The philosophy of algotrading - page 11
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If you see algotrading as a kind of task, a workout for the mind, then it becomes very useful and interesting in itself, like chess, for example.
I understand algorithmic trading as trading by the rules, not by a hunch. According to the methodology, if it happens this way - do this and so on. The methodology is good in theory, but in manual trading it starts to change as you trade. It is difficult to close a large loss. And even a small one. There is a massive overhang of losses, quantified, for example, by the difference in average entry prices of bulls and bears in their total positions http://www.mt5.com/ru/market_inside/forex_average_trades_levels. Entered several times over the last 2-3 years, this difference was 80-150 pips (4th digit) for EURUSD. There are still typical situations when a well-designed methodology is not implemented by its author or adherent. If we implement a method by means of a program and do not interfere with its operation, the results should be better or less loss-making in comparison to manual trading. Algorithmic trading helps to achieve the goals set by a trader, and thus it justifies itself.
The goals are set by a human being. What is useful is what meets his needs. And they can be very diverse. No one will doubt that a person has a need to play a game. The same chess (and cards, and computer toys, and...) appeared not because of any need for mental gymnastics. People wanted to compete. Today the word combination "Forex trading" is hardly ever used, in 2006 Forex Club had a license of a bookmaker, that is the organizer of games with the help of betting on the results of competitions. The emergence of new games is based not only on the desire to compete, but also on the need to experience excitement. I would not call casino-goers greedy, but rather the opposite.
Two examples come to mind. Ten years ago, on pension payment day, old ladies (more often old ladies, old men went to a liquor store first) queued at the slot machines to toss five-ruble coins a few (or a few dozen, a few hundred) times. Some were already in tears. But again they got up in this queue. The second example. At the seminar "What is Forex" in December 2006, during the break the participants started to talk about the risks they were taking. They had never traded before and neither had I. The vast majority were of the same opinion: "What if you're lucky! The composition of the audience was characterised by lack of work: students, young professionals, pensioners and the pre-retirement age.
Such greed. That kind of greed. Gambling for money remains attractive to people. Lotteries, including state-run ones, operate on this need. I would not say that VCs registered on almost deserted islands and other offshore locations participate in the economy of their creators' country of origin with their taxes. Retail forex trading satisfies people's need, namely their excitement, so it is useful. Gambling at first glance does not seem to be a very useful human trait, but it is. In Germany, the public employment services have now started offering women to take up prostitution. By our standards, it would be a shameful occupation, detrimental to society. But the need exists and the society has started to organize it, to control the quality of the services. So the Russian law on regulation of forex has (at least declaratively) the same aims - to regulate, control, tax.
I understand algorithmic trading as trading by the rules, not by a gut feeling. According to the methodology, if it happens this way, do that, and so on. The methodology is good in theory, but in manual trading it starts to change as you trade. It is difficult to close a large loss. And even a small one. There is a massive overhang of losses, quantified, for example, by the difference in average entry prices of bulls and bears in their total positions http://www.mt5.com/ru/market_inside/forex_average_trades_levels. Entered several times over the last 2-3 years, this difference was 80-150 pips (4th digit) for EURUSD. There are still typical situations when a well-designed methodology is not implemented by its author or adherent. If we implement a method by means of a program and do not interfere with its operation, the results should be better or less loss-making in comparison to manual trading. Algorithmic trading helps to achieve the goals set by a trader, and thereby justifies itself.
The goals are set by a human being. What is useful is what meets his needs. And they can be very diverse. No one will doubt that a person has a need to play a game. The same chess (and cards, and computer toys, and...) appeared not because of any need for mental gymnastics. People wanted to compete. Today the word combination "Forex trading" is hardly ever used, in 2006 Forex Club had a license of a bookmaker, that is the organizer of games with the help of betting on the results of competitions. The emergence of new games is based not only on the desire to compete, but also on the need to experience excitement. I would not call casino-goers greedy, but rather the opposite.
Two examples come to mind. Ten years ago, on pension payment day, old ladies (more often old ladies, old men went to a liquor store first) queued at the slot machines to toss five-ruble coins a few (or a few dozen, a few hundred) times. Some were already in tears. But again they got up in this queue. The second example. At the seminar "What is Forex" in December 2006, during the break the participants started to talk about the risks they were taking. They had never traded before and neither had I. The vast majority were of the same opinion: "What if you're lucky! The composition of the audience was characterised by lack of work: students, young professionals, pensioners and the pre-retirement age.
Such greed. That kind of greed. Gambling for money remains attractive to people. Lotteries, including state-run ones, operate on this need. I would not say that VCs registered on almost deserted islands and other offshore locations participate in the economy of their creators' country of origin with their taxes. Retail forex trading satisfies people's need, namely their excitement, so it is useful. Gambling at first glance does not seem to be a very useful human trait, but it is. In Germany, the public employment services have started offering women to work as prostitutes. By our standards, it would be a shameful occupation, detrimental to society. But the need exists and the society has started to organize it, to control the quality of the services. So the Russian law on regulation of forex has (at least declaratively) the same aims - to regulate, control, tax.
Not all human needs should have been met. And that is not what it was really about.
But if we are talking in the same vein as you say, then all kinds of lotteries, casinos, financial markets can be regarded as a natural way of regulating surplus money in the population and thinning people (suicide after selling a flat to play the slot machines or Forex - cases are not at all uncommon). Thus fools and sick on the head (losomaniacs) become less. For example, one can often see dogs and cats waiting patiently for the green traffic light at the crossroads. This does not mean that the animals that live in the city have become smarter over time. Simply, those who can not give orders to traffic lights, die under the wheels of cars thousands of daily around the world (I've knocked down about 10 dogs in 20 years of experience, by accident of course), and then remain only the smartest of all (rather than wiser stupid). Such "traffic lights" are gambling for people, no one forces to play, as well as to comply with traffic lights - everyone has his own way...
Not all human needs should have been met. That's not really what I was talking about.
But if to speak in that way, in general, different kinds of lotteries, casinos, financial markets can be considered as a natural way of regulating population's surplus, and thinning of people (suicides after selling a flat for gambling in arcades or Forex are not at all uncommon). Thus fools and sick on the head (losomaniacs) become less. For example, one can often see dogs and cats waiting patiently at the intersection for the green light. This does not mean that the animals that live in the city have become smarter over time. Simply, those who can not give orders to traffic lights, die under the wheels of cars every day around the world (I've knocked down about 10 dogs in 20 years of experience, by accident of course), and then remain only the smartest of all (rather than wiser stupid). Such "traffic lights" are gambling for people, no one forces to play, as well as to comply with traffic lights - everyone has his own way...
Not for the purpose of trolling, but rather to reconcile logical inconsistencies, I want to point out the contradiction in your point of view. The first part of your point of view was stated in a previous post, while the second part you state by commenting on Vladimir, and you do not deny it, but rather confirm it.
And so:
Developing logically the point of view of your opponent in the quote above, you are actually saying that financial markets are in the same line with lotteries and casinos, and serve for "regulation of surplus funds from people" and "thinning out of people (fools and sick in the head)", which, you agree, by definition makes this business dishonest and aimed at taking money from ordinary traders.
However, in your previous post you said the following:
"And as for the "parasitism" of electronic bidders, this is probably one of the fairest ways of trading in general, as it does not involve eyewashing as a mandatory detriment of modern economics in the form of advertising. In addition, bidders have a level playing field (brokers, market makers, etc. are not taken into account as equal participants). "
So which is really your position on financial markets and trading in general, the first or the second?
P.S. By the way, how do you think people can earn money and help someone with their kidneys, if by trading in the market they are ripping someone off. Losing traders get into debt and some of them may decide to sell their kidneys to get out of it. After that, they start having health problems and those who led them to this condition find kidney donors for them to save their lives. However, these kidneys are from other traders, novices.
It's like if on your way to work to rescue animals, you keep crushing them on the highway.
Andrey Dik:
I will add to the above that there is a lot of advertising of financial markets, brokerage companies, brokers. There is a lot of "ochkovypragmentation" in the form of training courses on various profitable strategies, approaches, etc.
But I think that all dishonest in this area does not apply to an ordinary trader. He is not guilty of anything and he is just trying to make his way in life.
Therefore, his occupation is honest and noble, not parasitic. He strains himself, tries to understand the market, learns and takes risks.
Let the market infrastructure may not be interested in his success (obviously, their interests are contradictory), but the trader's goal is to earn despite all obstacles at the expense of his abilities, vision, luck.
A noble goal?
Above, I was exaggerating when I said that someone is ripping someone off and leading them to sell their kidneys. Naturally, every trader is responsible for themselves and must know when to stop. If someone is selling a kidney because of his game, he is to blame himself and this is his decision.
It is ridiculous to link winning and someone's decision to sell a house or a kidney. Someone can really save someone's life with the money he earns, and someone else wastes the money in another game or club.
All of this is not a criterion for assessing the moral side of market trading - this is a matter of psychology, personality, character, people's vices ...
These are moral and ethical issues, and do not directly relate to trading.
It is just that in trading, as in everything, you need to know the measure.
Morally, trading is neutral.
It is a process of redistribution of funds between market actors, technically supported by market infrastructure.
The meaning of the process is public support and material sponsorship of the most promising projects and activities of various companies and banks.
This process plays a huge role in the economy, and we, the traders, are involved in this process.
Consciously or through sheer greed, complacency or excitement, we are moving the economy by moving our money around in a huge vortex, where it will eventually find a home in the pockets of those who are really making a difference in our social lives.
And if one of us gets to the point where he or she is deciding to do something, the money will inevitably end up in their pockets.
And this depends on our self-awareness, education and work.
This is the point and essence of social redistribution of money.
Morality has nothing to do with it.
p/s Just as it has nothing to do with construction sites or factories where accidents happen.
Not for the purpose of trolling, but rather to reconcile logical inconsistencies, I want to point out the contradiction in your point of view. The first part of your point was stated in the previous post, and the second part you state by commenting on Vladimir, and you do not deny it, but rather confirm it.
And so:
Developing logically the point of view of your opponent in the quote above, you are actually saying that financial markets are in the same line with lotteries and casinos, and serve to "regulate surplus funds from the population" and "thinning out the people (fools and sick in the head)", which, you agree, by definition makes this business dishonest and designed to take money away from ordinary traders.
However, in your previous post you said the following:
"And as for the "parasitism" of electronic bidders, this is probably one of the fairest ways of trading in general, as it does not involve eyewashing as a mandatory detriment of modern economics in the form of advertising. In addition, bidders have a level playing field (brokers, market makers, etc. are not taken into account as equal participants). "
So which is really your position on financial markets and trading in general, the first or the second?
P.S. By the way, how do you think people can earn money and help someone with their kidneys, if by trading in the market they are ripping someone off. Losing traders get into debt and some of them may decide to sell their kidneys to get out of it. After that, they start having health problems and those who led them to this condition find kidney donors for them to save their lives. However, these kidneys are from other traders - newbies.
It's like if on your way to work to rescue animals, you keep crushing them on the highway.
My point is my first post. And my second post is how one would look at trading if I were not me, for example.
I would like to add to the above-mentioned that there is a lot of advertising for financial markets, brokerages, brokers. There is also a lot of "goggle-eyed advertising" in the form of training courses on various profitable strategies, approaches and other things.
But I think that all dishonest in this area does not apply to an ordinary trader. He is not guilty of anything and he is just trying to make his way in life.
Therefore, his occupation is honest and noble, not parasitic. He strains himself, tries to understand the market, learns and takes risks.
Let the market infrastructure may not be interested in its success (obviously their interests are contradictory), but the aim of a trader, is to earn despite all obstacles due to his abilities, vision, luck.
A noble goal?
We are talking about trading but not about brokerage or bookmaker's offices, right? And we are talking about trading in its purest form, when trading is done in one's own name and with one's own money - yes, everything is clean here, there is no cheating. This is no worse than selling potatoes at the market, does anyone take someone away when he sells/buys potatoes? And if you do not know how to do it, someone will break a glass figurine and cut his hands.
Above, when I said that someone is ripping someone off and leading them to sell their kidneys, I was exaggerating. Naturally, every trader is responsible for themselves and must know when to stop. If someone is selling a kidney because of his game, he is to blame himself and this is his decision.
It is ridiculous to link winning and someone's decision to sell a house or a kidney. Someone can really save someone's life with the money he earns, and someone else wastes the money in another game or club.
All of this is not a criterion for assessing the moral side of market trading - this is a matter of psychology, personality, character, people's vices ...
These are moral and ethical issues, and do not directly relate to trading.
It is just that in trading, as in everything, you need to know the measure.
That's my point. It all depends on the purity of people's motives and goals in any activity. An anesthesiologist injects drugs into people every day, but he saves lives and relieves suffering, and a drug dealer does the same thing and destroys the poor people without giving them a chance. Therefore - It all depends on the purity of motives and goals of people in any activity.
In terms of morality, trading is neutral.
It is a process of redistribution of funds between the subjects of the market, technically supported by the market infrastructure.
The point of the process is public support and material sponsorship of the most promising projects and activities of various companies and banks.
This process plays a huge role in the economy, and we, the traders, are involved in this process.
Consciously or through sheer greed, with equanimity or excitement, we drive the economy, putting our money into a gigantic vortex, where it eventually finds a home in the pockets of those who really make a difference in our social lives.
And if one of us, gets to the point where he/she starts to decide something, then the money will inevitably end up with him/her.
And this depends on our self-awareness, education and work.
This is the point and essence of the social redistribution of money.
Morality has nothing to do with it.
p/s Just as it has nothing to do with a construction site or a factory where there are non-accidents.
Well, that's actually what I said in my first post.
Well, I hope we've gotten to the heart of the matter. If so, we can move on to another topic.
Although, some may disagree...
This is our future.
Not only is time moving forward, but it's also speeding up! )
Sergey Kriushin:
If you make a human being robot-like, he's probably more likely to go insane... or throw himself at everyone like a zombie - no sense of fear, no feeling at all...Yes, imagine a cyborg with transplanted kidneys generated in a factory producing kidneys from stem cells, ovaries from a young monkey, instead of legs, prosthetic limbs enabling him to run at 300-500 km per hour, where his heart is, blood pump with electronic control.... in the head, just below the ear, there is a micro-junction USD-32567 for pumping knowledge. Hundreds of processors added to the cranium for faster decision-making...
and from biology, the bare minimum is left with upgrades...