Trading pitfalls, man versus machine. I lose!
NotQuiteRandom said:
Data Miner, is your analysis 100% Neural Network based or do you also use other methods?
Thanks,
NQR
Hello NQR,
In answer to you question, yes, entirely and completely.
If ever I try to add in my own expertise(?) and knowledge(?) returns are far less reliable. The temptation for going against the neural predictions is never far away ... and I do admit to occasionally falling foul of my own golden rule which is;
"DM, the stats understand the situation far better than you do, so don't meddle!"
Tonight for instance, my nets tell me to oppose both Man Utd and Arsenal on the spreads currently quoted. My head tells me that it must surely be a dangerous ploy going against Man Utd especially in their current mood ... But hey! what do I know ... bets have now been duly placed.
A couple of good recent examples; Last month my football trades were going through a torrid time and a midweek-weekend-midweek patch saw me lose 600 points. I examined the "evidence" and decided that the tail-end of the season was not representative, and I should stop my football trading for the season. Maybe the cowards way is not to check-out "what
would have been" after that decision, but why bury your head in the sand? The following weekend-midweek-weekend trading would have recouped all of the 600 points, and made profit on top, had I not
invented reasons to curtail my trading in this area. Bugger! Football trading has been resumed
😱
Example two: On Saturday (15 April) my NNets suggested a sell of both distances and SPs at Kelso. However, the racecard included a two-runner, three-mile steeplechase ... cue for my head to takes over the situation ...
Common sense (?) tells me to leave this well alone - too risky.
The outcome almost goes without saying? The distance spread
would have returned a 296+ profit and the SP a 48+ profit. Double bugger!
I suppose my expertise & knowledge (this time without the question marks) is in the area of making best use of neural networks, which is by no means a straightforward business. But I've been using them in this area for over 10 years now, and you would have though by now I'd be able to stick to my own rules.
I'm still working on it. In a darkened room I'm repeating to myself over and over
"DM, the stats understand the situation far better than you do, so don't meddle!"
DM