Thread: userque's Account talk

Originally Posted by RealMoneyIssues

So, how does HFT factor into this?

IMO, off the top:

1. The algorithms are designed by humans. Computer chess game algorithms still have to told certain things...like that the Queen is more valuable than the Knight, and by how much. That controlling the center of the board is good. Etc. There is a human element to all A.I....for now.

2. The algorithms are trading against humans. If humans are repeating patterns, it stands to reason that the machines will do likewise.

What would be interesting is: what would charts look like if no humans traded...only machines.? Would there still be patterns? I think maybe more so due to less emotion. And if so, by this reasoning, HFT might make the patterns more robust/tradable.?

Good question.

Straight Line Approach, The


Keep Your Hands And Feet Inside The Stochastic
Until Your Oscillator Comes To A Complete Stop

Charts are among the most mysterious aspects of the financial markets that the beginning
trader will face. For many people, charts look like a child's experimentations with a
Spirograph. But charts are really nothing more than stories, using symbols rather than
words, like algebra uses symbols instead of numerals (yes, I know that words and numerals
are technically symbols, but you know what I mean). They are a bit like the storyboards
used in producing movies and cartoons, except we use dots and lines rather than drawings
or photographs. Understanding the stories these charts are trying to tell can make you
money. Or, at the very least, save you what could become a great deal of money. ...

194840d1437936334-if-you-can-draw-straight-line-you-can-become-successful-trader-slacondt2.pdf - DocDroid

User 1a2b3cppp posted this in another forum:

There is no course of instruction that anyone can give you.

Nearly every trader follows the same path on his own.

First you will learn about indicators and think they are the best thing ever. You will see all these instances where they would have been profitable. Then you will realize they don't work either alone or in any combination.

Then you will look at other price pattern things like head and shoulders, cup and saucers, etc., and then you will realize those are no more reliable than indicators.

Then you will get pissed and give up for a while.

Then you will read about some other nonsense like Fibonacci levels or magic harmonics or whatever, but you will also realize that those don't seem to work in real time (although they sure look nice in hindsight!).

Then you will hear about "price action" but you will struggle for years to even get a definition of what that means despite hearing traders who claim to be profitable talking about how they only use price action.

You will encounter dozens of traders online who claim to be profitable yet never provide any proof and who also cannot give you direct answers to questions you may ask. They will also never make calls in real time, but they will be sure to post winning charts after the fact showing how they entered exactly at the bottom and sold exactly at the top! In the beginning you will see them as gurus, but eventually you will realize that 100% of them are just trolling people online and your BS detector will develop nicely as a result.

You will develop your own ideas... you will develop your own indicators, they will work better than the commercial ones you learned about when you were a beginner, but they still won't be profitable over time.

You will hear about things like grid trading and think holy crap... that is the holy grail... and then you will learn about the people who blew their account doing it.

Somewhere along the line you will get the genius idea that all you have to do to make money is take a losing system and reverse the buy and sell signals. You'll have dollar signs in your eyes. And then you will test it and realize that the opposite of a losing system is quite often still a losing system. This will cause you much internal struggle as it will make no sense.

Trading seems to be a field of stripping away what doesn't work. You must go through it yourself. I can tell you that I've backtested every commercialy available indicator and system in every possible combination and with every possible parameter and none of them is profitable, but you will not actually believe me when I tell you because you want to believe that something works. You must go through that path alone. It takes months/years before you are finally convinced that "nothing works" and once you finally realize that, THEN you have a framework in your mind for how to begin designing a system that may be profitable.

If you make it that far, you have a chance to be successful. If not, you will be like every other person who is still searching for that holy grail indicator, falling for the hype, and wasting their money on "gurus" who don't teach them anything quantifiable and indicators that don't work, as well as watching their account shrink from losing trades.

It's best if you use a practice account during these steps. Once you are consistently profitable for 3 months on a practice account, then you can start using a real account with small size. Beware, trading with a real account feels entirely different.

The Six Stages of a Trader [Link]

Six Stages Of A Trader

Very interesting description of how traders evolve over time. The pieces of advice Bo Yoder and Vadym Graifer give at the end of the article are spot on. Definitely worth reading as every trader worth his salt can relate to all the different stages. Enjoy.

Published August 1, 2015 by Bramesh

Stage One: The Mystification Stage ...

6 Stages Of A Trader | Bramesh Technical Analysis

Originally Posted by userque

User 1a2b3cppp posted this in another forum: "Trading seems to be a field of stripping away what doesn't work. "

Amen.

Originally Posted by userque

The Six Stages of a Trader [Link]


6 Stages Of A Trader | Bramesh Technical Analysis

Practically everyone goes through this, but few understand that this is all part of the win-lose cycle. They do not yet understand that loss is an inevitable part of any system/strategy/method/whathaveyou, that is, there is no such thing as a 100% win approach.

...

He accepts fully the responsibility for his trades, including the losses, which is to say that he understands that losses are inevitable and unavoidable. Rather than be thrown by them, he accepts them for what they are, a part of the natural course of business. He examines them, of course, in order to determine whether or not some error was made, particularly one that can be corrected, though true trading errors are rare. But, if not, he simply shrugs off the loss and goes on about his business. He understands, after all, that he is in control of his risk in the market.

He doesn’t rant about his broker or the specialist or the market maker or that vast conspiracy of everyone who’s trying to cheat him out of his money. He doesn’t attempt revenge against the market. He doesn’t fret. He doesn’t fume. He doesn’t succumb to hope, fear, greed. Impulsive, emotional trades are gone. Instead, he just trades.

Amen

Good stuff!

Originally Posted by userque

User 1a2b3cppp posted this in another forum:

...and that is all you need to know Grasshopper.

My Thoughts...

Tried all sorts of machine learning schemes (sometimes, to my detriment ) to trade the markets. I think I've finally satisfied most of my curiosities and am ready to 'settle down' and stick to my 'last, best, and final system.'

The only other 'thing' I can think of is to brute force every parameter and variable, of every machine learning algorithm I can. This will require flexibility only provided by a proper programming language. After much research, I've chosen Python (instead of R, etc.). It'll take a couple of months to get it up and running as I'm new to Python; then it'll take however long it does for the brute forcing to complete.

Some non-programming packages do something similar (Knime, RapidMiner, Weka, etc.), but not to the degree I'm talking about doing.

I'm out of shortcuts.

Here's what I believe:

Market price action is composed of both randomness and patterns. Pseudorandomness. This is the same sort of randomness generated by Vegas slot machines and computers in general. The patterns are created by repeating groups of random price actions. Simplified:

[random group of price actions][different random group of price actions][third random group of price actions][...etc...][repeated group of random price actions]

I believe ML algorithms get choked up trying to make sense of the random price actions. Just as a ML algorithm will try to predict lottery numbers...but fail. The signal to noise ratio is too low for ML algos.?

My final system doesn't try to make a mathematical model of price action--as traditional ML does, it only tries to detect patterns.

Originally Posted by userque

My Thoughts...

Tried all sorts of machine learning schemes (sometimes, to my detriment ) to trade the markets. I think I've finally satisfied most of my curiosities and am ready to 'settle down' and stick to my 'last, best, and final system.'

The only other 'thing' I can think of is to brute force every parameter and variable, of every machine learning algorithm I can. This will require flexibility only provided by a proper programming language. After much research, I've chosen Python (instead of R, etc.). It'll take a couple of months to get it up and running as I'm new to Python; then it'll take however long it does for the brute forcing to complete.

Some non-programming packages do something similar (Knime, RapidMiner, Weka, etc.), but not to the degree I'm talking about doing.

I'm out of shortcuts.

Here's what I believe:

Market price action is composed of both randomness and patterns. Pseudorandomness. This is the same sort of randomness generated by Vegas slot machines and computers in general. The patterns are created by repeating groups of random price actions. Simplified:

[random group of price actions][different random group of price actions][third random group of price actions][...etc...][repeated group of random price actions]

I believe ML algorithms get choked up trying to make sense of the random price actions. Just as a ML algorithm will try to predict lottery numbers...but fail. The signal to noise ratio is too low for ML algos.?

My final system doesn't try to make a mathematical model of price action--as traditional ML does, it only tries to detect patterns.

Just stumbled on your thread and saw you talking about machine learning. I have gotten interested in that lately and so you got my attention. I'm taking a class on ML on coursera from Stanford. I'm just near the beginning but seem interesting. They use matlab/octave for programming. Lots of matrix algebra so far mixed with a little programing at this point.

What is your background in ML? or AI ? any suggestions where I can go to learn more? I have programming background (C.S. degree years ago) but not professionally. I have done a little in Python. Have you ever used Clojure?

Originally Posted by clester

Just stumbled on your thread and saw you talking about machine learning. I have gotten interested in that lately and so you got my attention. I'm taking a class on ML on coursera from Stanford. I'm just near the beginning but seem interesting. They use matlab/octave for programming. Lots of matrix algebra so far mixed with a little programing at this point.

What is your background in ML? or AI ? any suggestions where I can go to learn more? I have programming background (C.S. degree years ago) but not professionally. I have done a little in Python. Have you ever used Clojure?

Excellent! Keep us posted.

I've had some college towards EE. I work with electronics. My hobbies include ML and AI.

I learned more by doing a lot of reading of academic papers. You can restrict google to .edu domains to find them more easily.

EDIT: What exactly are you interested in learning more about? I may be able to point you to something I've already found.

Haven't used Clojure. So far, including stuff I've forgotten and only know a little about : BASIC, Z-80 Assembler, MS-DOS, FORTRAN, QBASIC, ABASIC?, C++, Visual BASIC, VBA, AutoIt, Sikuli.

Python is not as fast--execution-wise, but it seems to be the way to go as far as versatility and development speed, etc.