individuals was once before, doubtful about online purchases because of security issue. I see this problem is slowly claimed down when people beginning to accept and revel in online security of transactions.

People can really build complex artificial intelligence and robots in which the robot infact does its own decisions and learnings. What prevents us from thinking that one day, forex EAs may incorporate such AI and judge with a certain level of human emotions into trading automatically?

Simply put, I had a hard time beating the master degree of a baseball match, not to mention that this chess game is at no cost. I believe it's going to be much harder to beat whether the match is selling for millions of dollars.

Originally Posted by ;

Yes, there had been a thriving EA ever made that had made constant profit since, however, it's too early to tell that EA won't work to drive constant profit.

Bullshit, all I really do is create EA's that are successful over the long haul. And they do not have to be complex. They have to incorporate market logic.

I really don't think, that an EA will probably ever be able to really have a 100% gain ratio (over unlimited time) - it is mathematical possible with an unlimited quantity of margin. . But that's it.

As an EA would have to get all paramters necessary to calculate the market, he can never have. As I mentioned in another thread you will find huge elements that you won't ever know and neither process in a sensible quantity of time.

The strength of an EA is: It can exchange permantly. It actually does not have to be extremly complied as long as it creates profit.

Let's assume a situation where a egy makes just a bit of profit, but it requires the trader to be permanently online. Not possible. An EA can do this with ease, over years.

And that's the thing about it even the smallest win results in a fantastic amount of money if realised over and over again.

But do not think , that a pc can predict chaos with no all input that it would have to precalculate them. And it is going to never have input.

Do Foreign Exchange automated trading egies work? Are you going to be able to take a few of these progr sold on-line and amass a great fortune -or even just a monthly income- through a little bit of time? I need to tell you that the answer to this is not any and the proof of this is all around you. I have been in the expert advisor industry since it began nearly 4 decades back and I can tell you that I really don't know a single person that has been able to reach to reside from an income obtained from commercial automated trading egies.

There are primarily two reasons why this has become the situation. To start with, automated trading egies being marketed aren't made to be profitable in the long term, they're made to be marketed and to create a platform to market is quite different than to create a system to really generate a long term income. You will see that many commercial systems are based on Forex Currency trading egies showing very little signs of profitability and market adaptability. A greater danger is that the majority of people are unaware that statistically significant results (years!) Are required to proof any like hood of long term profitability and they hurry to buy systems that promise extremely significant profits but that in the end deliver little or nothing. These progr which are only able to achieve profits in the short or medium term (results which are statistically meaningless) reveal their true face in the very long term and wipe people's accounts.

The next problem is that the majority of people who encounter automated trading are under capitalized and believe that they can make a living starting with something like ten or one thousand US dollars, a few expert advisor sellers even claim you can do this from 50 or 100 US dollars. The truth is that in order to reach this you would need to achieve a long term performance that would be exceedingly high, something that the market isn't likely to let because of the self-limiting character of market inefficiencies. It is no coincidence that the best traders and hedge funds in the world reach average annual profits of 20-30% and much greater. The fact is that attaining higher profits places equity at a really significant risk due to market exposure, something that expert advisor sellers would like you to think does not occur.

Now, I am not saying that automated trading egies don't work. As a matter of fact, I dwell from trading those systems myself and that I can tell you that there are systems which can produce money in the long term. These specialists are equipped with adaptability and funding preservation in your mind and produce much less than what your regular EA seller promises you, however, they really do work with a higher like hood of surviving in the long term (10-20 years). However automated trading is a difficult task that demands a lot of knowledge and comprehension, something you should be prepared to do if you really wish to profit in this market.

Thus in the end, do Foreign Exchange expert advisors do the job? I really don't think you'll be able to acquire from your 500 USD to 1 million in a few years but through adequate investment and the use of expert advisors with sound trading egies you will most probably be able to achieve a long term operation of 15-25% per year with conservative risk and this in the long term will allow you to build wealth and diversify your other investments. Does this seem more realistic? Certainly making millions of dollars in a few years from small enterprises simply cannot be done and a lot of patience and a lot of knowledge and training are required to achieve long term profitability.

Originally Posted by ;

do forex automated trading egies operate? Will you manage to take some of those systems sold on-line and amass a fantastic fortune -or perhaps only a monthly income- through a little bit of time? I need to tell you that the solution to this is no and the proof of this is all around you. I have been in the expert advisor industry because it started nearly 4 years back and I can tell you that I don't know one person that has been able to achieve to live from an income obtained from commercial automated trading egies.

There are primarily two reasons why this...

Very excellent post! Just what I am thinking too. The thing is, it depends how much risk you can stomach. If you can stomach drawdowns in the realms of 60 - 80% then the returns can grow dramatically, while still staying profitable in the long term. Problem is that most people can't stomach such drawdowns, that's why insane returns will stay a theory for the majority of people.