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Depending on the automated strategy, they can dramatically reduce risk though. That has value well beyond the simple return of buy and hold, where if you don't
by adjkant 9y ago
Depending on the automated strategy, they can dramatically reduce risk though. That has value well beyond the simple return of buy and hold, where if you don't time the sell perfectly, it's all useless. I think that's the big advantage automated trading strategies can have if designed well.
- dperfect 9y agoYes - I found that to be true in my testing as well. The configurations optimized for highest absolute returns did very poorly in unfavorable market conditions (and max drawdown became significant), while there were some that performed moderately well and were much less affected by downturns in the market. Like most investments, it really comes down to the same thing: risk vs return.
- AznHisoka 9y agoReduce risk but also involve more time and energy.
- adjkant 9y agoNot really for an automatic trading algorithm. Write once, use for quite a while. Say a week of work (40 hours) for returns say 1/10th of holding is still quite worth it. Both of those numbers are quite conservative.