Automated trading or point and click?

[Trembling Hand]

I may need to start with something simple first.


Losing time is not in my menu

Mate I'm afraid to say it but time is pretty much what you have to spend in order to make ANY progress. This place is full of people who are at various stages of the journey. Non get there quickly, most never get there in spite of amassing years of market "knowledge". Seems strange but its true.

To specifically answer your question about why the ASX is a waste of time to automate a system here is a few points in no particular order,

1. Out of the 2000 odd companies more than 1500 are less than $1.00 more than 850 are less than $0.1 So you can scarp all of them to try and trade bots on. Tick sizes are just way to large as a percentage to allow an algo to trade automatically on a short term basis. The R:R is just not in your favour.

2. There is only 140 companies over $5 bucks which gets you closer to decent tick sizes to enable you to not have to pay a huge price to cross the spread.

3. Of those 140 companies above 1/3 of them have a daily range of less than 1% on any given day. Very likely to be stuck trading something that isn't going to move once your in.

4. High cost of trading ASX stocks. They just are not for short term trading.

5. High cost of scanning the ASX on an intraday basis.

6. ASX stocks often come into play and then die days latter. Any pattern you will be chasing in a particular stock will soon not be there by the time you pick it up.

6. I could go on for hours but really if you want a short term system thats going to be robust and based on repeatable patterns the consensus is FX and futs.

 

[FlyingFox]

Its not considered quality data...here is an explanation from Richard Dale. Its biased but its still true. Richard owns Premium Data and they are en excellent data provider in my view. I've been a client for almost 8 years.



Cheers,


CanOz

Thanks. Valuable info.

 

[FlyingFox]

Mate I'm afraid to say it but time is pretty much what you have to spend in order to make ANY progress. This place is full of people who are at various stages of the journey. Non get there quickly, most never get there in spite of amassing years of market "knowledge". Seems strange but its true.

To specifically answer your question about why the ASX is a waste of time to automate a system here is a few points in no particular order,

1. Out of the 2000 odd companies more than 1500 are less than $1.00 more than 850 are less than $0.1 So you can scarp all of them to try and trade bots on. Tick sizes are just way to large as a percentage to allow an algo to trade automatically on a short term basis. The R:R is just not in your favour.

2. There is only 140 companies over $5 bucks which gets you closer to decent tick sizes to enable you to not have to pay a huge price to cross the spread.

3. Of those 140 companies above 1/3 of them have a daily range of less than 1% on any given day. Very likely to be stuck trading something that isn't going to move once your in.

4. High cost of trading ASX stocks. They just are not for short term trading.

5. High cost of scanning the ASX on an intraday basis.

6. ASX stocks often come into play and then die days latter. Any pattern you will be chasing in a particular stock will soon not be there by the time you pick it up.

6. I could go on for hours but really if you want a short term system thats going to be robust and based on repeatable patterns the consensus is FX and futs.

Great info and reasoning. Thanks.

 

[tech/a]

to be robust and based on repeatable patterns the consensus is FX and futs.

All anyone whose interested in Automation need know.

 

[timeless]

Mate I'm afraid to say it but time is pretty much what you have to spend in order to make ANY progress. This place is full of people who are at various stages of the journey. Non get there quickly, most never get there in spite of amassing years of market "knowledge". Seems strange but its true.
....

6. I could go on for hours but really if you want a short term system that's going to be robust and based on repeatable patterns the consensus is FX and futs.

Thank you for the valuable summary. I do realise that gaining right skills and right choice of trading activity given budget and analytic skills are the keys to minimise the Time To Reward (TTR

I was initially leaning towards forex but got discouraged by many posts all over the world claiming that once people become remotely successful in their trades, they start magically losing due to slippages and other obstacles clearly "out of control" of service providers whether Swiss Banks or smaller operators. So if dishonest practices kill trades on the top of nearly random patterns and interventionism of big players, I saw no chance of success.

I was trying to find solid evidence that small traders can make profit in Forex, but all in vain. Found some serious research in stock market only to learn that about 1% individuals succeed in Taiwan and also small percentage i US
but no equivalent reliable research in Forex. Believe that any research published on less that 1 % success rate in Forex would kill multi-trilion dollar business so there are forces that make sure this would never be funded and published.

I was hoping the Australian stock market being less of a current trend could provide more chance of profitable trade. I see from your summary that it has its problems worth considering.

So once again thank you and all people here for dedicating their time and experience to teach me something I should know before risking any money and wasting time.
Cheers,

 

[Trembling Hand]

I was initially leaning towards forex but got discouraged by many posts all over the world claiming that once people become remotely successful in their trades, they start magically losing due to slippages and other obstacles clearly "out of control" of service providers whether Swiss Banks or smaller operators. So if dishonest practices kill trades on the top of nearly random patterns and interventionism of big players, I saw no chance of success.

Mate thats just BS.

Losers are always the first to claim "dishonest practices"..... LOL its a market.