Top Menu

algorithmic trading NinjaTrader requires no skill and no hard work is a false premise

A. To be successful all trading must be a pragmatic ambivalent decision based on statistical evidence and not financial or emotional reasons: Frustration, impatience, Family pressure, non scientific factors outside of the simple process of research and testing will undermine your trading chances of success.   “i really need this, i just want $200 per day i’m not greedy”  all the usual BS of normal human aspirations are not tenable reasons – becoming good at trading through the passion of trading is a good  tenable one – if you got the common sense and can learn to learn and build the skills.

B. Trading Decision > with the sim realtime trading system which you should have followed a path not regulated by emotion or time constraints but one of process and collated statistics on models – monitored this for several weeks/months, even years, with prior backtesting and out of sample testing before considering for live account realtime trading and you will have the correct amount of capital, and an understanding of the system trading behaviour with an intimate understanding of the win/losing runs drawdown, why it wins why it loses and you will have gained this insight from hands on experience and many days/weeks/months/years spent working with it to gain the belief the statistical evidence in order to be able to trade it and stick with it during a drawdown –   Plans for and understand the cycles including regular news event weeks/days and a have a a trade plan in a place on how to handle it etc semi/fully automatic/ launch control.

Is this even the correct market phase or volatility  or price to use it? etc

C. You will also understand that realtime live sim trading are the closest possible tests with inherent issues – efficiency – between the sim universe and the live universe are subject to a margin of error and potential technological constraints and human error.

In live trading  1 system – You will have 2 charts:
A The sim robot set to only trade in realtime – no historical trades present -this is your baseline
B The live robot will be working on a chart side by side – with exactly the same settings as the baseline but will trade on a different account

During live realtime trading you will be able asses the Efficiency of the model in the real world versus the hypothetical
– you will see on both charts side by side the trade entry signal at the same time
– you will then assess and determine that the signals are identical in both universes
– you will also assess and observe the results of the trade entry fill price and the trade exit fill price and therefore you will be able to evaluate the trades in sim and live and identical in signal – but have differences due to: Latency and liquidity – resulting in slippage. Ultimately this will provide the scientific statistical evidence required to understand if the system is viable

If the live system is not winning, this is not an error, it is a fact of the process and reasons scientific ones will be identified.  This is not influenced by human desires, emotion and needs this is a scientific method and process. Frustration at not finding the correct system setup is an illogical undermining factor of laziness,  human emotion, fear and greed and should be replaced with an attitude of the feeling of being professional and making progress in the business of trading and researching – the lessons stored as data can then fed-back into the system…

It takes skill patience and a systematic process – im my estimate of the people who go by maybe as high as 90~% of traders will fail due to psychological reasons and i would suggest 99% would not even have a proper database or excel system to store and collect the facts and data in order to make empowered decisions mere chance takers and amateurs under the false premise algorithmic trading is a panacea for avoiding how to become a real trader and learn the lessons and approaches and that somehow no special skills or hard work or knowledge is required to be a success – in fact the casualties of algorithmic trading are far higher in retail trading than discretionary…

Timseries, trade frequency, proximity to exchange, server power, datafeed type, brokerage execution quality and the effects of commission are part of the equation.  The efficiency ratio will never be 100% between the live and  sim universe.

Less is more in trading – if you can get a system doing 1 to 3 trades per day – it is likely far superior to one doing 10 to 20 trades per day…

So the lesson is clear buck up and become professional or give your wallet to charity or simply invest your money via a registered investment adviser that’s 100% automated for you.  This is no place for impatient or  lazy fearful greedy people taking in by the BS adverts on the internet, and it is no place for people who cant use a computer and cannot be a self motivated Pro.


Don’t be in fear of missing the action- better to have a database of facts and stats and watch robots in the black for several weeks/months – usually i do 3months – then each iteration and feedback can be 1 to 3 weeks from pre-production to live realtime.


, , , , , , , , , , , , , , ,

Comments are closed.