System Improvement

"Professional traders spend time
maintaining their systems."

Systems traders delegate their day to day trading to their computers and so are 'forbidden' from interfering with any trades in progress. To do this would break their 'First Commandment of Trading'.

Instead, they spend time 'off-line' looking at trades and thinking about ways to improve their systems. This is as it should be - and most traders enjoy doing research work immensely.

This activity is much more than just a leisure pursuit because it is very beneficial to keep in touch with your system for various reasons.

As time goes on, the markets get more and more used to the systems traded on them and so the performance of systems tends to deteriorate as they become stale.

By regularly monitoring the performance of your system you will remain aware of its stronger and weaker aspects and ideas will occur to you about ways you could perhaps improve it.

Improvement action might be a positive - to enhance its best characteristics or it may be to strengthen some of what you consider to be its weaker parts. While you are considering improvement, your focus will be on the system rules and any filters you use.

This work will ensure that your system remains as effective as possible and by being keenly aware of the way your rules operate you will know if there is any loss of effectiveness creeping into your system.

By maintaining such familiarity you will be less likely to be surprised by events and more likely to keep your system fresh.

Another very important benefit derived by professional traders from research work is that by keeping in regular contact with their systems they feel more comfortable delegating them (without interference} to their computers. This is of course the prime requirement for system trading.

Professional traders spend time maintaining and remaining familiar with the way their systems work and newcomers to commodity trading should learn and understand the importance of doing this.

 

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Copyright David Bromley 2006
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