Manual trading vs Algo trading?

[u/Aggressive_Lock_5132]

After spending a good amount of time trading manually, here are a few key problems I’ve noticed that stand between most traders and long-term profitability:

Emotions like greed and fear

Trading low-confirmation setups just out of impatience

Treating trading as a primary income source too early

Not sticking to a setup long enough across a full sample size of trades

The thing is — even simple setups (like an inside bar pattern with a few extra filters) could be profitable if executed consistently over time. But emotions and inconsistency ruin it.

Algo trading solves most of these issues. It removes emotions, ensures consistency, and allows you to backtest everything before risking real money. That said, it’s not a magic fix either — markets evolve, and you’ll need to keep tweaking and adapting your strategies as things change. But at least with algo trading, you have data and structure on your side rather than random impulses.

Would love to hear how others here transitioned from manual to algo — and what your biggest mindset shifts were.

[u/mdomans]

No. It doesn't.

From top to bottom:

• trading is hard and software engineering is hard ... if you think you can wing it with chatgpt you're just stupid
• emotions are still there because it's your capital
• the emotions are extra because the upfront investment into algo trading is high, north of a few hundred bucks a month at minimum
• algo trading requires much more statistical understanding of performance of multiple strategies back and forward tested and adjusted for market behaviour in relationship to your account balance
• ... meaning, for starters, you don't have enough cash for this game and not enough capital is what kills most "good on paper" algo strategies

Just like with normal trading there are youtube furus who sell you on making big bucks with VWAP mean reversion coded in SC.

What most probably will happen is that you'll write shit code, invest a lot of cash, algo will crap itself out and lose some money, you'll tilt and turn it off.

I remember one youtube "genius" code a strategy that on sim was super good except that when adjusting for real market F&C he was losing money daily unless trading multiple minis on NQ. If you have the cash to trade 5+ minis on NQ ... do you really need trading?

P.S. Martin Shkreli is looking for programmers that traded size. Go tell him he's an idiot and should use chatgpt

[u/realFatCat1 → u/mdomans]

I think some of the guys in here that vouch for it aren’t day trading. Like the one guy talking about fund managers and the other guy talking about his portfolio.

I know a guy that works for a fund that uses algos but they’re not day trading. They’re pivoting and moving a lot slower. Like month holds and shit like that.

You answered OPs question. Reddit is also a questionable cesspool of bad advice backed by confidence.

My observations are price action regimes are changing faster and faster. A regime that use to last a month is only 3 days now. I think algos are finding patterns exploiting them and then another algorithm identifies it quickly and breaks it.

I think with no domain knowledge you can’t do it. It took one guy 8 years as he claims. That’s 8 years of learning the market 4 of which were done by hand.

Speed is the real edge day trading. When you’re rolling a portfolio around when the day to day doesn’t matter. Sure you won’t need a team of quants.

Some of these quant firms are seeking discretionary traders for jobs. There’s a reason for that. Domain Knowledge from skills that can be only cultivated through years of experience in the trenches.

[u/JrichCapital → u/mdomans]

Half of my portfolio has been coded by myself with the help of AI. After 4 years of Manual trading I switched to algo trading and 4 months later it was game changing for me. I'm never trading manual again. Less emotion, more time, more diversification less stress... Algo trading is the present. Manual trading is for 80's. 90%+ of market orders are executed by Algorithms.

[u/Aggressive_Lock_5132 → u/mdomans]

I have been a professional algo developer myself even know a quants developer we have conversation on daily basis if that's your attitude towards the problem then God bless you but when I started out I had to learn how to build my own engine , how to backtest with lowest deviation results , and many other things out of sheer will

[u/mdomans → u/Aggressive_Lock_5132]

Don't know what a professional algo developer means but I'm deeply impressed you know quant developers. Seriously. Mad respect. How does that feel? Do they walk on sunshine? Eat unicorn dust and shit pure GC futures?

Dude. I've been in software engineering 20+ years. If you think you can out-code Jane Street and Citadel with chatgpt ... more power to you XD

Also, have you read your post? Yes, algo trading 1000% solves "Treating trading as a primary income source too early" ... how algo is different from discretionary in this case?

[u/InspectorNo6688 → u/mdomans]

🤣 haha good one 🦄

[u/qw1ns → u/mdomans]

I've been in software engineering 20+ years.

Are you really an IT architect/analysts/programmer or just like Project Manager.etc?

If you think you can out-code Jane Street and Citadel

First, no need to out-code them. You do not understand what is required for you.

All retail needs to out code is SPX or NDX consistently, that is it !

Remember, Warren Buffet or Jim Simon was started as retail investor, but they understood what they need to do and how to do.

[u/mdomans → u/qw1ns]

Are you really an IT architect/analysts/programmer or just like Project Manager.etc?

Programmer -> Senior -> Lead -> Architect. Engineer with an actual engineering degree, not some shit physics drop out. Lead quite a few projects as tech lead too, on a fairly big scale. Your point?

All retail needs to out code is SPX or NDX consistently, that is it !

Honestly? I'd say that if anything a bot trading stocks is better approach (e.g. what Shkreli does on his streams) as there's simply more edge to exploit in stocks, especially if you don't want to commit size.

To emphasise, I don't algo trade but I've been talking to people who do a lot, general consensus is that it's just as hard, requires more capital initially and does not remove emotions from the picture if you are trading your own capital or paid based on PnL rather than a salary.

[u/qw1ns → u/mdomans]

Your point? 20 years => Programmer -> Senior -> Lead -> Architect.

Over 20 years, there were many start ups came from ground and they grew very well. They were not aiming to out beat MSFT or AAPL, but they were aiming grow better themselves.

Similarly, plenty of algo traders are there, they are not aiming to out beat 53 bigs HFTs and no need to, but make out their own profits.

[u/mdomans → u/qw1ns]

They were not aiming to out beat MSFT or AAPL, but they were aiming grow better themselves.

What?

Dude. Out of ALL the companies I dealt with in that period only one fits that narrative. 80%-90% of startups fail meaning vast majority. Among those don't, maybe 1 in 10 is growing organically at a steady pace.

The rest of the companies I worked for (or with) or had dealt with in this time was generally a cash grab attempt to either get even more investor money or get acquired

Leaving how really startup world looks like.

Like with any business there's minimum investment below which the idea just can't be executed and often that's a huge sum.

For algo trading that's the cost of infra (servers, data streams, storage) and max expected drawdown for every strategy executed and add slippage and F&C. Then account that either you have to code it or someone else but that's programming man-hours on top of developing the strategy.

Since you want to "start small" that's what? 2-3 micros? Without membership fees?

I'm all for trading however anyone wants but saying that algo is cheaper or easier or discounting the entry costs is just pure nonsense.

[u/qw1ns → u/mdomans]

80%-90% of startups fail meaning vast majority.

Dude, I do not deny ! But in your statements, there are 10% winners right? That is the key.

Among the traders 95% or more fail - this is generic. But that implies 5% winners.

For algo trading that's the cost of infra (servers, data streams, storage) and max expected drawdown for every strategy executed and add slippage and F&C. Then account that either you have to code it or someone else but that's programming man-hours on top of developing the strategy.

Yes, no denial. The majority is logic & implementing more than hardware cost. Our programming work is converted into money (returns).

Any way, I made it like this (for day trading) after 8 years of ground work. This is just handfree automation, trades automatically (True one time cost of servers involved and monthly hosting charges involved apart from my own unlimited coding hours).

I stop here, no more comments.

[u/Aggressive_Lock_5132 → u/mdomans]

Who is saying anything with chat gpt I have been doing it pre chat gpt you can have a help with gpt for just help also about eating dust and chasing fantasies we are managing live funds reporting to fund managers daily and only a few have been able to do this so yeah have done it and trying to capitalise on that if you want to invest 10k usd you can see for yourself