Yep I say it all the time and I know from experience, the big
misconception out there is that mechanical systems take away the
emotion when trading, but that's a big farce, in fact they can make
you more emotional!
A Mechanical system's real purpose is to instill a discipline
and a methodical way to trade that's it, but take away emotion, no
sir!
In fact, mechanical systems are rarely mechanical systems.
Most people treat them like multiple-choice tests, taking a
trade if it fits their sense of where the market is going, or it
fulfills some emotional need. The real challenge when running
a mechanical system is adhering to it.
In that regard, I think that it may actually help that the SPY
system isn't free. Perhaps because people are paying for it
they may be more likely to follow it.
Today is a great test. Every emotion generated by my
glands is telling me to get out of the market. The system is
telling me to invest more in it. I did what the system said
and I feel good about that. I'll feel even better if, after a
few more live trades, the system performs in live trading as it did
in backtesting.
that's true algyros, unless they are totally automated by a
computer that takes the trades for them, I agree that a most of the
public treats them as you described i.e. like a multiple choice
Automation certainly helps, but you wouldn't believe how many
people discuss whether they should "take" a trade or not. The
bottom line is that human psychology can be a formidable foe.
Well put Al and Auni. The reason why this system makes
money is because it truly is a 'buy low, sell high' system.
When you stick emotion, fear, and greed into the trading equation,
more often than not, we do the opposite. Like Al, everything
in me is telling me to sell out and go to cash, but I too went long
at the close. Only time will tell....
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Yep I say it all
SPY system scale in 2nd entry
Posted by matt on 6th of Jun 2011 at 04:33 pm
Yep I say it all the time and I know from experience, the big misconception out there is that mechanical systems take away the emotion when trading, but that's a big farce, in fact they can make you more emotional!
A Mechanical system's real purpose is to instill a discipline and a methodical way to trade that's it, but take away emotion, no sir!
In fact, mechanical systems are
Posted by algyros on 6th of Jun 2011 at 04:43 pm
In fact, mechanical systems are rarely mechanical systems. Most people treat them like multiple-choice tests, taking a trade if it fits their sense of where the market is going, or it fulfills some emotional need. The real challenge when running a mechanical system is adhering to it.
In that regard, I think that it may actually help that the SPY system isn't free. Perhaps because people are paying for it they may be more likely to follow it.
Today is a great test. Every emotion generated by my glands is telling me to get out of the market. The system is telling me to invest more in it. I did what the system said and I feel good about that. I'll feel even better if, after a few more live trades, the system performs in live trading as it did in backtesting.
that's true algyros, unless they
Posted by matt on 6th of Jun 2011 at 05:33 pm
that's true algyros, unless they are totally automated by a computer that takes the trades for them, I agree that a most of the public treats them as you described i.e. like a multiple choice
Automation certainly helps, but you
Posted by algyros on 6th of Jun 2011 at 08:44 pm
Automation certainly helps, but you wouldn't believe how many people discuss whether they should "take" a trade or not. The bottom line is that human psychology can be a formidable foe.
Well put Al and Auni.
Posted by pebs on 6th of Jun 2011 at 04:50 pm
Well put Al and Auni. The reason why this system makes money is because it truly is a 'buy low, sell high' system. When you stick emotion, fear, and greed into the trading equation, more often than not, we do the opposite. Like Al, everything in me is telling me to sell out and go to cash, but I too went long at the close. Only time will tell....