In order to facilitate the communication and discussion with you, I would like to share my personal understanding and knowledge of programmed trading with you again.
Programmatic trading has a great premise, that is, we must first give up our subjective judgment and prediction of the future market. Without this premise, programmed trading is impossible. Then there is a series of processes of establishing rules and implementing rules.
Firm, consistent and uninterrupted execution of trading rules is the core spirit of programmatic trading, and it is also the concept that loyal programmatic traders believe in.
In normal life, for 99% of things, everyone is used to averaging everything that happened in the past with linear thinking, such as average income, average economic growth rate, average speed and average commodity price ... but for programmed traders, the so-called average rate of return is a very naive concept. Trading is a nonlinear behavior. How to explain the results of nonlinear behavior by averaging? How is the price of the transaction generated? It is the result of psychological interaction of all participants and the result of completely nonlinear behavior. If it is artificially averaged, it is very, very naive and ridiculous. The past performance (limited to continuous firm offers, test reports or simulated transactions) only shows the level of matching between the system and the market, and the ability of traders to correct the matching between the system and the market. But it doesn't say what the future result will be. The result of the current transaction will not affect the result of the next transaction, nor will it be affected by the results of the previous transaction or transactions. For example, the term refers to an intraday trading system that loses eight months, loses two months and gains two months in a year, and the overall performance of a year is 50%. But this can't spread the 50% annual rate of return to every month, because it's not true! The 50% rate of return is based on the income of two months in a year, not the accumulated income of each month. If someone asks me what is the average monthly rate of return? I really can't answer, because it doesn't make any sense. The only meaningful thing is that 50% of the annual return is obtained by executing all the trading signals of the trading system for one year. If you don't execute the loss signal for eight months, there will be no profit signal for two months. (See: Trading = Fishing) If traders don't realize this, it will directly affect the execution efficiency of the trading system, because when the trading system has an inevitable loss period, these traders will almost give up executing trading strategies and choose subjective or left trading strategies instead. This will gradually lose the advantages established in the programmed transaction, and in the long run, the transaction will inevitably fail!
Programmatic trading system is not a tool to please traders, but a trading tool to help traders compromise in front of subjective ideas and implement established trading rules. From the perspective of human nature, the most satisfactory way for traders should be to buy and sell according to their own ideas and personal emotional trends, and make a big profit as a result, right? But if you really do, again, in the long run, the result is bound to fail! You can try if you don't believe me:))
For "can you guarantee profitability?" In this way, I want to quote a sentence once said by Mr. Qiu: "If there are really a few people in the market who can predict the future market, then he will lose his meaning as a person!" Personally, I think that if only one person in the world can predict the future market and ensure profitability, this market would have collapsed countless times! This is a mentality of getting something for nothing, which is not worth mentioning at all.
Having said these words, I didn't mean to disrespect you. I respect all my friends who communicate with me very much. Also welcome more friends to come and discuss and exchange. We can learn from each other. I hope all of us can make a sound on a deeper platform.