Let’s reframe the question: can You be a top pro athlete while having a 9 to 5 job?


Automated trading is the hardest discipline

Automated trading is by far the hardest way to trade. If You think of the markets as driving a Formula 1, then automated trading is being in the cockpit without a steering wheel, brakes or accelerator, only adult size diapers.

Think about it logically:

  1. You compete against people who stare at the screen all day long. They can intervene anytime. Your algo will not.
  2. You need to have considered all contingencies. Things will go wrong. Rather than adding complexity, special cases and all kinds of savant fragility, You need to reach the essence of simplicity. It took Picasso 30 years to draw a face in three lines
  3. False positives: eyeballing charts in hindsight is one thing, getting the algo to distinguish false from true positives is another
  4. Time heals everything, after the fact. People who have not thought their system through usually default to longer timeframes. In hindsight, it does work. In practice, everyone is an investor until they lose 20%

Trading is a business

If You treat it as a hobby, remember that You compete against people who treat it as a business. Only a small elite survives. So, as a part-time trader, how do You expect to beat those who have devoted their lives to the craft?

This post originally comes from a question asked on Quora

2 replies
  1. Fred B says:

    I disagree.
    For me algo trading is like running on rails, the train keeps moving and stays on the tracks, whereas discretionary trading is more like your F1 example. miss a turn and its goodnight.

    • lbernut says:

      Hello Fred,

      I agree with your statement. It is like running on rails. The point was about the psychology. I watch my algo doing things i would never dare. I am still running the same race but i choose not to intervene and sometimes it is scary.


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