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Modus Trading

Trading Truth 113

"The quality of your trading software is
vitally important to your chances of success."

Systems traders are by far the most successful participants in the commodities markets and there is very good reason for this.

The whole of their trading employs methods which can be repeated and so they are able to build a base of knowledge and experience which can be added to - allowing them to gradually improve their methods over time.

Obviously traders do not want to reinvent the wheel every time they need to evaluate new ideas and neither do they want to ignore the advances made by others in the past.

Particularly, they don't want to produce their own trading software because this is a complicated task - even if you possess all the trading knowledge and programming ability to do so.

On the other hand a professional trader doesn't want just any old software - he would much rather not be a trader at all if that was the only choice.

Trading software is specialized for a number of reasons.

It must be capable of running tests which simulate live trading conditions as closely as possible.

Just think what it involves to run a long period test where every day must be handled as if it was a live trading day - making all necessary decisions about how to deal with trading signals coming from various commodities, deciding every different position size etc then taking appropriate actions before passing on to the next day of the test period.

Doing all of this over and over again - perhaps thousands of times before completing all the days in the time period for each commodity - for this one particular parameter setting.

Then doing the whole lot hundreds or thousands of times more to complete the range of parameter settings to be covered. You want all the detailed results for the whole of this test to be produced for you automatically within the time it takes you to drink a cup of coffee.

That is just one of the things the professional trader demands from his trading software.

Given the necessary parameters, the trader's software is required to deal completely automatically with all issues concerning risk management, money management and portfolio management.

Furthermore, it must be the very same software he uses for live trading, which ensures his real trades will be conducted in exactly the same fashion as his tests.

There are many things to consider when selecting suitable software but you only need to get it right once.


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