There’s a post on the Winners Edge Trading blog that looks at automated trading systems. The article takes a very negative view on these systems, focusing mainly on ones that are being marketed and sold. The case against them are as follows:
- Many system sellers don’t actually care whether they work for you or not.
- The system creator(s) don’t do sufficient testing to come up with significant, trustworthy results.
- The system is built around recent market conditions, which stops working as soon as conditions change.
Of course the post then goes on to talk about all the things they do with their own system(s) – which they then promote – in order to overcome these three issues. Unfortunately, even the most sincere, honest, and ethical system developer cannot account for the fact that most systems won’t work for most people because they are not a good psychological fit for the user.
I am personally not in favor of buying trading systems. You are much better off researching and developing your own. It’s much more likely to be a good fit for you and to be something you can stick with.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.