Discussing the article: "Brute force approach to patterns search (Part V): Fresh angle"
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Check out the new article: Brute force approach to patterns search (Part V): Fresh angle.
In this article, I will show a completely different approach to algorithmic trading I ended up with after quite a long time. Of course, all this has to do with my brute force program, which has undergone a number of changes that allow it to solve several problems simultaneously. Nevertheless, the article has turned out to be more general and as simple as possible, which is why it is also suitable for those who know nothing about brute force.
I started thinking about the variety of paths that lead people to success or drive people into dead ends while they try to make money using algorithmic trading. In theory, it turns out that there are several paths:
The first approach is the most common among stubborn people. In fact, it is useful for people like me in terms of letting go of ambitions and false hopes. It does not sound like much, but it is actually very beneficial for your future. This approach takes a lot of effort and time, and if you do not stop at some point, you may become a Ph.D. in forum sciences with all the ensuing consequences. I think, no clarifications are needed here. Everyone understands my sarcasm perfectly well. Nevertheless, this approach allows you to learn the theoretical information that I learned in my time, and its value is absolute. The main thing is to stop in time. Of course, if we weigh the time spent and the results obtained, the outcome will be far from perfect.
The second approach is much simpler and, in fact, much more efficient in terms of time spent, because there is much less effort involved and all you have to do is convince people that you are successful. Everything is in our heads, and at some point I realized that this works great. People tend to trust beautiful wrappers. There is no place for morality or anything else here. The result is all that matters. This may seem cynical, but the whole world lives like this. All you need is to create a certain image. You may use martingale, averaging or other trading techniques. They are quite sufficient to create such an image.
I believe, the third approach is wise because in this case the effort spent will be minimal, but your picture is real. With proper implementation of this approach, there will be no negative aspects, although there will be some disadvantages. The most important thing needed to implement this approach is knowledge. If I had not had the experience that I have now, then I would not have been able to take advantage of it even with the right attitude and a rational and balanced approach to achieving my goals.
As for the fourth approach, I do not know if anyone practices it. In theory, it should take less time, but I cannot say anything about its efficiency. In general, everything is possible, but I do not think this approach is the most effective to put it mildly. Rather, it is better to use it in combination with the previous one, as this will increase the variability of your trading and increase the chances of receiving more consistent trading signals.
The fifth approach can only be effective if you have a lot of ideas and constantly work on them, however, it is much better than the first one, even if each team member uses a head-on approach. But it just so happens that most developers of trading systems are narcissistic loners, and only a few can assemble such a team and, most importantly, arrange its work. I know there are such teams, and they are quite successful. It is good if you find yourself in such a team working together to develop profitable algorithms. The advantage is that in the end, the total quality and quantity of developments can play a decisive role and make it possible to create a competitive product.
Author: Evgeniy Ilin