Mechanical Systems......

There is an ever increasing number of "black box" or "mechanical trading systems" being marketed. Software now exists that makes it easy to churn these things out, and they are profitable - to the person selling them. There is a huge difference between trading "trading methods" and trading "mechanical trading systems."

Although I state that my systems are mechanical, they are mechanical in the sense that you need to obey the trading rules at the time
of making the trade. You still need to make a decision on whether to take the trade at the appropriate time or not. Hence, because your are human (and not a robot who can't think) we do not mean that you obey a set of numbers and place trades without thinking before you take action.

The average person has no idea what actually drives the markets. In fact the average trader doesn't understand what is actually moving the market. Any financial market!

They will quite happily follow a mechanical trading system [based on some mathematical formula that's been back tested 25 years to 'prove' it works. Any set of numbers can be manipulated to show the expected results.

Even those who make a living from trading [particularly brokers], who you would expect to have very good knowledge of the causes and effects in the markets, don't know what causes the underlying movements.

THERE IS NO SUCH THING AS A PROFITABLE 'MECHANICAL'
TRADING SYSTEM.

IT DOES NOT EXIST!

IF YOU ARE LOOKING FOR IT............STOP!!!

Mechanical trading systems do not take into account prevailing
market conditions. Which is why they are doomed to fail.

It's said that 90% of traders are on the losing side of the market. Well then all they need to do, is trade the complete opposite way to what their feelings tell them. Emotional reactions in traders can easily be triggered [causing them to react in the direction beneficial to the ones who are pulling the triggers]......... if you know which buttons to press.

And if you think that you can develop a mechanical system, let me give you an idea of what you are up against.......

We know of one 'successful' trader who has spent 1.3 million of
his own money experimenting and trying to perfect a 'mechanical' trading system (paying 200, 000 per year on a full time computer programmer) and not one system they have come up with comes
close to making any profits.

The trader I'm referring to sticks to his basic trading method and
makes a stack of money.

And don't forget that if you buy a piece of trading software, it
needs to have rules to generate the buy and sell signals.
But who creates the rules? It's highly unlikely that it's a profitable
trader!

People trade so-called mechanical systems because they refuse
to exert the necessary proper self-control to trade properly.
Self-discipline takes more work than most people are prepared
to do. They say they are willing to make the effort, but really they
are not.

If you can't handle self-discipline then become a gambler and trade
an automated system. And if you find one that works, then tell
me about it. Because I know that you're not only lying to yourself,
but to me as well.

Good traders develop a disciplined trading method/system for themselves. It can be sophisticated or very simple, as long as it gives them the edge that they certainly will need. Then it's a simple matter of the following the rules. The thinking is done BEFORE the problems/decisions arise.

To Sum Up:

Stimulated Results – “Black Box” systems; these are trading systems that don’t divulge how the trade signals are generated. Great majority of them are absolute garbage. They show you a track record of extraordinary results but think about it; if you could build a trading system with half a dozen filters using the benefit of hindsight, couldn’t you too come up with a great system. Of course going forward is an entirely different story. High-speed number crunching capabilities allows for building great hindsight trading systems; BEWARE.