Why Automated Trading Systems Don't Work

Bots are not created from thin air, they are created by programers with trading background and with pasion for the business and wining money soo when they create a bot they will test it and will only happen 2 things the most common is the bot won't work long term and be a fail soo it will be released to the public or sold to retail traders that will get choped up by the market and second thing that can happen and way way way less likely the bot works gives consistent profits with good risk management and consistency and the programer will obviously won't even give it to his mother and will try to squeeze it dry and see if it fails or not if the bot happens to be working consistenly for years on end he will keep using it if after 5 years sudenly the bot stops working correctly and stops being profitable he will release it and sell it and that's what happens with bots soo yeah unless you program it urself and test it with almost 100 % certainty is not a working bot. People is too dumb and inocent that's why soo many people becomes rich not from trading but just from selling crab to dumb people that will pay fortunes for that crab thinking is gold like the world is a wonderfull place where people will give yoy gold for cheap.

bbecause is nice guy, that's wy :)

He is right that no-one sane would sell an effective algo system at a retail price. Simply doesn't happen. There are many well-understood ways to fake the results that they claim to show, so please don't fall for it.

But his claim that algo trading simply doesn't work is profoundly untrue. I know from personal experience and from the audited data of small fund managers. It's possible for retail traders to beat the institutions by a distance by using nimble strategies that exploit edges too small for a larger account to engage with.

So if you are a retail trader with a basic understanding of programming and stats, get to work on your own personal system. It's not easy, but it's certainly doable. My personal advice is to focus on simple price action rather than fancy quant-style stuff. Much easier, and in my experience much more profitable. I'm in touch with extremely successful private traders who agree.

When an algo trading system is indeed working (profitable), somebody will sell you (instead of locking it up). Why ? because that working algo is NOT (and NEVER) perfect. By selling to other people, broadening the social exposure and adding more people to test(explore), sooner or later, this working algo will become even better...stronger..more stable..less drawdown..more profitable, more diversifed.

😭😭😂😂🤣🤣 This didn't age so well

Ours is backtested and works 😉

Laughing in AI in 2023. Just 6 years lol

I agree to him i try automated trading so sucks it can blown out your account in just a minutes...better learn the hardway through doing manual because you control everything when is the right time to trade...robot keep executing trade until your account is zero...

i completely disagree, he is answering based in assumptions of person selling this softwares, what if there is some, who he doesnt even know?, you cant just assume that trading system doesnt work!

Renaissance Technologies...

He is right

I never buy a software. Never. But it does not mean the automated trading does not work. You can build your own automated system that comes from your own experience. For anyone who doubts that, there are many very successful automated traders; as an example, check out Ed Sykota.

Jim Simmons of RENTEC will disagree with you

One thing about this I disagree with is if I had a trading bot that made money, I would sell it. But only if it wasn't a money printer in the actual sense. If it made steady but low profits it would be quicker to sell it and let others use it, because selling it mean I have money now vs making that money +2 years down the road. If it was doubling my money per week I wouldn't sell it. But if it gave me around 5-8% per year it would be better to sell it. Aka, bots for sale aren't get rich quick just get rich quick for authors.

Software that manages trades within rules set by the person?

The point to take away is: if anybody tries to sell you a trading bot, it doesnt work XD

Quite a narrow minded point of view. He's right about many EAs and softwares out there that are rip offs and a waste of money. But there are some legit, and even better, ones you could code yourself

What he is saying is True. That's basic common sense. If it worked well... It mostlikely won't be sold.
Unfortunately though...His response is irrelevant to what was asked. She simply asked whether EAs worked or not. And he didn't answer this.
The Real answer: OF COURSE THEY WORK! That's one of the ways Financial entities like banks etc make money...HFT using EAs.
The average stuff that's being sold to persons don't work... But of course trading software works. He either didn't understand the question... Or purposely answered like that to guide persons belief away from the fact that they do work.

Hhmmm 🤔🤔

Very interesting point of view. Thanks for sharing it. I will look at the rest of the content in your channel, it looks fantastic.

I don’t think he understood the question - of course automated systems can work - just as discretionary systems can work- he’s seems to answer the question - should I buy somebody else’s system? - but that’s not the question he is asked

neural networks was not so familier bt that time, i guess

He just spoiled the plot of the human race i think

There is a lot of negative people, corporations that dont want you to know that you can have a trading bot that makes 5% or more very easily daily! Just need to do your homework and get it built.

Only greedy selfish people don't share successful strategies with others. This man, and so many in the comments are revealing their lack of integrity...imo.

clickbait title ; some automatic systems DO work but they stay private

They don’t “lock it up” cause the programs aren’t even that complex to program and they make money of commissions an stuff

I make my own automated systems that produce a great income for myself, but there is only so much liquidity in the market and I'm using every last bit of available volume on my entry bars, if even 1 person copied my systems then the slippage it would create would result in both of us loosing.
I wouldn't sell my working algos for any amount of money.

Well, it doesn't work until it works.
People have said the same thing about chess and go and playing video games without instructions and autonomous driving.
I think this man is too old and technology has passed him by, after all this interview was shot in 2016.
Decision making is based on rules, rules that people have developed by real world experience but also by calculating odds in their brains which is exactly the same as a simulation.
We use exactly the same "Generative Adversarial Networks" in our brains as do the latest A.I.'s. Simply just having the ability to watch multiple charts and execute multiple orders within seconds will help you become a super human trader, ad A.I. on top and it'll be unstoppable. As to why it doesn't exist yet, well people are working on it, just like people are working to solve Full Self Driving at this very moment while other people like this man is giving interviews saying it'll never happen.

Jim Simmons thinks this guy is a clown

This guy is so amazing 🤩

I suspect that 75% of all futures and fx volume today is automated. This guy is deluded.

what a bullshit

lol quant trading firms making insane returns with fully automated systems would like to say hello. He does make a good point about scammers selling you crap, though

Automated trading isn't supported by UKspreadbetting, and this is why they're presenting this view.
They want you to continue using the elbow grease of laboured manual trading.. on their platform.

They would sell it to me because the program would automated buying the same stock, therefore increasing the value of it and making everyone that has the program more money.

I know what he is saying around the advertising nonsense. I agree. I do not agree that a human can be as good as a mechanical system. Not a prayer in hell. For the exact reasons, he describes in his previous videos, like fatigue, indecision, fear, greed, and a host of other factors. Almost all of the trading these days is done by algo's. Make no mistake about it. That is why the news means very little these days. If you are buying and holding for the long run then perhaps you can do as good as a machine but I doubt that very much. Most of the legends have rules and the best ones had systems, like Ed Thorpe, Richard Dennis, Ed Sekoya, and many others. What I would say is that don't place unrealistic expectations on the system and it will perform. Even simple MACD works if you have a wide enough stop loss and you take a position over time (measured in months or years). You cannot move the market so why try. That is a sucker's game, like top or bottom picking. Now scalability is a completely different factor. If you are planning on taking the herd with you or are trading large amounts of money you better keep your system to yourself as you should anyway.

So people who have developed a working system all have the capital to make it pay then? I think not.

Yeah experience, intuition, lots of factors that have already been implemented in automated trading systems dumbass.

One thing he is 1000% correct about was if someone has a system that works all the time. They’re going to use. Why would they need to sell it to you if it already works so well. Well, they wouldn’t.

Buying one is not the same as making one

If you're a programmer reading this comment, just continue doing what you're doing IT DOES WORK now get back to work

Just throw the tarot cards. They will tell you how to trade.

Duh! That's why the people who have written systems that work DO NOT SELL THEM! I will never sell mine!

Well - he's not going to encourage you to buy something that cuts him and his big commission cheques out of the loop is he?

His logic would be flawless if everyone only thought me me me, and only me. But some people think me, community or let's try and have influence.
Open source thrives because not everyone thinks only me.
Not to mention giving away your system will only add volume to your ai strategy which will make you more money.
You will have some people creating a light version of their code and making it public be it to bring volume to there own strategies or to take power out of the hands of the banks.

I agree. In my experience , I have seen technical indicators like MACD, RSI, EMA change as per the buying and selling pressure on the chart.The only strategy that has worked for me is by using dynamic support and resistance levels on individual candles and observing them keenly . Also, observing the candle itself , its wick size, etc. Secondly, controlling ones emotions matter a lot and it just works fine

Your logic is not sound. If one posses such system, can make it into a cash cow subscription besides trading it.