Systems Trading Advice

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Traders want to be profitable and consistent winners in the market, and above all they all want to develop their own system. However, even after years of education, refining of their methodology, and simplifying the systems to a small number of indicators, traders still struggle. Why?

I have three simple explanations;

1)    Traders can’t stop interfering while specifically trying to call the highs and lows of the market. So essentially when they get a “short signal” at some all time low, they are hesitant on pulling the trigger with their own system.

2)    Traders start to doubt their system when they get a few losing trades in a row, failing to realize that the number of losing trades can exceed the number of winning trades.

3)    Traders don’t trust their system after a prolonged period of draw-downs, again failing to realize that the best systems would go through drawdown.

What is the solution? Today with the advent of algorithmic trading, traders can automate their systems with a number of vehicles such as Ninja Trader, Strategy Runner, and Trade Maven, just to mention a few.   All these vehicles could accommodate algorithmic trading with features such as trailing stops, bracket trading, once order cancels other, etc.  As such, no human intervention is necessary and traders could trade their system “emotions free”.

Also, there are many systems developers who sell or lease their product and could be used by traders and investors alike.  You could choose one based on your risk capital and risk tolerance.  Keep in mind, trading always involves a substantial risk of loss. Past performance is not indicative of future results.

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