Automated trading systems cannot work. Discuss!

[DangerBoy]

ok great, that is very similar to a method I use in forex where i will use the average 14 day ATR of a crossrate to determine how much profit potential is left for the day before entering a trade.

In strats looking to capture main moves of the day it is a no-brainer that once the move has been done then stop trading. I came across a chap the other day that said that he applies this to a 20pip scalping strat and once the 20pip target was achieved he stops trading for the day.

I couldn't understand the reasoning behind this and so I thought I was overlooking some sort of statistical probability that means the less you trade the more profitable your strat is likely to be.

I see we are on the same page though.

Thanks
Ross

[zordan]

I have been using "vbosystems" (look it up on google) in 2013 with good results. of course you need to make sure the systems you choose have not only good backtesting history but use a strong method for testing out of sample under different market scenarios...

[tradetree]

Excellent results

www.threefoldmarkets.com systems has really great results. The developer has been privately trading his systems for 4 years, and then started offering them for others to trade.

There are a few key points to keep in mind. You have to mix instruments and systems. Any single system can fail or go through a tough period just like a discretionary trader can. Also, many automated systems are simply over-fit to the history. You have to find people that trade their own money and have a winning history. Threefoldmarkets does, and the broker they trade through can back this up (at least they did for me at Optimus Futures).

Also, regarding why anyone would lease or sell winning systems, it is because trading involves risk, and that is the barrier to entry. That risk is there even for a very successful system. There is no such thing as a "holy grail" system. There is always risk. So it is a wrong argument to say there must not be winning systems out there. You have to allow for risk, and most people fail because they find bad systems or can't handle the risk and drawdown. It's been working great for me for over a year now!