Perhaps the second greatest thrill to learning about the currency markets was learning that the whole process could be automated using a program. I was captivated immediately. I had prior experience following stocks in my native and regional markets and so I immediately took to the the speed and accessibility of the international currency markets not to mention the sheer size. I also had prior programming experience and so it was like a match made in heaven. I embarked eagerly seeking the "holy grail." However this is not going to be another one of those "there is no holy grail" articles.

In fact I believe in the existence of infinite holy grails but only if we learn to temper our expectations and one other ingredient that helped me leap from experimenting with several generic indicators in several different combinations and unlimited number of optimized parameters. That principle or what has become a dogma to me is "complex behavior is more often than not defined by simple rules". The market is one large system that constantly exhibits complex behavior an therefore by this principle certain aspects of its behavior are formed by certain simple rules. Not the whole but parts of the whole.

By employing this principle I have cut the time I spend coding an debugging and come up with several simple systems based on the basic dimensions like highs lows opens close and with at most two optimized parameters and plasticity.The last term is one I coined to mean systems that when trained on one set of data can successfully perform at or better on a test set of prices forward in time than the training set.

Finally I've found that the automated strategies that possess the above qualities are usually probabilistic in nature and not just relying on abstract rules but the relative frequency of these rules. All in all I think looking at the market from a simple solution oriented approach improves a programmers creativity and ability to build profitable systems.

A simple analogy would be to remember the cartoon "Road Runner and Coyote".


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