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When you choose a low risk setting, you will also see fewer positions, and that also means fewer drawdowns. Before I used automated trading systems, I often missed market moves because I wasn’t in front of my computer.
I like the comment function. It enables any kind of trader to get more relevant information on the chart without much effort because it can print out several types of information.
Driving your car is one single thing, and that includes talking to the passengers. You would probably not be able to tell your family how often you change the gear or adjusted the speed afterwards.
Some things just don’t work very well. Hope trading is one of these things.
Random entries are a good way to find the optimal setting, because in 100 back tests you will get 100 different results. To really improve your results, you need more data and avoid being a victim of heuristics.
Profit is not guaranteed, so trading is always speculative. And from time to time you will find out that more risk is not always equal to more profit.
With all the expertise and the superior information network, one of the biggest banks in Germany couldn’t foresee the future. So what does that mean? I guess that means that even financial experts are not good fortune tellers.
All my systems are probability based and I have traded the Brexit voting in 2016, the Euro US dollar crisis, and the Swiss franc disaster in 2015.
What do you think? Is trading an area where you have to spend huge amounts of money just to get started?
I think that the historical data quality is not that important for my system because I have tried to make it secure against faulty data by design. If you have never used an algorithmic trading system before, you might wonder why it does so many positions. Well, humans are restricted. We can only deal with four to seven pieces of information at the same time.
It doesn’t matter how much money you have. It doesn’t matter what school you attended. Would you think that repeating something over and over again could improve your results? Actually, it is easy to do.
If you open too many positions, you may have a big drawdown. If you open only a few positions, you might miss out on some profit.
Today I am glad that I have invested the time, because I would have never been able to do all that trading manually.
I would rather make a small profit with a small risk. But I also know that each trader has his or her own comfort zone. A good trading result has a lot in common with a good dish. If you want to cook something tasty, you need good ingredients.
Have you heard the term heuristics? You can think of it as a shortcut in the thinking process.