Hello
I’m not a newbie to forex, but I am to these forums.
I started trading forex a couple of years ago, manually trading a system that I read about in a book. After a few months with little success, I realised that I had no objective evidence that the system even worked, other than the author’s assurances. I began to manually and painstakingly back test the system on historic data, scrolling through charts one bar at a time and recording the system’s trades in a spreadsheet.
I came to three main conclusions from this process:
- The system would blow up my account if I continued to trade it.
- Evidence as to a system’s profitability is critical prior to trading it with real money.
- Manual back testing is a major pain in the butt.
Armed with this knowledge, I learned to program trading systems and dived deep into the literature on trading systems development and evaluation. Fast forward a year or two and I now develop, test and trade my own algorithmic trading systems. In general, I use the approaches espoused by Robert Pardo, Ralph Vince and David Aronson, but I am always reading about different ideas and approaches and have an open, if somewhat critical mind.
I am happy to say that I launched my first algorithmic system a little over two months ago, and so far results are good (and more importantly, in line with historical test results). I currently trade two of my systems live and am in the final stages of development of my third (hopefully!) profitable system. I hope to add many more to my portfolio over time.
I joined the forum for a couple of reasons:
- To share what I’ve learned about trading in general, and in particular about algorithmic system design. I learned some lessons the hard way and it would be nice if others could learn them in a more pain-free manner.
- To discuss ideas around algorithmic system development, to find out what others are doing in this regard and to brainstorm ideas with like minded folks.
Looking forward to the discussions.