I will let Tom answer this too but I would like to also. Auto trading takes the emotion out of trading. If you have nerves of steel, believe your system implicitly and act immediately, you can manual trade. I just can't do it. And you are not fast enough to catch the price when the signal appears, if you are watching the screen ALL the time. Then when you don't catch it right away what do you do? Wait and miss the trade, right. The AT part makes the trade in a fraction of a second after the signal. It has nerves of steel and no emotion.
Then there are too many times I think the market is going to do this or that and I start second guessing the system. That is a killer. I did not understand that until I had a long sting of awful trades, quit trading and read Trading in the Zone but Mark Douglas, required reading for the novice as is High Probability Trading by Marcel Link. One point Douglas makes, and I can vouch for it, is that when you get an idea about what the market will do it skews your thinking and you will not see the parts of the chart that tell you to get out or not trade. You only see what reinforces your belief system. I made a really bad trade and reviewed it with my wife later. She is very good at picking stocks, looked at the charts and said, "What the [EMAIL PROTECTED] did you do that for??? Looking back after the emotion was gone I saw what I did not see during the heat of the moment, all the other stuff that screamed "Not here stupid!" Thinking you know what the market will do often does more harm than good. Your point about futures is true and part of the clue to using them. When you are trading, small price moves make it hard for a system to make money. People that try to trade a 1 minute chart have to have a system that turns on a dime or the bid/ask slippage and commissions will eat your lunch. Now if you use an hour chart the bars are larger which makes it easier to catch a gain. Another reason is you can trade with a lot less money. If you system is good enough to trade stocks it is probably good enough for futures. Don't get the idea that futures are more volatile than stocks. Look at QQQQ and switch quickly to ER2, Russell 2000 e-mini. The charts are almost identical and the % volatility is about the same. The price range is very different. But you need a large price swing to make money. The reason people use day or week charts is to get the price range they need to make money. You can get that price variance in a few hours with futures. So you can make the same money in a shorter period of time using them, or lose a lot more if you system isn't any good. Writing an auto trading program is a LOT of trouble, is not easy and you will need to dedicate a lot of time to write and test it and test it and test it. What the market does in real time will surprise you when comparing live trades to static charts or back test results where you use ExRem to filter all the signals out and make the charts all pretty. That doesn't work in the real world. You will get buy and sell conditions you will never see and you have to anticipate and manage them. To see what I mean watch a 1 minute chart when the market is changing trends, where two MAs are very close and changing many times a second. And things don't happen immediately. When you place a order it takes time to get a reply from TWS even when using MKT orders. They may not even fill if the market is thin. Then it takes some more time for the number of position to change, letting you know you really did trade something. Your signal can send hundreds of orders during that time, in only a few seconds, and you have to block them. When I was getting started I let my system run, simulation account, and when I came back an hour later it was long 300 futures contracts and was up 75,000.00. Now why can't I make that mistake in my real account? But 300 futures contracts? I can't afford that many. I do sell a system that will trade one security. I use it with futures but the auto trading part can be used with anything. Or as a basis for your own work. Your system/indicators drive the AT part and that has to work well or there is nothing the AT part can do to help. Your system is the key ingredient and it has to be a good one, also true with manual trading. The AT just places orders and manages the status, does the trade blocking, allows you to set profit and loss stops and talks to you when a trade is made or status is returned. It can also send email if you are away from your system. Tom uses his that way. The program is about 13 to 20 pages long depending on the level of function and the indicator part is about 1.5 pages. Not the one or two page example you see on the User's KB. Be ready to spend the time to develop something that is fairly comprehensive or it will not work well and you will get disgusted with it. It is a lot of work. Learning to use it is the easy part. Once you get it working you can start it and just watch it make money, or not. Mine was up $1800 the other day using 1 futures contract, more than 200% gain, in a day. Sadly it doesn't do that all the time. But you can make money using AB. Barry --- In [email protected], "Louis P." <[EMAIL PROTECTED]> wrote: > > Hi professor, > > Is there a particular reason why you chose futures over stocks? > > And why do you use IB automatic trading if trading delay is not a problem? > It seemed to me that the more volatile a market is, the faster one must > buy/sell. > > I'm still thinking about trying IB automatic trading, but it just seems like > a hell lot of trouble to learn how to use it. Was it easy for you? > > BTW, you said Barry helped you to write the code. This must help! ;-) > > Louis > > > > 2008/7/31 <[EMAIL PROTECTED]> > > >  > > Louis, > > > > Since I only make trades 3 specific times a day, I don't worry about the > > trade delay. I do use IB automatic trading. I have just finished testing it. > > I would watch my auto trade and then trade it manually. Now I am switching > > to auto trading completely. I had Barry write the trading program for me. It > > seems to work great. However, my trading part may have a problem which > > prevents a trade occasionally, but it doesn't prevent my trading from being > > very profitable. I only trade gold futures which as you know as very > > volitable. > > > > Tom > > > > ----- Original Message ----- > > *From:* Louis P. <[EMAIL PROTECTED]> > > *To:* [email protected] > > *Sent:* Thursday, July 31, 2008 9:48 AM > > *Subject:* Re: [amibroker] Re: Anyone actually making money? > > > > To Tom: Do you use IB automatic trading? Is it possible to test such > > feature? I find that intraday trade delay is a major reason why I don't > > make any money. If I was faster I could do better. > > > > Thanks, > > > > Louis > > > > 2008/7/31 <[EMAIL PROTECTED]> > > > >> > Is it not obvious to you that some people�s personality calls for a > >> trading system, while others personality calls for a discretionary > >> approach. > >> > >> I think that is the best thing that I've read on this thread! > >> > >> I agree. I have found that I am too emotional to try day trading because I > >> make emotional decisions. That is why I developed an EOD program to trade. > >> When that was very profitable, I had my EOD program converted to a real > >> time program and auto trade. I use a dat/night chart and only trade 3 times > >> a day. Now I just watch to make sure the auto trade is working correctly. > >> > >> Tom > >> > >> ----- Original Message ----- > >> *From:* tuzo_wilson <[EMAIL PROTECTED]> > >> *To:* [email protected] > >> *Sent:* Thursday, July 31, 2008 7:31 AM > >> *Subject:* SV: [amibroker] Re: Anyone actually making money? > >> > >> --- In [email protected], "Jan Malmberg" <jan@> wrote: > >> > >> > Is it not obvious to you that some people�s personality calls for a > >> trading system, while others personality calls for a discretionary > >> approach. > >> > >> I think that is the best thing that I've read on this thread! > >> > >> Tuzo > >> > >> > > > > >
