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Day 29 is January the 29th and it is a Friday.

 

Not much happened since yesterday, the system closed one profitable trade.

 

Currently we have 18 positions, most of them are open losses.

 

Yes, I know that you have learned that you should keep your losses short and let your profits run.

 

But actually it is possible to do a very simple experiment to find out if this is good advice.

 

Algo Trading makes it possible to run a simple Expert Advisor and set a fixed position based stop loss.

 

You can also use a trailing stop or a breakeven stop.

 

There are other stop loss variations, for example you can use the Parabolic SAR indicator for your stop loss.

 

Whatever you do, it is possible to run the same backtest over and over again and find out if your results will get better or worse.

 

And after you have a good idea if something works and why it works, you can do a very simple thing.

 

You just try to do the opposite of what you consider to be a market advantage.

 

Because if that is true it should be possible to predictably ruin your account by doing the opposite.

 

By the way, I can recommend reading the book predictably irrational from Dan Ariely.

 

Everything from this guy is helpful to overcome so called heuristics.

 

Heuristics are something like abbreviations of the human mind.

 

And I also like the insights from the books that have been written by Daniel Kahnemann. 

 

Human psychology is totally against what I think is needed to improve our results for automated trading.

 

A little bit off topic is the book called “Feeling good” from Dave Burns. 

 

It has nothing to do with trading or economics, but actually I got one of my best insights in 2020 from this book.

 

Don’t quote me here, but my interpretation is as follows.

 

Dave Burns talks about almost a dozen things that the human mind does with what he called ants.

 

Ant stands for automated negative thought and one of those things is that humans tend to use generalisations like “Nothing good ever will happen to me in my entire life”.

 

And my 2020 insight is that he says that you should train to identify tricks of the mind by just learning what they are and by just naming them.

 

It is like once you can name those things, they no longer have power over you.

 

I actually learned and did that and it helps for a lot of things – not just for automated trading.

 

If you want to join this journey and benefit from the findings to improve your own algorithmic trading system, just keep watching this automated content and be my guest!

 

So what do you think? What kind of book do you consider to be helpful? Let me know.