Sobering Facts about Trading and why you should consider automated trading
About 80% of people who set out to trade actively will blow most of their account within the first year. For the most part, this is due to two main reasons:
You are competing against machines which are faster, and sorry to say, usually smarter.
The machines account for over 85% of the volume on major stock and futures exchanges. Still, people will continue to try their luck as point and click day-traders. If you’re not a dreamer, and you are highly motivated and can focus for at least 3-4 hours a day, you can succeed. But most people don’t have that luxury of time, nor the personality traits necessary to win over the long term.
Enter the realm of automated trading. There are many advantages to trading this way:
The aim of this private course is to significantly reduce the time it takes to write your own successful trading systems. It will also help point and click traders improve their risk management and discipline.
We thought we would show you what you can expect to accomplish in writing your own systems. Here are a few examples of programs trading forex and CFDs. Note that these results do not include the compounding of profits, and do include the cost of margin, spread and slippage.
We will advise you that any back-tested system will never be as successful in real time trading. In fact, that is the first and most important lesson you will ever learn about trade system development. Why does it work like this?
In brief, any system that you develop on historical data will be inherently curve fit. One can design a curve fit system which will show great returns, but you can be assured that going forward, the real time results will be far less impressive, and may even lose a ton of money. In order to reduce this effect of curve fitting, we use very few entry / exit conditions, test the system on multiple related products and over different time frames. We also test each system over various market conditions going back at least a decade and then ensure we have a large number of trades to increase the confidence factor. If the results are similar across the board, then we know we have a winning trade idea. It may not make 150% per year, every year, but if it makes 40%-50% per year consistently, it’s still outperforming the vast majority of money managers by a long shot. This is possible if you put in the hours.
Adam Jagiellowicz is co-founder of Online Finance Academy. He teaches the Master in Trading Course and develops trading algorithms for forex and commodity markets.
If you represent a financial institution seeking advanced, financial market knowledge for your employees, or if you are an independent trader looking to truly master the financial markets, we have the solution for you.