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Algorhithmic trading can’t predict the future, but it can greatly improve the probabilities to your advantage. To find a market advantage, you do ten strategy tests or so, and afterwards you repeat that with the opposite settings. I am not interested in some things, while other people are very interested. That is just the way it is. So why should I try to fix that?
You probably have a trading gun that is loaded with one bullet, and when you pull the trigger, you hope that the bullet will not blow up your account. Imagine you can prove or disprove any trading idea you have in minutes.
One currency pair with one entry might produce good results, while another combination might produce bad results. First, we use a demo account to get started. Once we are satisfied with our results on the demo account, we would switch to a so called cent account.
When I started out, I had a full time job. I had 3 hours commute each day. I had a family with two small children. Do you have any profitable trading systems yourself? I have.
And do you also have trading systems that are not profitable? I have those too. Once you have made it to a certain level with this automation thing, you can easily prove or disprove every trading idea you ever might have. An automated trading system can trade around the clock. I doubt that any human trader could do that for 24 hours – even once, without serious mistakes.
The financial industry has all the experts in the world, but this is not why they survive financial disasters.
Forex earthquakes do happen from time to time.
I really did a lot of backtesting, but in my opinion it is worth each and every minute. A crisis causes uncertainty, and in uncertain times people may overreact. Trading manually, mistakes seem to be unavoidable. I simply was unable to improve my results. Discretionary trading is like a navigation system with a map that contains only a handful of streets.
To get good results, you would need something with much more data. Just start to build and improve an automated trading system that fits your needs. I know that power outages occur in real trading. I have also network problems from time to time. The subheading of the book The Black Swan from the trader Nassim Nicholas Taleb, is the impact of the highly improbable.
Most people believe that the one thing that makes traders profitable is to know the right entry signal. I have seen up to 21 losses in a row, regardless of the chosen direction. But you can expect that you will not see another 21 losses in a row right after that happened. Do you now understand why I think that automated trading is the best thing since sliced bread? Even if you could consume enough energy drinks to trade for 24 hours, you still wouldn’t be able to trade up to 22 currency pairs at the same time. Traders need to train their mind on a consistent basis. Because only consistent training can overcome a basic instinct. Most people think something like: it worked yesterday, it worked last week, so why shouldn’t it work forever?
Whatever you want to trade, make a decision and do a back test.