It just does it There's no thinking about it. You're not seeing the screen all you're gonna. See it. You're just going to be alerted We're going to come back and you see you've got a position however You've still got a program in all the parameters So you still have this big learning curve to go through so you got to work out how you're gonna program it We've gotta hire a programmer you want to verbalize what you're talking about but more importantly We're going to put it in in kind of parallel with this emotion removing you still have some emotion with the system Because you still have to say to yourself. Hey. I only want to risk X um What do you do when I have X amount of losing trades in a row do I pull the system? I'm going to jump to here now.
Do I overrule the system and say I don't have another losing training run I'm going to execute a trade or Do I cut the system and say hey you know? What these are the rules it shouldn't have more than this in a row or do I have to sit through? The drawdown of the system, so there's still emotion involved in it it doesn't pull a motion away from it There's a bit of a fallacy with trading a system.
You've still got that and in fact Let's be honest if you're in a position size that was entered by a system There's no different to that looking at an or screen at the end of the day if it's a systemized automated approach Or it was a manual approach. You're still in it Regardless the only difference now is you have an automated Exit point that you know this system will take you out of but you know the rules of that You know what it is that could be less use very very simply speaking a moving average crossover I would hope that the automated strategy is is more Complex than that still keeping things simple, but with a few more parameters in but let's use that for example You know that it's going to come out there, so you're really right very very very nicely on the trade You know that the system is going to take you out there But then it's no different psychologically to being up and thinking I was going to pull me out And I don't want to become out on we'll come out early you're still going to get the feeling if I want to cut it Early don't want to trim it.
I don't want to trade it you know you're still going to be feeling the ups and downs of the move and the trade whether Automated or not unless of course you're strict enough to not even look at what's going on early to only be alerted if things go disastrously wrong Which again? You've got to code something in but it's human nature guys human nature for still want to see how our money's doing especially it was A meaningful amount of money same with trade you've got a very small amount of money in there almost a downsize We don't care. We let it move back and forth we're not trading it with any thought or Or energy however, you know when we start trading big size We're watching you like a hawk because it's very meaningful to us So it's the same kind of thing so what it doesn't remove some emotion and maybe it's some way of reducing some things It doesn't reduce it completely just just going off on a tangent very very quickly we can still add Automated orders without a strategy so we can still put in limits and stop entries to remove this if we want to that's just something To think about this hybrid approach of being alerted to trades placing the orders in making the decision still manually But putting those orders in and then walking away from the screen so we can all sue that all right another thing another good reason For having an automated strategy is good data in other words we are going to have good data on the results of the strategy because in fact leads to a very very similar Got segmented strategies and good data what I mean by that You know we are trading one specific strategy per system if you like automated strategy pullback trend trading mean reversion fading levels two distinct strategies We know exactly the rules of the system exactly rules of the strategy And see how it's performed so we can be very objective in the way that we're analyzing The results that are coming out we can see hey the trend trading is working very very well Let me allocate more capital to that rather than a lot of people manually Even though we try and segment often and journaling and do all that stuff it relies on us to being Again very objective in the way that we are you know analyzing and Summarizing the results which often we're not so that that's a good really good point because we get good data based on a specific strategy And we can also see hey quite easily if we made a small little tweak to it How would it have affected the strategy results in the past week two weeks two months two years? Whatever it may be so that's very nice as well.
So that's a good reason to do it another good reason is It requires you to really identify your strategy many of us trade a little bit too much from the guts You know we have a broad strategy, but with an automated system We have to actually very very clear to find when is that order going in we can't just say oh? I think it's gonna be isn't that now maybe that could be a positive and a negative Maybe using some of our intuition is what's mean as a good trader definitely an argument for that case But also you know the positive side of this is really nailing down exactly What I need to see one of my favorite set up before I want to take the trade and even going down the path of Automating and then say you know what it's helped me loads because I've ironed out exactly what I want to see and now sticking with manual to allow that little bit of gut a little bit of gut feel so to still be there so that's That's something.
That's that's quite important I think we've talked about the segment strategies as a good way of collating data So against why should you not do it obviously the one where I'm really put here is that you know you? You're taking away the gut feel as a trader, and it's something that you know We've done a video about before but how do you quantify it? We we get experience as Human and intuition plays a good part in it as we get experienced and by kind of having an automated strategy do we remove that? Completely we kind of do in a way, but can we program it in maybe we can but it's something to be aware of Against the safety parameters of course we have to make sure for using an automated system that we're not checking that there are really strict safety parameters in what we don't want and I've heard this story before is a System that just blows up one guy built this algo And it lets you when buy sell buy sell buy sell buy sell buy so all However long it took him to lose all his money in commission and spread That's his heart breaking because he went real money wasn't it wasn't strictly Checking it didn't have any safety parameters any lockdown so if you're gonna do it You kind of have to do this whereas? We're doing it by eyeball.
We're gonna see hey You know what we're in too much of a position here the size has gone too much We didn't enter the ticket was the wrong size went by instead of cell. We've got too many positions We're gonna feel that discomfort and be alerted to it. So that's just one thing to remember We also still require risk analysis. We can't just say Okay, you know what I'm gonna leave it. It's gonna be fine We need to dig down and say how much of these trades are going to take before we come out? You know we still have to Think about what might happen and put the risk analysis in which is one of the hardest parts of trading It's kind of trading for a meaningful size But still having that risk tolerance is acceptable so that's something that we can't ignore completely understaffed and nailed down There is still a discipline issue there gotta stick to the system, and these are kind of really two the same We touched on this a little bit earlier overall or cutting it you have to know when the system is just drawing down And you're not gonna front run it and kind of ignore it and not take some and take the other if you start to do That there's no point in trading a system because generally There's gonna be a handful of trades that make the most of the money And if you're not trading it methodically hey You're gonna ruin the point of having good data because you didn't take that agustin fancier or whatever it may be and be you might Miss miss out on the really good trades that actually make up the bulk of the system's profitability So you still have discipline to execute it as you said you were going to do it and say hey I'm gonna risk this amount of money.
I'm going to trade it for this amount period of time I'm gonna stick to it I'm gonna see what happens so They'll go guys. Should you focus on doing an automated strategy some ideas for some ideas against? let me know your thoughts in the comment section below about Automating is it a route You've gone down any success with it any pitfalls you want to share Interested to hear what you guys have got to say good trading see the next one thumbs I feel like it's kind of stuff.
See you again. See you soon. Bye. Bye You .
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