Thursday, May 16, 2013

Another day...

I never considered that learning Ninjascript would lead to depression!  Perhaps my rose-colored glasses I used to wear clouded my realistic view on trading and I am now being forced to see the true reality that developing a good mechanical strategy is even that much harder than I thought (and I thought it was really hard before).  I'm still optimistic but now that I can find out in a day or two the results of a given trading system with years of cold hard data, some coding, and dozens of near instantaneous Ninja-generated P/L curves, leads me to realize how naive I have been up until now.

Once again, another system curve example below from TF 1-min. charts that fails to meet any sort of acceptable criteria for a trading system.  I think the Avg. Profit per trade was $10 - and that's with no slippage or commission.  Generate enough of these day in and day out for various systems I've coded so far, and one could certainly justify some depression.

A 100% mechanical trading system may be my ideal goal but some discretion on taking signals might not be such a bad thing.  When I look at the trades the above system took, I can see many reasons why some are just not good.  Sure I can edit the code to "filter" some of these out but then some good trade signals are missing that I would have taken.  It's impossible to try to program everything this human is thinking. It's a fine line.

In the meantime, the work continues and I'll just keep my sanity and optimistic view on life by keeping the live bald eagle cam playing on one of my monitors.  There's something relaxing about hearing the eagle chirps, watching the chicks lie around all day, and seeing the live fish being delivered by one of the parents to the nest.  The simple life! (here's direct link:
Live stream by Ustream


  1. Yes, been there, done that, got the t-shirt! :)

  2. Looking at your past performance from years ago, what do you attribute the enormous success at the time to? At one point you literally had an ATM working for you. What do you think changed that made automated trading so much more difficult?

  3. Yep, precisely my 1Lot commented above: been there, done that! My 2 cents on this and everything related to this game: I have no doubt that mechanical systems are there and many computer algorithms trade the markets by themselves however their complexity, computing power and structure is way beyond most people ability to even grasp the intelligence behind them. So I am quite sure that writing a few lines of code would not do, actually I am quite certain that, to be able to successfully trade by itself, the algorithms needed might be more complex than the whole ninjatrader code itself.
    On another note, this whole industry is based on smoke and mirrors and most people get it wrong, the way to make money in this industry is not by trading itself but by providing services for the brainwashed masses of people that see trading as a get rich possibility, first place in this industry would be the brokers - their "experts", "analysts" and all those working there are working there precisely because...!. Second place would be serious software sellers, how about this: you think those that programmed Ninjatrader code and created for you the ability to back test your trading ideas, did not attempt to code market robots?, they did, they even might succeeded but trust me you wont put your hand on something like that and those are not for selling but secrets well guarded. Third place would be the "funny software" sellers, teaching websites and trading coaches :))))) - this is by far the most amusing part of this industry and its quite astonishing to watch how successful they are, because they really are successful and I have a great admiration for most of them as I am unable to do what they do...they are great sellers. Then we get to the the most kind specimen: trading forums - group therapy and brainwashing machines. I do not understand how one can think that by doing what masses do he/she can actually win this game, its beyond the most simple logic - 95% of traders lose so why on earth would you try to achieve success by following them and trying to learn together when you should try to take their money? Forums and other similar websites might be useful for about 2 months for someone that just discovered his first chart...but that's about it.
    Anyway, long story made short: if by some miracle I would be able to actually beat the game and get 50-100% return each year I would not reveal it right now for less than 1 mil $$$$ cash and that just because right now I need money. Even then you would have to sign a ton of papers in front of a ton of lawyers and guarantee me that you wouldn't disclose it to anyone in the next 20-30 years without paying me another 500 mil $$$:D wake up people...or don`t wake up, those that take your money need you precisely for that ;)

  4. Thanks for comments.

    Soulfire, if you're referring to 2007, I was doing a martingale strategy which was an ATM machine while it worked. Then it didn't. I'm lucky I never had any margin calls or flash crashes while I was trading that!

    Anon, excellent points. The thing is, most of us retail traders have that "entrepreneurial spirit" so don't really think we belong in the group that fails 90% of the time. Those are those other traders! What's the name of that river in Egypt? Fact is that it's possible to succeed and there are examples of exactly that on my blogroll and other places. So that's all it takes really for this trader to remain optimistic and hopeful that his ship will come in! :)

  5. You are right MBA, I know and am aware that beating the market is possible and by quitting nor you or anyone else will made it however try to avoid paved roads as they lead nowhere ;).
    You all know and heard about the turtles, right? Well how many people do you think had home computers and market packages installed in their home back then in 1970-80?...very few. Believe it or not the well known Turtle system that we all know now and can easily program in to our software was a state of the art advanced strategy at his time, that's why it worked - it gave the user an almost unfair advantage over other market participants. I do not want to take people dreams but here`s another 2 cents about the few possible ways to actually succeed in this business:

    1) Be smart, very smart, smarter than most people you need that to be able to reinvent a "turtle system". It does not work with average intelligence, just does not, you have to be able to see things that most others can`t see.


    2) Have a natural inclination trough risk and gambling games, some people are born with that, they just have the skills naturally given by God. Hard work required here also, just being born with it does not guarantee success, it takes time to hone the skill and a lot of pain...this one with pain is also valid on the first point...;)


    3) Convince a successful trader to show you and teach you what he does. This is perhaps the most simple path one could take. Of course one should be very careful here as many traders that were successful at some point in the past are not so successful now...this markets have a funny way of changing themselves and success 10 years ago might not do today..or maybe it would do..see that's the beauty, you never know :)
    Of course, oh I could write a book just with the fast thousands of thoughts that scrolls in my mind about all this, you might have a serious problem in finding a successful trader and convince him to show you.

    But pay no attention to me, just ignore my silly babbling what do I know ;)

  6. And...the biggest secret is that there is a secret while the herd of sheep's are repeatedly thought the opposite until like a herd of zombies follow a dream that will never become true. Sheep`s don`t not even bother to search the truth because are permanently brain washed in believing that just about anyone can do this successfully by following some "setups"...funny right?...might be true for the second category above but you have to be a natural born gambler/trader for that and how many of you are?. Never mind the fact that finding something is way beyond what average Joe is capable of, sheep`s don't even search they just eat the vast green fields of lies and deceive so abundantly available everywhere in this domain.
    Mark my words - The turtle system at his time WAS one "Holy Grail"...

  7. Anon,

    are you commenting to enlighten/educate those who strive to be consistently profitable traders of the fact that most traders will not be consistently profitable? Or are you venting about your own previous experience with trading and you are projecting your own anger and resentment on to others who try to achieve what you seem was unable to do?

    I am not trying to be sarcastic, it is commonly stated that 90-95% of those who try to trade for a living will fail, but I am sure you know that most striving retail traders know this, so I have to assume you are venting. What I would be more interested in is your own experiences with trading, I have a feeling that it would be very interesting and possibly more beneficial to others to why they should give up their idea of wanting to ever trade?

    Came across Startup Business Failure Rate site below(kinda interesting), I'm not trying to compare trading to selling shoes for a living, but there are many retail traders who are not gamblers and are trading as a business, knowing full well the consequences and the risk. Those who last long enough to put a few good years together might be able to make it into that 5% of consistently profitable realm.

  8. Trin, first of all you got it wrong, I was not trying to convince anyone to quit, on contrary I said precisely the opposite...see the Holy grail phrase. About venting...errr...ur right, I was venting, am venting and forever will against all those that sell this business instead of doing this business, they sell it because that`s all they can do to get some money. And I would not be venting if they would not be so aggressive and full of s**t, how do I know they are full of s**t?...Well, about your feeling and assumption regarding my experiences with you have that 1 mil $? say you have 2 and I`ll make a trading magician out of you :P ;)

  9. Anon,

    after reading your previous comment a second time, I can see the glimmer of hope you offered for traders; you make it clear the hope of trading consistently well is based on if they can re-invent their own turtle system i.e. a Holy Grail.

    There is a lot of truth to that, I also believe a trader needs a system/method that can be repeated, trading on gut may work for the short term, but we are talking about long term profitability. When it comes to those that sell their trading coaching services, I am very skeptical, I have never paid for a guru or coach before; my introduction into trading was free.