Help badly needed in a specification for a trading system

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Tresor
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Help badly needed in a specification for a trading system

Postby Tresor » Wed Apr 30, 2008 9:58 am

Hello Guys,

I am a swing trader with little experience. I have been using Channel Breakout signals for 2 months with a success. Recently I found a guy who says he can code any trading strategy for me. He asked for a specification of the trading system that I have in my mind and he will code it.

The catch is I simply can't write it. I am a song lyrics writter and all this logical stuff, like ''buy if a condition dependant on some other condition is fulfilled'' is just to much for me :( Yes, I am a silly newbie who hated math at school.

I have a big big favour to ask you. Could anyone post a specification of any strategy in plain English. The more complex one the more appreciated. So that I could see what such a strategy specification looks like and use some of the logical phrases and wording that will be understandable both for me and especially for the programmer I found?

I simply lack words (English is not my mother language) to describe that, e.g. the signals generated by Stochastic should be less important for the reversal signal generating than those generated by MACD divergence, etc. And in case of two conflicting signals, what the trading system should do nad how I should specify this to a logical programmer? - I do not know :shock:

If you came accross any strategy specification (in easy to understand English) please share it.

As I have not decided what the signals should be generated on please also make some suggestions on what indicators should I use and which not. I am a newbie so I might stupidly put redundant stuff in my strategy and overpay the guy :roll:

Regards

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eudamonia
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Postby eudamonia » Wed Apr 30, 2008 4:56 pm

Here is a simple Turtles like strategy described in what I call pseudo code (easy enough for a programmer to decipher).

ENTRIES

If the Current day Close is greater than the Close of the last 50 days then
Buy 1 contract at market at following day open.

If the Current day Close is less than the Close of the last 50 days then
Sellshort 1 contract at market at following day open.

EXITS

If we are currently in a long trade (ie. Marketposition = +1) and the Current day Close is less than the Close 20 days ago then
Sell 1 contract at market at following day open.

If we are currently in a short trade (ie Marketposition =-1) and the
Current day Close is greater than the Close 20 days ago then
BuytoCover 1 contract at market at following day open.

That is about the most simple strategy out there (similar to the Turtles original strategy).

If your strategy involves multiple indicators and things like divergence it is going to be quite a bit more complex. Divergence in particular is very simple for a human to understand and quantify but very difficult for a computer. The patterns we recognize instantly are not obvious to the computer. I'm currently working on putting together an indicator that detects divergence the way I do. Needless to say it isn't easy.

Good luck with your trading journey.

Edward
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Postby Tresor » Wed Apr 30, 2008 5:18 pm

Many thanks eudamonia :)

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Postby noone22 » Sat Mar 14, 2009 12:07 pm

eudamonia wrote:I'm currently working on putting together an indicator that detects divergence the way I do


Hi, Edward

As you're working with divergence, may I ask you for an idea
(not even source code) - how to find out highs (I mean real tops of price waves) and higher highs.

I know one good divergence system myself and would like to create an indicator to simplify my life. My problem is, that I could see and recognize divirgence in the example' charts OK, but in real market movement I easily (and thus - quickly) cannot.

Apart from collecting price information and comparing one close with next sequential one (to find out highs), and them store each & every high in the dynamic array and determing higher high as miximum element of this array - I haven't progressed so far. But I don't know, whether such algorythm will take much of CPU, memory, etc and such approach maybe not effective at all.

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Postby eudamonia » Sat Mar 14, 2009 10:04 pm

noone22,

The key to recognizing divergence as a discretionary trader is practice. With sufficient training the discretionary trader will easily outperform a computer at this highly subjective task.

That being said, I have had a programmer more skilled than I put together a divergence system. It is essentially looking at the information you suggested. It will attempt to match both the divergence of price and one or 2 other indicators. If everything lines up it will create a signal. This works pretty well, although for reasons I stated above, does not generate signals as accurately as I can.

Obviously, there are some very skilled programmers out there such as Michal, Wayne, and some other folks on this board who might be able to create a reliable divergence signal through automation. Unfortunately, I can't really help too much with that process, since most of my trading these days is discretionary and that is where my trading strengths lie. Interestingly enough, I have noted that programming things exactly the way I trade is very challenging and perhaps I don't think enough like a computer to convert my exact trading style into an automated format. Of course that doesn't mean trading in an automated fashion is inferior in anyway. But you might need to think differently.

Edward
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Postby noone22 » Sun Mar 15, 2009 7:54 am

Thanx, Ed

I do know about mechanical trading vs discretional. In fact - I prefer
dicret, but like to use as much mechanics (to help make the decision or to view something) as possible.

Task of finding of higher highs has absolute direct & straightforward description, however it is not so easy (for me at least) to implement.

Could anyone share his ideas about finding higher higs programmaticaly?

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