|
PureBytes Links
Trading Reference Links
|
Tim wrote:
> If you read Gabe's statement above, I beleive he is saying that
> given today's technology, someone with coding expertise could
> investigate the tools I use to trade and replicate my trading
> success and style. I am not willing to go down that road with what
> I know about trading. By the same token, if you showed me, a
> discretionary trader, exactly how a complex trading program or
> indicator worked, I'm not willing to say that I could replicate the
> system's or indicator's success. I don't know that either is easily
> transfered from human discretionary trader to code on the one hand
> or from code to human discretionary trader. I'm not willing to say
> it's simply a matter of being able to 'identify, quantify and
> systemize.'
My 2 cents: I believe that most techniques used by discretionary
traders COULD be "identified, quantified, and systematized." But
just because it's *possible* doesn't mean it's *easy*.
* Identifying is probably the hardest part. From my brief
stint in AI and expert systems, I know that the hardest thing
about writing an expert system is cracking open the expert's head
and finding out HOW he solves problems. Very often the expert
has no idea how he solves the problem -- it's not a conscious
decision tree for him. He just encounters a problem, and the
right answer pops out of the ether. That's hard to do, and
it's virtually impossible to know whether you've collected
the "full" set of rules that the expert draws on.
* Quantifying, if I understand what you mean, is also a major
undertaking. I don't believe most discretionary traders normally
think quantitatively. They don't compute moving averages and
RSI's in their heads. (They may make use of indicators like
that, but that's a minor part of their process.) They just look
at the charts and see patterns that "look" right. That sort
of pattern recognition is very difficult to computerize.
* Systematizing, i.e. programming the system you quantified in
step 2, is a "simple matter of programming." Hah hah. :-)
I believe you couldn't program 99% of such systems in
TradeStation (at least not 4.0), because of its many limitations.
But it can be done with suitable tools.
So, I believe it would be possible to reproduce on a computer,
reasonably accurately, the trading process of a successful
discretionary trader. However, it's likely to be a HUGE project, one
that could only be undertaken by a large trading house. And in fact
I suspect quite a few of them have been doing so for some time.
Gary
|