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jpennybags

Help a Discretionary Brother Out...

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I am, by definition, a discretionary trader. I'm not one of those systems traders that makes discretionary calls; I actually don't have a system. One could argue that every trader trades a system, but I think I'm about as “bare bones” as it gets. I make my decisions on price action and often times on situational intuition. That's it.

 

I like what I do, and don't really see any need (for me personally) to take up system trading. I seem to need something workmanlike and interactive to be happy, and discretionary trading provides that. The reason that automated system trading has sparked a recent interest for me, is that I was considering setting up a trading account for charitable contributions. I like the idea, but giving up the time from my own account to trade it would be problematic (or, I see it as such at this place in time). So, at this point it's just a curious notion that I'm considering. A few questions, or if someone could recommend a book that would be good too:

 

1. If you have a portfolio of systems that can be engaged according to market conditions, how does one decide when to apply or change out these systems? I suppose one could allow failure to serve as the criteria, but that doesn't seem right to my way of thinking.

 

2. Are there self correcting systems that change due to market metrics? I'm not necessarily speaking about something as complicated as AI systems, but something that will make slight adjustments to stay in phase (I think “phase” is the right word). I suppose these could be manually controlled as well.

 

3. How extensive does this portfolio need to be? It seems to me that 3 to 4 systems would be sufficient, but possibly I don't understand the task at hand.

 

4. I have no desire to learn to program. I'm already challenged with being an “ole man”, and I may not have that many years remaining (ha!). What would the monetary outlay be for someone to program and back test for me (a ball park figure… even in the neighborhood is good enough)?

 

5. This really needs to be something that doesn't require a great deal of maintenance. Is that possible?

 

[i can hear your laughter: “you dope… what do you think this is a money machine?”].

 

The reason I ask is that it may be possible to set up the account as a tax free trust (of some sort), and this would probably require additional accounting. I can see how this notion of mine could become an all consuming head ache. If someone has some insight into this, it may be enough to nip this idea in the bud.

 

Thanks...

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As I've been told that it's not that difficult, I'll take on #4... I've got time (and I may not have that many years remaining ).

 

Reality check -

With a ‘portfolio of systems’ etc past a certain (actually quite low) threshold of complexity, getting code to ‘see’ the market the way you want it to see the market and do what you want it to do is an extremely daunting task.

 

Past that threshold of complexity, having someone else program the whole of such a project has little chance of working. It would be a daunting task to spec properly. Then, the odds of matching up with programmer(s) that you have a chance of properly communicating those specs to ( ie to reach ‘shared vision’ between trader and the programmer) is extremely low - even if the programmer has trading experience or even coding experience with trading systems. Most experienced trading system programmers out there already have their possible potential established... sadly, it is not uncommon for even the ‘good’ ones to hear what they want to hear and deliver code that’s not really what you asked for... If you go past that certain threshold of complexity, don’t be surprised one day to find yourself already ~ hundred k into something that might need to be fkn started all over.

 

In this 'sample of one' example, at the portf level, I personally code all the proprietary system weighting and sizing algo's myself . At the individual systems level, I also code all the analysis’ and all the trade setup and trigger logic for all the systems myself. I farm out to professionals the intricacies of order execution and position ‘tracking’, etc. for my platform(s), connectivity monitoring, and issues with position accounting/management during reconnects... and a whole stack of little things one would never imagine would need to be dealt with, etc etc. The programmers I hire have no idea of the trading logic. They simply develop the ‘objects’ I ask for using really dumb prototypes and it’s my job to integrate their stuff into my project properly.

 

 

and fwiw (...and bags, this is a pure projection on my part ... ) it is my feel that if you want to do contributions, you will get far more traction/effectiveness directly helping those in your own community - instead of donating to corrupt charities. The world needs your wisdom far more than it needs your money...

 

hth ...wishing you all the best,

 

zdo

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The world needs your wisdom far more than it needs your money...

 

hth ...wishing you all the best,

 

zdo

 

Thanks for the vote of confidence in my "wisdom"... my children have been the main beneficiary in that regard. They turned out just fine, but they consumed a good deal of my money too.

 

"Corrupt charities"... eh... probably not... at least no more corrupt than I am. These are local charities that benefit those in my community. I also support public radio, and the local arts community. One could argue the value of that, but these are things that I enjoy, and feel the need to give back.

 

The person I spoke with about programming was of course speaking to learning to write code... nothing more. We spoke some about the mechanical aspects of what I wanted to code, but I doubt that he understood the integration. I did find out that I can't afford his services... go figure.

 

In all regards, I am a practical person (part of my wisdom). This wouldn't be the first time that I took on such a project and failed, but I always come out the other side with a new perspective, and gain some knowledge in the process.

 

In all regards... thanks for the reality check.

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