Not too much to report on the trading side of things today. I may get the opportunity to move some stops at the end of the day but until the markets close I don’t know.


I’ve posted a reply to thesmartmoney post over on the Spreadspread betting central forum. For those who haven’t read the post here’s the gist of it.
Oh and don’t forget you can also register for my spread betting beginner spread betting forum here


TSM posted asking if the markets are skewed against the average investor? With the news reporting that 70% or all stock market trades last less than 11 seconds this is clearly program trading, or computers doing all the trading based on predefined parameters.


I’ve often though about program trading. With being a software engineer and working for a company that specialises in automation software it appeals to me in a big way. The idea of writing an algorithm(computer program) that would enter and exit trades based on give parameters without any human intervention sounds like a great idea. I mean I’m essentially doing the same thing now. I search for potential trades using a stock screener. If the trade meets my risk requirements and I like the look of the chart then I will place an order or enter the trade. My stop is determined by the super trend indicator and adjusts accordingly, there really seems like there is no need for me at all.


So why do I not do this? Well the problem is the “I like the look of the chart” part. How do you program that? I look for price to have crossed the super trend indicator but I like another price pattern such as a double bottom, or support line to be in place before I enter the trade. This, in my opinion, increases my positive expectancy of the trade.


This is why I think it’s so difficult to write a completely automated trading system. It’s the support/ resistance part that is so difficult to write. It’s easier to look at a chart and identify possible support and resistance zones but when you try to write down what it is that you have found so a computer could do the same thing is where the challenge lies. Maybe one day I’ll be able to write something that does it.


Even if I could do this I have no Idea how to completely automate my trading. I’m sure there must be firms out there that allow this but I don’t have the first clue about how one goes about doing it.


If you have any experience of automated trading please get in touch. I would be fascinated to hear from you.


Anyway that’s about all from me today. I will try and update my open positions later if I get to move my stops.


UPDATE: I’ve just moved my stop on luminar from 13 to 15. This trade is now at break even


Until next time,
“May the markets be with you!”
Spread Betting Beginner

October 25, 2010 by Harry
Category: blog