I noticed that some traders who are preparing themselves for live trading and focus solely on trading via intraday automated trading systems (ATS) tend to underestimate the psychological aspects of this style of trading. This underestimation has its logic – these traders learned from other experienced traders how to eliminate mistakes through automated execution of…
In this chapter I would like to focus on one of the biggest myths and misinformation about algorithmic trading that exists among novice traders. I am in contact with lots of beginners who are focused on discretionary trading and it is amazing how often they demonise automated trading systems (ATS). Yet I dare say that…
This chapter´s content follows the previous chapter in which we explained what the Cluster Walk Forward analysis (CWFA) is. Let´s recall that in the ideal case we are looking for a CWFA where all 30 Walk Forward analyses (WFA) pass the defined test criteria. In such case, the overall results for the given WFA include a…
In the previous chapter we explained what the Walk Forward Analysis (WFA) is. Now we are going to add a much more complex analysis – the Cluster Walk Forward Analysis (CWFA). CWFA is a very sophisticated tool that helps us determine whether the automated trading system (ATS) is really robust, i.e. able to generate profits…
I have met quite many traders lately who had very interesting ideas regarding building of automated trading systems (ATS) for algorithmic trading. Unfortunately, I often feel that many traders rely solely on the basic backtest result, as in the example of a trading system and its equity curve in Fig. 1. These days, there are…
We will now focus on the EasyLanguage programming language (see Fig. 1) which is part of the TradeStation software platform. Even its name implies that it is a programming language for “non-programmers”. Its biggest advantage is that if you know the basics of English and you are familiar with conditional functions in Microsoft Excel, you…
Many discretionary traders (manual style of trading when you open and close positions solely on the basis of your own opinions and analyses, without assistance of a programmed code) demonise and execrate Automated trading systems (ATS). The main argument of discretionary traders is that a programmed code can never accurately identify certain nuances in markets…
Anyone who wants to start trading on the markets exchange should first ask himself the question: “What is the main motivation of people who start with broker-mediated trading?” Most of you would surely reply: the maximum possible appreciation of my savings with the maximum saving of time. And I definitely agree. Many of my readers already…
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