Interestingly enough, if psychology isn’t a problem why trade using an algo at all?
Nothing against your style of trading, I’m fascinated with it but I’ve met guys who learned algo trading for the very reason they could not handle the psychology.
Trading is definitely a much larger percentage (80%) psychology than a strategy (20%) game.
Proven by the very fact if you gave 20 traders a simple trading strategy ~25% would make a profit… ~75% would lose money and blame the strategy… This has been shown in 100’s of threads across many trading forums over many, many years…
It’s one of the biggest controversies in the trading ecosphere… Hundreds of thousands of free strategies across the Internet… some good, some bad… Competent traders modifying bad strategies to be profitable, while incompetent traders are modifying good strategies into guaranteed loses… It’s that simple.
@Blackduck, are you serious?? 99% of Algo’s include logic for alerting traders to trading opportunities…
Why would you sit at a screen and wait for say Price to cross above or below the SMA200 on the 4 hour Time Frame? Or the USD to move above the AUD on a daily CSW Meter?.. Are you nuts!!!
Additional to opening, closing and modifying positions… all Algo’s I design include alert logic that can watch and filter every available instrument your Broker offers. XTIUSD breaks above a Multi Time Frame VWAP…
If I’m out… the logic will either email or notify my mobile device or if I’m in my office it will activate a WAV file which states Instrument, Time Frame and the time the condition is met… A few members here on BP were given this software to use and Beta test a few years back…
A computer CAN watch the market (all 28 pairs and more) and filter when a strategies criteria is met, leaving traders ample time to wander around in circles, scratch their a$$ and bump into things…
I cannot believe some of the nonsense that gets posted on these forums of late…
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Well whoop tee do for you. If you use algos brilliant. Knock your socks off. The trading platforms I use have alerts that I can set and use if I choose too.
Just because you and others may use algos does not mean I have use algos. Trade the way you want to trade and I will trade the way I trade.
Have a great day.
Blackduck
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The conversation wasn’t about using Algos to just alert you to possible trades, the conversation was about using algos to physically trade for you. I assume you are wise enough to understand that large companies use high frequency algos to trade. The paramaters of those algos are set by humans. That’s the point.
Any dumb shmuck can use the alert function on their trading platform but not everyone has the ability to CODE their trading system to trade automatically.
Get the picture!!
Blackduck
So was I…
Geese… I hope you can control that abusive streak in a Court of Law… Councillor…
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The point with algo is not only that the algo trades while you are on vacation.
The point is you can test a strategy on 4 years of market without using 4 years of real time.
Without tests how can you know if a ruleset works?
Suppose you have a stoploss at 40 pips and maybe the right value is 45 , or you ar using RSI(9) and you should use RSI(13) .
After the tests if you want you can execute the trades manually but what would be the point, once you have the code you enable the automated execution and you can play golf. 
Now we have computers but 70 years ago the first systematic traders tested on past charts manually.
The point is that a strategy needs to be tested to find that makes pips, otherwise you are probably wasting time and money with wrong rules.
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Just out of interest are you using python for your programming? Or another language ?
Shall we call it a case of miss communication.
Nothing like a strong defence of a closing argument.
No offence was intended.
Cheers
Blackduck
I am using mql4 and mql5 .
Going back to the importance of psychology.
I think everyoune knows Gordon Ramsey.
Trading is like running a restaurant, if it doesn’t work you need a chef not a psychologist.
If the restaurant doesn’t make moeny probably your rules are wrong, wrong prices, wrong menu.
Bad results can be frustrating and lead to depression, now a psychologist can be useful.
Can you find the right ruleset without algo?
Of course but it is much more difficult, it is like designing a bridge without CAD and simulation.
From my own personal perspective, I have realized that whoever came up with the term “Trading Psychology” wanted us to believe he has it all figured out (genius) If you take time to thoroughly look into the whole psychology saga, it simply narrows down to 'Discipline" If you have the discipline to trust whatever system you use to trade the markets, you have already passed the so called Trading Psychology mumbo jumbo that everyone believes is the Holy Grail. So, for simplicity, let us scratch the term psychology and replace it with discipline and that’s what constitute a large part of your trading success. (not sure of percentages, but it is high up there)
As for the strategy, it is the simplest part. The problem is that as human beings, we tend to believe that what is simple is not good enough. We tend to look for complicated strategies that end up confusing and paralyze our ability to flawlessly execute it.
If you trade in probability terms, tossing a coin can be a stress free profitable strategy if combined with a positive risk to reward ratio. But, that is simple enough for you the smart pants traders.
That IS true… I’ve experienced it myself
Would you mind sharing your simple profitable strategy?
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My strategy is simply based on the concept that the market moves from one level to the other. (S&R) I mark my support and resistance on the H4 TF.
When the market reaches these key levels, I switch down to M15 and wait for a trend change on this TF. I then trade pullbacks on M15 until the market reaches the next key H4 level, where i would wait patiently either for trend change or break out.
I used to think trading was 80% mental and you will often hear this saying. However I teach my students that the holy grail to trading is not 1 but 3 things. First good trading ideas, secondly risk-management and thirdly proper mindset. These 3 are a trinity and cannot be separated because if you lack just one of them, it will drag down the others.
You are exactly right.
Cheers
Blackduck
I think the reason why there is more importance traditionally placed on mindset is that when you refine your trading ideas down and risk management strategies, they remain mostly set as is but the mindset is something you have to constantly maintain every time you trade.
I think trading is more like tennis - all you need to do is hit the ball on the bounce.
But a million things can go wrong in your head before you do.
Top flight tennis players, or any elite sports men or women are elite because they have learned how not to choke under extreme pressure
That’s what separates them from the average players.
Trading is the same - at the end of the day most systems can be made profitable but (imo) but it’s performance anxiety that messes most up
I can see the point you are trying to make but I can assure you there is a difference between hitting the ball and hitting the ball WELL. Good technique plays an important role.
Elite players have the edge, yes, because they know how to handle pressure but they are also elite because they have drilled their technique to such a high level that it is ingrained in the subconscious that it becomes natural. Like driving a car, can be done on auto pilot.
If you can get your trading mindset to that level where you see trades in an instant you then can say you are an elite trader.
Cheers
Blackduck
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