Trading Independence: A Goal Every Algorithmic Trader Should Have

Most of us are interested in achieving profits from Forex trading for long periods of time. Serious traders – which think like investors – want to be able to profit from their strategies and ideas for the next 10, perhaps 20 years. However many people who are newer to this arena tend to make the big mistake of putting this capability at serious risk by trusting strategies which simply do not depend on their own knowledge and understanding. When getting any type of black-box software you effectively lose your trading independence because – even if the software worked as it said – what would happen if the seller ran away tomorrow? On today’s post I will discuss the issue of trading independence and why every algorithmic trader should strive to make his or her trading completely independent from the efforts of anyone else.

Well everything is good, you have searched for the best black box system ever and finally you found one you have been able to get accustomed to, trust and profit from. Then – out of the blue – your system cannot get authenticated as it usually does when you launch the platform, the system’s website is offline and you simply cannot get your system to trade. The seller seems to be gone and any decompilation efforts are futile since he or she was diligent enough to include the trading code within a Themida protected C++ DLL. What are you going to do now?

One of the biggest and most overlooked problems with commercial black box solutions is the fact that they depend on a seller to update, authenticate and validate them for his or her customers. Since EA sellers are all for protection their “holy grails” they will never share their code – at least I have never seen such a case – and they will always attempt to make it very hard for the trader to use their software without access to some sort of external input. There are even worst cases – trade copiers – where the buyer is not only dependent on the seller for authentication but for all the trading signals he or she is getting.

In effect what you’re doing when you get into trading with almost all commercial solutions is simply to lose a lot of independence over your trading, you’re handing responsibility – as we discussed on a previous post – to another person who you cannot trust will be there for you for the next 10 or 20 years. The problem of independence does not only fall on the fact that the developed could just “run away” but the developed could effectively die, fall ill or have a bunch of other problems that make him or her end the business. This is one of the chief reasons why none of the “serious traders” I know would ever consider such commercial solutions, why would you trade something which is not transparent to you? Why would you use a trade copier or a black box solutions which depends on some third party which is bound to fail at some point in the future?

The solution to this dependence issue – as with the issue of profitability in itself – lies in the quest for trading responsibility. Traders should always be responsible for their own trader and wield within their own brains the ability to be able to get a profit from the market. In algorithmic trading this means that traders should not depend on any third party to use their systems and they should be able to understand, modify and update the code of their systems as they see fit through the next 10 or 20 years. How else would you guarantee that you will be able to continue trading in the same way for decades to come? How will you be certain about your ability to continue with your trading income level if you do not completely rely ONLY on yourself for profits?

Every trader – in my mind – should be extremely concerned with the question of self-responsibility, self-reliance and understanding. This is especially true if a person depends on trading to get money for living expenses. Imagine if I have a certain level of income and suddenly it gets destroyed by my inability to continue using a copier or authenticate a commercial system. What would I do then? If any commercial system worked as advertised then many people could reach a living standard from them and this would eventually cause a catastrophic event whenever they couldn’t trade with their black-box solution anymore. Any wise person will agree with me in that it is not a good thing to depend on a third party for the sustainability of your trading, especially when your trading profits are so critical to your standard of living.

Any serious trader understands this issue and will commit to the development of an in-depth understanding of trading and the use only of open source coding strategies which they can modify, understand and use without the need for ANY third party. Being a responsible, independent and self-reliant trader is a basic aspect of trading long term success, something which is in part demonstrated by the fact that none out of the many successful traders I have come to know through the years uses any type of black-box solutions. Yes, many use algorithmic systems but always systems they developed, have the code for and completely understand. Certainly if you know any person living from trading with a black box solutions let me know, I will very interested in doing an interview :o)

If you would like to learn more my work in trading and how you too can earn a true education in automated trading using Metatrader and powerful statistical tools please consider joining, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach towards automated trading in general . I hope you enjoyed this article ! :o)

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One Response to “Trading Independence: A Goal Every Algorithmic Trader Should Have”

  1. Michael says:

    Excellent article that underscores the responsibility angle…something you don’t see often in pieces like this. Bravo! And your own website looks solid too. I’ll sign up and see what your videos can teach.

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