Thanks
@Calvo and
@Coincacha. I appreciate it. I will look at those platforms. Like most of us here I have used them in the past, but just for charting purposes. Hopefully I can get something going over the next few months and share the results.
Yes, I agree. I think the experience should also help with the manual trades, as it helps figuring out what works and what doesn't.
When it comes to statistical analysis,
optimisation, and probabilistic models for random phenomena (e.g. market behavior), there are many different methods out there. Bayesian networks, Neural networks, Monte Carlo method, Machine learning, all sorts of heuristic algorithms, etc. Some are being used in market analysis as well. I used some of them in the past mostly for random physical problems though and not the markets. While every few years, a new approach becomes fashionable, they mostly continue to suffer from the same old problems. They try to create a black box to which one provides a series of inputs and from which it gets the results. The trouble is firstly by nature they all ignore the underlying mechanisms (the structure of what's inside the blackbox); secondly to work successfully all/most potential input
variables should have been identified (which for random events is not the case), and thirdly as the number of input variables increases the required computing capacity ramps up to unsustainable levels. The point is I personally stay away from such models. The gain in many cases is minimal if any.
What I am thinking of doing is trying to test a few old trading tales. Whether they work and under what conditions. Seasoned traders use them and pull successful trades, but when junior traders take that advice and apply them, they end up emptying their CFD accounts. The difference is in the probabilities involved. Seasoned traders from experience (and knowing the market personality) know how to set their trade parameters. I am just trying to use data to quantify that sweet risk management spot and execute automated trades on that basis to boost profitability. Nothing fancy really, just some basis statistical work on trade parameters.
(20min delay)