[cuttshot]

Systo, save your time. You won't find an autotraded system that will work over a long period of time. The flip a switch and get rich type of a system is just not out there. You are far better off following tj's advice and taking the time to learn how to trade on your own.

As far as backtesting goes, I am a big believe in manual backtesting. I could go on and on about why I believe this. The bottom line is you need to learn your system inside and out as well as your given markets. Spending the time to test hundreds of trades manually will teach you how your system will respong in different market conditions. Most importantly it will help build your confidence in your system and market.

I can guarantee if you run an automated test and then go right to live trading you will not be able to make confident decisions. You will run into certain tricky situations as time goes on that you will not know what to do with.

Bottom line there are no short cuts in this business.

[AmCan1]

Cuttshot has hit the nail on the head. I completely agree. Manual backtesting, while tedious, and a pain in the butt, literally (hours in the chair, lol..) is FAR superior then automation, IMO. I'm sure there are many on TL who would strongly disagree and their entitled to their opinion, and quite frankly, that's what makes a market.

As soon as the going gets tough, you'll be gone because you won't have the vision or confidence or even basic understanding to know that the best trades come after hard losing trades. At least with a manual backtest, you can live through that process and begin to absorb it into your psyche. Little by little you build the most important thing of all, confidence, by seeing how the system recovers after losses and how the equity grows, despite the losses. Without that, your instinct for survival will override your trade decisions and you'll be running for your life, the first time you get a 4 or 5 trade losing streak. I'm sure good one's exist, but anybody with a good automated system is NOT going to be making it available. Who would want to kill their golden egg laying goose? Makes no sense.

[LS_Chad]

Video 2 ,"Refinement and Optimization", completed in series "Fading the VWAP Bands: Idea Thru Automation": Investor/RT - Fading the VWAP Bands

[UrmaBlume]

We hope that this new addition to Trade Station will set a new standard in the kind of back/forward and optimization testing that is available to the public

tradestation Acquires the “Grail” Walk-Forward and Strategy Builder Technology

Acquisition Brings tradestation’s Industry-Leading Strategy Trading Platform to a New Level, Further Raising the Bar against Competitors and Weaker Imitations

Plantation FL, June 17, 2010 – tradestation today announced its acquisition of the Grail System “walk-forward” and “strategy builder” software technology and business from its inventor, Wouter Oosthuizen, and his company, Technovest (Pty) Limited. The products acquired include Grail Walk-Forward Optimizer, Grail Genetic Optimizer and Grail Computer Assisted Strategy Builder, together with all other products, enhancements and new features currently in development. These products will be seamlessly integrated with tradestation’s award-winning, industry-leading trading strategy design, back-testing and automation platform. Both walk-forward testing and a broad strategy builder offering have been a company priority for tradestation for some time, as the company has long realized that the potential value of its strategy design, back-testing and automation platform could rise dramatically with the addition of these tools to create and optimize back-tested trading strategies.

“The Grail Walk-Forward Optimizer should take tradestation’s strategy back-testing functionality to a new threshold,” said John Bartleman, tradestation Securities’ Vice President of Product Management. “Once fully integrated and rolled-out as part of our tradestation Version 9.0, a major-enhancement release that should be out before year-end, traders will have the ability to test the robustness of their strategies at a whole new level. The Grail’s unique model of ‘Walk Forward’ testing allows the trader to see how the strategy he has tested against a historical time period will perform against various unseen market data metrics and time segments within that back-tested time period. The Grail Walk Forward Optimizer performs this multi-dimensional analysis of the strategy and then concludes with a simple ‘pass’ or ‘fail’ based on the simulated performance results. In other words, if the strategy is going to have a better chance of success in real trading, it must first prove its robustness by passing these rigorous metrics analyses performed by the Grail.

“The Grail’s Strategy Builder,” Bartleman added, “will significantly help traders build new strategies from scratch without the need for custom EasyLanguage® programming. Using genetic algorithms, the trader will have the ability to scan through millions of strategy permutations in a relatively short period, identify those strategies he believes show potential, and then submit them to the Grail Walk-Forward Optimizer to test their robustness.”

“The Grail products all were developed principally with tradestation users in mind,” said Mr. Oosthuizen. “tradestation will be releasing some extremely powerful functionality in its upcoming Version 9.0 release which, in my opinion, not only will dramatically increase the Grail’s speed and value, but will take tradestation to a rarefied position where the barrier of entry for a competitor seems insurmountable. Teaming up with tradestation, and having the value of its impressive product development and user support resources and expertise, should take the Grail technology to a whole new level as well.”

Mr. Oosthuizen will be joining the company full-time at its Florida headquarters on October 1, under a three-year employment agreement, to help lead the efforts to enhance the technology and seamlessly integrate it with the tradestation platform. The parties have already started working together to achieve these goals. The purchase was made by tradestation Technologies, Inc., the trading software development subsidiary of tradestation Group, Inc. (NASDAQ GS: TRAD) which develops and owns tradestation’s proprietary software, technology and intellectual property.

[systo]

thanks, for valuable advise tjnoon, cuttshot and AmCan1 !

you are right, I may be to optimistic about autotrading. Past few month I spent playing with CFDs and recently with scalping futures, but with mixed results at best. It looks like profits are possible only when terrible abount of time is spent on daily basis. Auto- or half-auto trading would be hopefully less strained. Also, the possibility to backtest is a huge advantage. Manual backtesting would be certaily very useful, but I am not sure if proper adjustments would be easy anough to spot.

As for auto-trading, it's obvious that I can't count on developing a system, that will run profitable in long term. I hope, running a set few systems per product one can add to stability and afford scraping system early, as soon as they lose more than in the past (maybe every month or so). If this can work out, I will be more comfortable spending whole time on developing new systems, than trading live on my own.

can this possibly work out or am I just going to bump my head against the wall?

[AmCan1]

Systo, I think you're over complicating things. You could learn how to trade much easier than trying to do what you suggested. Trading involves about 10% art and you could never program that IMO. It's easier and probably less time consuming to learn a good trade system, backtest it manually, create a simple to follow tradeplan based on the results of your manual backtest, prove you can trade it with a bunch of consecutive mistake free trades in a live sim account, then go live with the minimal amount of risk possible until you've really got it dialed in. That's what I did and it turned my trading around. The process is very cut and dry, step by step but the effect will change everything for you. Why do all that other stuff you mentioned? Doesn't seem like the best approach to me.

[TraderWill]

Any system that can be traded and tested manually can be programmed and tested through automation. The problem is that many variables and criteria that we apply when trading manually, never make it into the automated system. Small price adjustments around key price levels, decisions about when to take the first trade, when to stop trading, when to adjust our target and stop expectations, etc. are all things that we do almost insitnctively but never make it into a program specification. Or, if we do try to factor all these variables and criteria into the program, the code can become incredibly complex and subject to coding bugs. Furthermore, the programming language itself may limit what can be accomplished through code.

Having said that, automation can be invaluable in refining your system. A basic version of the system, without all the nuances mentioned above, can give you a clear idea whether or not the system even has a chance at becoming profitable. It can also help you identify ranges for each of your variables that provide fairly stable results, and can pinpoint values that are over optimized. If you want to see whether your system works better on a 5 minute or a 2 minute chart, you can get the answer a lot faster with automation than through manual testing.

Actually letting the automation place trades for you is a much riskier proposition. Besides the risk of programming bugs that will only become evident when they can hurt the most, you're also subject to the risk of power or internet outages. So I feel comfortable using automation to help refine my strategy, but always place and monitor my trades manually.

[cuttshot]

Well said traderwill. Automation can be a nice tool for the situations described. However, you want to make sure you are completely comfortable with the system before you do this. Many traders want to buy a system out of the box and just flip the automation on to do the testing. The problem with this is you never really get to know the ins and outs of the system.

You also want to make sure when you go to trade live you can execute the trades in a similar way that automation was showing you. The results can look great on a test but if you can't follow the plan it won't mean a thing. Trust me I have been burned with this over and over again. I also agree that it's very important to manually place the trades.