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Humans vs. Robots

Dec 11 2013 at 21:46
70 posts
The price tag is a bit steep

You win some, you lose some.
ahuruglica (ahuruglica)
Dec 12 2013 at 05:53
852 posts
It's the golden ratio, sir.

Dec 12 2013 at 21:54
51 posts
ahuruglica posted:

I would like to have healthy discussion when manual and automatic traders share their experience.

Ardit H.

manual is like steam engine. worked well in the 1800's - 1900's. could go across the country fast.

automated system is like. plasma rocket. you can go across country fast, or go to Mars.

manual can't go to Mars.

Dec 12 2013 at 21:55
31 posts
The Gleason report, was a study (ad hock) revealing a mechanical moving average strategy which tested successful from 1963 to 1983, was less successful or not at all, from 1983 up to 2003.

This report though not scientific by any stretch, demonstrates the evolution of price behavior over time, and the likely effect technology has in that evolution. The ability of automated systems to read the market and therefore trade it, change the market. The more systems there are, the more change occurs.

Quantum mechanics famous 'double slit' test, where merely observing an event, changed the results of the event, are another example of this principle. Automated trading systems do much more than observe the market, and so all the more change it.

This cause/effect of automated systems on the market, prove that for a system to remain successful over time, it must be adaptive, to capitalize on price behavior evolution, which would occur on all time scales.

ahuruglica (ahuruglica)
Dec 12 2013 at 21:56
852 posts
I remember reading the book The Intelligent Investor by Benjamin Graham. On the last chapter he describes the market as a real person. He also names him as Mr. Market. That chapter always stood on my mind. He describes Mr. Market as a real person having real human behavior. Sometimes he is emotional, moody, euphoric and often irrational. He states that Mr. Market is to serve us, not guide us.

We humans have feeling, and sometimes feeling get in our way. But as humans we also have friends and family and we can understand their feelings too. That is why we can adapt faster to market changes.

In my opinion good EAs are not designed to replace human minds. They are just a tool to speed up the process and perform mechanized tasks like any machine or computing equipment does.

Of course, this is just my humble opinion.

dgaf (dgaf)
Dec 13 2013 at 11:13
57 posts
Imagine the market as 10 traders at a dinner table. Everyone has their own friends & enemies. And Canada neutral, just sits there and watches while the traders fight & argue about their problems.

Sleep is for the weak
ahuruglica (ahuruglica)
Dec 13 2013 at 16:17
852 posts
Imagine Switzerland fixing the market.

 Erik Dunn
Dec 13 2013 at 21:48
29 posts
dgaf posted:
Robots follow rules & trade with no emotions.

Yes, that is our main point as wel. Our system is an EA with manual oversight (same rules) -

ahuruglica (ahuruglica)
Dec 13 2013 at 21:54
852 posts

Sorry pal that is considered spam.

Anyway, the account is demo, make te same result on real account and don't use custom start date. Then you are free to come back.

Dec 14 2013 at 11:32
31 posts
Manual traders and automated systems most often Both use indicators. Indicators are a form of automation, and typically part of automated trading model logic, and manual traders technical trading plan.

The most common indicator could be the Moving Average. Moving average =Moving Mean.

It is widely acknowledged by statisticians that Mean can be distorted by outliers in the sample. Whereas Median gives a more robust measure of price than Mean.

Most charting platforms are filled with Moving Average choices, but not often Moving Medians.

The most sought after quality in an automated trading strategy is ROBUSTNESS. It increases the odds for good OOS results, and helps guard against time erosion. Manual traders also pursue a robust styles of trading.

My question is this: If Robustness is the goal of a successful trading plan (automated or manual), then why isn't the use of the more Robust indicator (Moving Median) more prevalent than Moving Average (Moving Mean)?

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