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Algotrading

Do you know what it takes to be an Algo Trader?To be an algo trader, you typically need to have a strong background in computer science and programming, as well as a good understanding of financial markets and trading strategies. Here are some of the important elements you need to be a top Alog Trader: Experience with database management and data analysis Knowledge of statistical analysis and machine learning techniques Understanding of financial markets and trading strategies Strong analytical and problem-solving skills Attention to detail and ability to work under pressure Overall, to be algo trader requires a combination of technical expertise, financial knowledge, and strong analytical and problem-solving skills. It can be as simple as having an easy and proven mechanical strategy that you can demo, back test, forward test, analyse, monitor and evaluate your results. This way, you'll have a decent idea on what your system and strategy potentially could yield in the near future. Trade well, live free. MATI Trader Feel free to follow our socials below if you enjoy this content :) Thank you.
JSE:J200Education
by Timonrosso
53 pip profit + Horizon wins yet again! + New Horizon tradeIf these ranges lasted forever, I wouldn't mind at all. I took 53 pips this morning long, this was something I posted 2 times about last night and this morning, so check those out for a more in depth look at the signals that lead to that move. It's really important in this market to be in before the move happens, you miss out on a lot of money, and your exposure almost triples when you chase the market. Remember that. Horizon took 76 pip profit today from last Friday. That's nearly 50 pips net, since the beginning of this range. It took a 60 pip loss after being up almost 80 pips on Thursday. It couldn't find a valid exit, which is annoying considering that this strategy could have produced over 140 pips in profit last week. Trust me I've played with trailing stops and static profit targets with this strategy and they just don't work nearly as well as just letting trades run and waiting for a strong exit signal. Trade number 3 was the worst loss Horizon has taken to date, I mentioned earlier that Horizon assesses stop losses on bar close and not in real time, so the strategy is exposed adversely to large break out candles like the one in the picture below. This is a risk that I'm willing to accept though because A. Horizon mitigates that risk using multiple confirmation protocols and B. the RR is 3-4 times the losses. This strategy is designed to take 30-50 pips on average, with occasional 100-200 pip trend. As things stand, Horizon's average loss is only about 20-30 pips. Plus Horizon's wining 6-7/10 at this point so it's all good! Plus I'm adding some logic this week that I'm hoping will boost performance even further. So far it's 2/3 and currently 30 pips up on it's 4th live trade. That said if I DID find a better alternative to this stop loss strategy, I would more than likely cut my max draw down in half. It's sitting at about 8-9 right now, which I would love to get down to about 5% using the same risk. Horizon's current exposure is 1.7% per trade because of the draw down rules that FTMO and other prop firms put in place. With my own capital, I could easily raise that to 2-3%, I don't really want to though (yes I do) Horizon , like I mentioned has pyramided a short trade which has been as high as 35 pips profit, so far, so this one's looking like a winner as well. Overall that's 150 pips taken between me and the machine in the last 4-5 days, so very happy, and I'm praying for even further success in the coming weeks. I'll link each post so you can audit my trades. I post these trades well before the moves actually happen.
Education
by NeoDaNomad
2
Entries do not matter (Course #3)Entries do not matter (Course #3) One thing that I have read many times but never believed is, entries do not matter. After trading a whole lot of different strategies in a repeatable fashion (algo trading), I found that indeed, entries don’t matter. Of course, if you get in at a bottom for a long or at the top for a short, it feels nice and the entry is absolutely great, because you get the maximum possible outcome in you think about the market played out. This being said, over time, what will make you successful is really a factor of when you exit AND your system overall (covered course #5). You should not look at the market and hope to get in here and exit there, because the market is not consistent. The market has no rules and no discipline. Instead, you should look at your system and hope to get out when it’s the right time. It is the same in life, look at what you can control - here this is your system, since you can't control the market. READ THIS AGAIN. In other words, let’s say I always enter at the wrong time, but the price always goes in my direction for at least 0.25% before going the other way. If I can exit on that 0.25%, I will make money! If my – consistent, disciplined - trading system can get out at 0.25% all the time, it doesn't matter I had a bad entry, because first of all I am not losing money and second, I am making some. So yes, entries don’t really matter, but exits do. Look at Crypto Face of Market Cipher. Very often he enters before a pump, because he is good and because his indicator is good as well. You can call this a “good entry”. But sometimes, he does enter and the trades goes against him. Many times I noticed he would not close his trade, and just wait overnight for it to come back. Let’s say the price does come back, and now goes into profit – he exits. What mattered? His exit. If he had exited when the trade was against him, he would have lost money. In his book “Trade your way to financial freedom”, Van Tharp talks about it and he explains how a random entry system can beat any other system with a specific entry technique. Whether you are trading algos or manually, you have to understand that it doesn’t matter when you enter. What matters is your system and when you exit. My #1 profitable algo is designed to never get in at a bottom or a top, for respectively a long or a short trade. Yet, this algo strategy is profitable.
Education
by Maddrix_club
9 things that do not come easy when implementing Algo TradingA collection of less obvious hurdles you may discover on the Algo trading implementation journey. #1 Data is king Some brokers provide basic data feed for algo trading, but more often you will be looking for: Decent amount of historical data of decent quality for backtesting. Real time market data. Not the end of the day, and not 15 minutes delayed. As close to real time as possible, with possibility to subscribe for data push notifications. Data aggregated from multiple exchanges. If you want to make decisions (you do) based on pre- or after- market hours data, this is a must have. No or reasonable limit on the number of tickers you can get data for concurrently. Data on market index constituents. And ideally historical data, as constituents change, and you want to backtest our algos without “cheating” (survival bias). Corporate and fundamentals data. Historical data is quite useful here as well. Even to satisfy this short list, you need a specialized data provider or a few. For personal use it comes to a couple of hundred dollars of fees a month. It might be under one hundred if you sacrifice some requirements and data quality. #2 Orders can be over-executed Ever encountered a situation when your limit order and stop-loss order were executed simultaneously? Well, it does happen. It’s much more rare when trading manually, but when a program is able to submit orders so much faster, and generate higher order flow, probability of it naturally increases. A trading engine must be able to recognize such situations and react accordingly. I.e. calmly close the resulting short position (or long position if you are exiting a short trade). #3 Not all brokers let you set order validity Quite typical for brokers is to allow an order validity of 1 day, but not shorter. A common situation is that you submit a buy limit order, the market goes up, our order remains pending, and never executes expiring at the end of the day. A good trading engine would be able to handle such cases and provide configurable validity. E.g. submit a limit order and if it does not execute after 5 minutes — cancel the order and try something else, adjust the price or try a different ticker altogether. #4 Circuit breakers is the new reality Remember when the SEC halted trading on meme stocks or the stocks would not trade during the covid news? Halts happen for various reasons, so a trading engine needs to react accordingly. I.e. not go frenzy during the pause, and continue trading as soon as trading reopens. #5 Stock splits, ticker renames, mergers and acquisitions are a lot more challenging for an algo Apple, Tesla, anyone who decides to do a stock split, you need to handle that properly as well: take it into account when exiting the trade, calculating profits and benchmarks. Same with reverse split, which is quite common for the stock trading under $1. As well as another subtle but similar in nature event of issuing stock dividends by a company. Facebook renames to Meta and changes the ticker. Hertz files for bankruptcy and emerges back on the market under a new ticker. Cloudera gets acquired and becomes private. All these and many more need to be smoothly handled by the engine, data needs sourced to be linked back to action. #6 Penny stocks need a special treatment Stocks under $1 are quite special indeed. Besides the risk being delisted if a stock trades for under $1 for a period of time, such stock has also a privilege, it can be traded for sub-penny amounts, i.e. for multiples of $.0001. You should carefully handle that in the trading engine, so you can benefit from more precise order placement and stop losses. #7 Index constituents are harder than it should be to For a good trading engine you need an ability to continuously screen a set of securities for desired market patterns. Probably you don’t want to manually enter a bunch of tickers, but use well recognized “buckets” such as market indexes, S&P 500, DJIA, and others. And of course you need to monitor how the constituents of these buckets change over time. Get the historical data and index updates in a reliable way is a project on it’s own. #8 Speed of execution matters a lot Working with the arrays of data, monitoring and trading multiple tickers soon starts taking quite a bit of time, minutes or even hours. Performance optimization, parallel execution and scaling are soon to come as a requirement. Even for a retail trader delays longer than a few seconds may noticeably impact the gains. #9 Unattended execution is costly You don’t want the algo to stop trading when you close a laptop, or don’t have internet connectivity. To achieve unattended execution, you need the right infrastructure, monitoring, backups, disaster recovery and many other fun things. It’s an extra buck but definitely worth the spend.
AMEX:SPYEducation
by BreakingEquity_official
Position Sizing (Course #0)My very first course was going to be the winning rate. As I wrote down the other ones, I realized that position sizing, understanding what it is and how it works, was actually the most important part of it all. Therefore, I have decided to create this course #0 as the one you MUST take first to understand the other stuff. Understanding position sizing is very tricky actually. The very first time I learned about it was with Crypto Cred. He’s got a lot of great courses on trading and Technical Analysis, I also recommend you checking him out. So here is what most people think about doing: I will buy 100% of my account balance into bitcoin ($1,000 account), my account size will then be $1,000. Or, I will buy with 15% of my account, so my position will be $150. Even better, I will go 10x and my position size will be $10,000. This is great and all, but this is NOT how you should look at it. Whenever you trade, you MUST – SHALL – HAVE TO HAVE – an plan on where and why do you enter, where you need to exit at profit AND where you need to exit at loss. If you don’t want to accept that, no good. If you want to invest into something, you MUST – SHALL – HAVE TO HAVE – an plan on where and why do you enter, where you need to exit at profit AND where you need to exit at loss. If you don’t want to accept that, no good. It’s like driving, you must know when to turn, accelerate and break. So, because you will have a plan, you will know OR you will decide where to put your Stop Loss. For example, you want to put your stop loss the 20 EMA. Or, you want to put your stop loss at the low of the previous candle. Or, you want to put your stop loss 0.5% below your entry. Or, you want to put your stop loss at the previous support level. Once you have decided where to put your Stop Loss, based on your strategy and on the structure of the market/chart, you will need to decide how much you will risk on that trade. Basically, trading is like betting. You will bet/risk an amount of money, hoping to make a profit. To give you an idea, 1% risk is cool, if you want fast results you can go to 2-3% (of your account balance). Some great traders like to do 5-20%, but this is super high risk. 5-20% on an intraday trading strategy (in and out during the same day), then this is degen to me. On an intraday 1-2% risk per trade is good. So now, you are starting to be good at position sizing: you know where your stop loss will be and you know how much you will risk. Let’s go back to our examples of stop losses. Example 1: you want to put your stop loss the 20 EMA Example 2: you want to put your stop loss at the low of the previous candle Example 3: you want to put your stop loss 0.5% below your entry Example 4: you want to put your stop loss at the previous support level On the above chart, here are the distance between your entry and the stop losses: Example 1, the 20 EMA is 0.28% below your entry. Example 2, the low of the previous candle is 2.30% below your entry. Example 3, the stop loss is exactly 0.50% below the entry, like you decided. Example 4, the previous support level is 4.60% below your entry. Now let’s calculate your position size: Magic Formula: Position size = Risk % / Distance to SL % Example 1: 1% / 0.28% = 3.57 This means your position size will be 3.57 times your account balance. Example 2: 1% / 2.30% = 0.437 This means your position size will be 0.437 times your account balance, so a little bit less than half of it. Example 3: 1%/0.5% = 0.50 Your position size is equal to half your account. Example 4: 1%/4.60% = 0.22 Your position size will be 0.22 times your account. So now, do you understand that leverage should only be necessary when your strategy calls for a Stop Loss that is positioned at a distance that is less than your risk %? This is example 1. You should NEVER think “I want to use 10x” just for fun. You should only apply leverage because your position size calculation told you so. Conclusion: Position Sizing is the calculation of how much should your position be, so that when you hit your SL, you only lose what you planned losing. Position size = RISK % / DISTANCE TO SL %
Education
by Maddrix_club
1
Can Just One Trade a Day Be Any Good?Everyone wants a trading strategy that allows you to make one trade per day, yet you can still beat the market. Here we explore how you could make one. The Strategy: Gap & Go for Biotech Stocks We decided not to reinvent the wheel and just took the highly popularized "Gap & Go" strategy. The “Gap & Go” is looking for a stock gap up from the previous day's close price with the goal to follow an uptrend. We use biotech stocks as they tend to have higher volatility compared to other industries. You can easily find way more information about the idea and the thesis behind it. We also have a detailed explanation of the enter and exit conditions below. Screening Criteria Biotech Equities (we're using iShares Biotechnology ETF $IBB as a list) Up in the morning 3% or more Are above pre-market high and yesterday’s high Enter Criteria (when to open the position) Stock price is above EMA 9 Stock is going up and EMA 9 is going Exit Criteria(when to close the position) Price crosses below EMA 9 and stays there for 3 bars End of the same day Trailing stop loss of 1.0% Conditions $10,000 trading capital Do not trade early close days Only one trade per day If no equities meet the screening or entry criteria, do not trade The Results: +58% gain over one year Profit $5,801.4 | Wins 48 | Losses 49 Looks pretty decent, but we think that’s just the beginning as we’re going to improve it even further by looking at overall market conditions like $SPY behavior or news. Disclaimer: Not financial / investment advice
NASDAQ:IBBEducation
by BreakingEquity_official
Most gains for $SPY happen overnight: a quantitative studyAccording to the New York Times 2018: most gains for $SPY happen overnight. "If you had bought the SPY at the last second of trading on each business day since 1993 and sold at the market open the next day — capturing all of the net after-hour gains — your cumulative price gain would be 571 percent." We thought why not to review this thesis in a bit more detailed way. We set a simple backtest that is not going back to 1993 but to Jan 1, 2010: hold overnight and sell in the morning. The Setup $10,000 to trade daily (nightly actually) Trading only $SPY Buy at 3:59 using a market order Sell at 9:30, 9:31, 9:32, 9:33, 9:34, 9:35 (let's see which one does better) using a market order Do not trade on early close days Algo Parameters Enter Criteria: 1.#No condition - just enter a position 2.True Exit Criteria: 1.#Exit next day, when there is a position 2.$Position.size>0 The Results Strategy: Hold overnight, exit 9:30 Total wins: 1651 Total loses: 1359 Total gain: 79.54% Total gain 2022: -2.59% Strategy: Hold overnight, exit 9:31 Total wins: 1629 Total loses: 1341 Total gain: 80.04% Total gain 2022: -2.88% Strategy: Hold overnight, exit 9:32 Total wins: 1628 Total loses: 1342 Total gain: 88.80% Total gain 2022: -3.31% Strategy: Hold overnight, exit 9:33 Total wins: 1618 Total loses: 1352 Total gain: 94.28% Total gain 2022: -3.96% Strategy: Hold overnight, exit 9:34 Total wins: 1617 Total loses: 1353 Total gain: 94.11% Total gain 2022: -3.63% Strategy: Hold overnight, exit 9:35 Total wins: 1633 Total loses: 1337 Total gain: 90.48% Total gain 2022: -4.36% Disclaimer: This post is for fun and educational purposes only with no attempt to beat buy and hold. Do not use this as trading/investment advice.
AMEX:SPYEducation
by BreakingEquity_official
2
Can pre-market tell you anything: a quantitative studyPre-market is an exciting time when you start looking at your screens to check what's going on. There is a lot of information to consume: news, reports, charts... you can continue the list. In this study, we explore if price movement in pre-market can provide any indications of what the day is going to look like. There are 3 setups we tested from 2015 to 2022 Up 1%+ in pre-market Down 1%+ in pre-market Flat in pre-market (open and close are within 0.1%) Trading Conditions $10,000 to trade daily Trading only $SPY Buy at 9:30 if the condition is met Do not trade on early close days The Results: Most of the time when it's down in pre-market it tends to rebound. It's well known that bulls run by night and seem like tend to buy the lows if the early hours didn't work out. 2015: Down 1%: Gain 3.42%, Win/Loss 2/3 Up 1%: Gain -2.56%, Win/Loss 1/1 Flat: Gain -5.9%, Win/Loss 37/42 2016: Down 1%: Gain 1.26%, Win/Loss 2/1 Up 1%: Gain 2.66%, Win/Loss 2/1 Flat: Gain -2.11%, Win/Loss 37/39 2017: Down 1%: Gain 0%, Win/Loss 0/0 Up 1%: Gain 0%, Win/Loss 0/0 Flat: Gain 6.22%, Win/Loss 71/45 2018: Down 1%: Gain 3.61%, Win/Loss 2/1 Up 1%: Gain -2.73%, Win/Loss 0/2 Flat: Gain -1.44%, Win/Loss 48/35 2019: Down 1%: Gain 0.37%, Win/Loss 2/1 Up 1%: Gain 0.33%, Win/Loss 1/0 Flat: Gain 3.14%, Win/Loss 55/46 2020: Down 1%: Gain 3.85%, Win/Loss 8/9 Up 1%: Gain -2.85%, Win/Loss 5/7 Flat: Gain -3.02%, Win/Loss 39/27 2021: Down 1%: Gain 0%, Win/Loss 0/0 Up 1%: Gain 1.4%, Win/Loss 2/0 Flat: Gain 1.13%, Win/Loss 35/34 2022: Down 1%: Gain 1.25%, Win/Loss 1/1 Up 1%: Gain -3.26%, Win/Loss 0/2 Flat:Gain -2.61%, Win/Loss 2/2 Disclaimer: This post is for fun and educational purposes only with no attempt to beat buy and hold. Do not use this as trading/investment advice.
AMEX:SPYEducation
by BreakingEquity_official
Most traders underperform to a coin flip day trading botFirst-time day traders are most likely going to lose money. CNBC quotes at least four studies with a similar conclusion: 90% of traders fail to make money. The primary reason that most traders fail is not because of their strategy, it is because of their psychology. As Benjamin Graham liked to say, “The worst enemy of the investor is most likely himself.” To quantify how bad the fact of 90% losing money is, we compared it to a coin flip trading bot which makes a trading decision based on a virtual coin flip random(0,1) Below are the results for Trading $QQQ Random enter and exit at 10min intervals No stop loss Always exit EOD (no hold overnight) 100 simulations per year to smooth it out Algo parameters: Enter Criteria: $Random.random >=0.5 Exit Criteria: $Random.random >=0.5 Year over year performance: 2016: Average Performance 1.92% Best Performance 20.38% Worst Performance -10.21% Average MDD -6.65% 2017: Average Performance 3.08% Best Performance 10.92% Worst Performance -4.10% Average MDD -3.99% 2018: Average Performance -3.56% Best Performance 21.65% Worst Performance -21.08% Average MDD -12.05% 2019: Average Performance 4.80% Best Performance 15.61% Worst Performance -6.75% Average MDD -6.03% 2020: Average Performance 6.66% Best Performance 33.63% Worst Performance -17.12% Average MDD -10.69% 2021: Average Performance 2.41% Best Performance 26.31% Worst Performance -17.97% Average MDD -7.25% 2022: Average Performance -4.21% Best Performance 3.91% Worst Performance -10.00% Average MDD -5.40% We expected it to perform worse than that ;) Disclaimer: NOT financial/investment advice
NASDAQ:QQQEducation
by BreakingEquity_official
What type of trader are you? Please comment belowHello friends, Today I thought in helping you understand different Forex Trader Types and probably you can identify yourself in which category you fit in so you know how to approach the market each day. There are 6 type of traders as far as I know: 1. News or Fundamental Traders ✅Fundamental traders focuses on Fundamental events that may potentially drive the market in a particular direction, causing spikes in a certain direction. ❇️This type of trading will be best for individual traders who likes to keep up with world events that can cause spikes in the market and seek to take advantage of these spikes that can last for a short period of time ranging from few seconds to 15 minutes. ✅This type of trading can be extremely risky as the market can change direction very fast which can cause a trader loosing his/her entire funds, but with good trading skills and experience this type of trading can be very rewarding and offers fast returns. ✅Fundamental Traders would seek to trade the Non-Farm Payroll data, employment figures, elections, CPI and GDP. 2. Scalpers ✅Scalpers are traders that focuses on holding positions for a short period of time from few seconds to a few minutes. ✅This type of trading requires a trader to sit on computer the whole day or during the time when the market is very volatile to take advantage of the small movements in the market to be able to make profit. ✅A trader may be inclined to take so many trades, making smaller profits each time to be able to make good return at the end of the day. 3. Day Trader ✅Day trader is more less like a scalper, taking short positions during the day and making sure that all positions are closed before the end of the day to stay away from negative news events, market gaps or widening of spread. ✅A day trader should be alert to changes in market direction and manage his positions swiftly and accordingly. 4. Swing Trader ✅Swing traders can hold positions for some couple of days and up to perhaps a couple of weeks. ✅Traders of this type analyses the market and take advantage of changes in trend direction and catch a trend while it is still fresh and ride this trend for a longer period of time before closing positions. ✅They would not be required to sit on computer the whole day. Rather, they would analyse, calculate the cost and take the position and they will only get back to computer after some couple of hours or another day to monitor the movement. ✅This type of trading is good for those that hold other businesses or jobs as they can make time for other activities to be done. 5. Position Traders ✅Positions traders hold trades for longer periods of time ranging from a several weeks to years. ✅For this type of trading patience is required to be able to hold trades for that long and a trader should have a very good knowledge about what moves currencies in a long term. ✅That also means that swap charges will be a lot and as a position trader he should put that into consideration before taking a long term position. 6. EA, Algorithmic Trader ✅These type of traders rely more or solely on computer algorithm programs to make buy and sell decisions for them. The EA also known as Expert Advisor may place trades on behalf of the trader and even closing trades when in profit. ✅Although the EA performs most of the work, a trader should also have basic knowledge of trading to be able to gain some measure of success from this type of trading. Why is it important to trade in your local currency? ✅It can save you from a lot of calculations. When you trade in a currency which is not your local currency, your mind processes so much information to convert every number to your local currency. Your mind will be tired at the end of the day and you will begin making unplanned trades. ✅I watched a video on this topic recently and this fellow mentioned the same thing that I always thought, when you trade in a currency which is not your own, you wouldn't respect money. For example, $50 US dollar would look smaller if you are a trader living and using South African Rand. You may want to wait for more to be satisfied as the number 50 may look smaller in the eyes. But if we convert USD50 to South African Rand it would be R725.38 today and for many that would be a 4 days wage. ✅Many traders, especially new ones in the Forex industry, they really do not know what they want and how to go about making things work out consistently for them, they only think if they keep buying and selling eventually they can hit a million dollar and get away from the financial distress and poverty. Probably that is how the Forex Market is perceived, that giant casino that makes people rich and such way of thinking can destroy one's life and everything he acquired for years. The most important thing here is to respect money, knowing that it is very hard to obtain. As we respect it in our homes, hiding it from our siblings or relatives, we should respect it on the MT5 or MT4. Money is like Gold in our days, if you really want to know how important money is, get a spade and go dig for Gold. I wish I could write more, but I feel like I have written more already and some people may find this boring to read. Please hit that like button if you learned something from here. Feel free to comment below what you have learned or the type of trader you are. Many Good wishes for you, Forexintelligence AKA the Sniper:)
FX:NAS100Education
by Forexintelligence_NA
10
Types of Trading IndicatorsTraders use different types of indicators to gauge the market conditions. Let's take a look at what are those types of indicators Trend Indicators measures the direction and strength of a trend. When price moves above the average it can be thought of as a bullish trend. When price moves below the average, it's a bearish trend. Momentum Indicators are helpful as they are used to identify price movements by comparing prices over time. Can also be used to analyze volume by comparing current closing prices with previous closing prices. Volatility Indicators are used to analyze the periods of high and low volatility. The big swings created by the volatility can provide good trading opportunities. Volume Indicators plays an important role in technical analysis in confirming trends and patterns which makes volume indicators popular amongst traders. There are hundreds of indicators that can be categorized within these four categories. Also, a volume indicator can be used as a trend indicator or a volatility gauging indicator. The same goes for momentum or trend indicators. Some traders use one indicator to gauge volume while another trader can use the same indicator for another purpose. What kind of Indicators do you use in trading the most and why? It all depends upon the type of trading we are doing off course. Would love to know your opinions in the comment box below. Follow us for more educational analysis, technical ideas, and script updates. Happy Trading!
Education
by Tuned_Official
36
The Reasons We Follow An Algorithmic-Systematic Approach To All We have been trading and investing in markets for decades since the early 1980s. Experienced and successful traders and market participants tend to remember their losses and mistakes instead of victories. Profits feed the ego; losses are teachers for those who realize that valuable lessons come from adversity instead of triumph. Everyone has an opinion- The only objective measure is the current price The trend is your only friend- News, experts, and all other information are subjective Trading and investing can be stressful A plan and discipline are the building blocks for success You have to be in to win- Drawdowns are a part of any trading or investing system A batting average of .300 is good enough to get a professional baseball player into the Hall of Fame in Cooperstown, New York. Each time a future hall of Famer steps up to the plate, a success rate of below 30% is good enough for infamy. Trading and investing are similar. No one is correct in their market calls all of the time. When approaching any market, there are always three potential outcomes, a profit, a loss, or a breakeven. The success rate of calling a market correctly takes a back seat to other factors. We have seen market participants who have had the foresight to call the market correctly 75% of the time and still wind up losing money. Conversely, a seasoned trader can be right 20% of the time and still make an overall profit. I usually write about specific markets on Trading View, but it is essential to look at the methodology, mindset, and path to growing capital over time this week. We follow an algorithmic-systematic approach to trading and investing. Our models come from decades of experience and the knowledge gained from mistakes that led to losses. We all have the same goal; to make money and grow our capital. The route to achieving the goal is what separates the winners from the losers. Everyone has an opinion- The only objective measure is the current price I am sure we have all heard an “expert” or pundit tell us that the current price of an asset is wrong. They may provide many compelling and convincing reasons, but they are 100% wrong when challenging a price level. An asset price at any moment in time is always the correct price for one objective reason. It is the level where buyers and sellers meet in a transparent environment, the market. The “experts” and pundits take a subjective leap of faith when using the terms expensive or cheap. Too many variables establish a price. The only accurate measure of value is the current price itself. The trend is your only friend- News, experts, and all other information are subjective Prices are snapshots. Trends are the living and breathing extension of price action. Many market participants become junkies, watching each news event, “expert” forecast, and other exogenous events that could push asset prices higher or lower. They make investment or trading decisions based on what they hear and see. The approach is flawed for three significant reasons: Trading off what one sees and hears is stale before it reaches our ears and eyes. Others have seen the news or forecast before us, and some had seen it before it appeared on a medium for all to see. The translation of an event, forecast, or news item is purely subjective as it assumes, we will make a correct analysis. The expression “buy the rumor and sell the news” or the converse runs counter to even the most complete analytical decision-making approach. Finally, reacting to any stimulus involves a primary human response, emotion. Emotions are a trader or investor’s worst enemy. They trigger responses and decisions based on fear and greed, a deadly duo that increases the chances of mistakes, miscalculations, and irrational behavior. A market’s trend is purely objective as it reflects the path of least resistance of a price based on market consensus and sentiment. Prices tend to move to levels on the upside and downside that can defy logic, run counter to reason and are not rational. Trend following blocks out logic, reason, and rational thought and favors one of the leading theories of physics. Newton’s first law states that a body at rest will remain at rest unless an outside force acts on it, and a body in motion at a constant velocity will remain in motion in a straight line unless acted upon by an external force. Trend following embodies Newton’s first law of physics. Asset prices reflect the market’s sentiment, which is the inertia that drives those prices. If Sir Isaac Newton were a modern-day trader or investor, his mantra would be the trend is your only friend as it is compatible with his first law. The physical sciences are objective. Trading and investing can be stressful We have found that decision-making creates stress. When we buy or sell an asset based on anything but the market’s trend, we make a subjective judgment. The attempt to buy at the bottom or sell at the top is a value judgment that runs counter to logic as it implies the sentiment and current prices are incorrect, a fatal flaw. Sometimes some market participants get lucky, but that only reinforces a strategy that leads to future mistakes. Picking tops or bottoms in a market is a strategy that rewards the ego as it gratifies that one called the market correctly. However, ego and vanity lead us down a dangerous path. In the 1997 film, The Devil’s Advocate, Al Pacino, the actor who played Satan, said, “Vanity-definitely my favorite sin.” Reducing stress comes from following the path of least resistance. We use an algorithmic, systematic approach to trading based on models that remain long during a bullish trend and short during a bearish one. We never miss a significant trend as we are constantly long or short the assets in our portfolio. We do not adjust our risk positions on an intra-day basis. We only reverse risk positions based on closing prices at the end of a session and execute the position at the start of the next session. Our proprietary models come from decades of trading and investing experience in a wide range of markets across all asset classes. We never look to sell tops or buy bottoms. We are long at the top and short at the bottom. However, we tend to capture significant trends, taking the filet mignon out of price trends. We have found that our mechanical approach, with a better than even-money win rate, reduces stress as it takes any decision-making out of the equation. The only job is to follow the rules, always remaining in the markets on the long or short side and reversing positions based on the model’s instructions. A plan and discipline are the building blocks for success Emotions lead to impulsive behavior. Acting on impulse leaves little or no time for planning and throws discipline out of the window. Albert Einstein said that the definition of insanity is doing the same thing repeatedly and expecting a different result. Impulsive decision-making is the root of Einstein’s insanity definition. Any risk position in any market must have a plan, which is simply balancing the financial risk versus the potential reward. Before pressing the buy or sell button, we must establish risk parameters for trades or investments when not following an algorithmic approach. The discipline is following the plan. Many market participants run into problems when a risk position goes against them, and they have no plan for risk and reward, or they modify it to allow them to stick with a wrong decision. Turning a short-term trade into a long-term investment is a common mistake. The mistake comes from a subjective call that the market price is incorrect. A way to prevent this is to remind yourself that the market price is always the correct price. We are often wrong; the market is never wrong. You have to be in to win- Drawdowns are a part of any trading or investing system We are constantly long or short the highly liquid assets in our investment portfolio because we never know when a significant trend will begin. Being in a risk position that follows trends is the only way to catch the bulk of a bullish or bearish trend. Drawdowns or losses are a part of life and any trading or investment approach. A choppy market near the high or low end of a trend will result in short-term losses. However, that is the price for capturing the long-term trend. There is no free lunch in life, and the same goes for trading and investing. The goal is always the same for every market participant, to make money over time and build wealth and our nest eggs. The strategy is what separates winners from losers. We take a long-term systematic approach and do not veer from the path. We know that drawdowns are a part of any investment or trading approach. We are in it to win it on a long-term basis. Join us for the Monday Night Call each week - all you have to do is use the link below. There's also a link to sign up for early access to these articles as well. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
CME_MINI:ES1!Education
by Andy_Hecht
47
Automating strategies keeps me sane 😊Running a strategy with a proven edge has me comfortable mentally on how a trade plays out, Be it a stop out or a take profit target met. Also automating those proven strategies and just letting them be helped with my mental state as a trader. Trade alerted 17:45 this afternoon and has been close once to TP. I didn't know this I was in the garden enjoying the late summer sun that has bestowed the UK this week 🌞 Once upon a time watching the charts would of had me thinking of closing to soon and then filling with regret as the retrace occurs that I didn't close. Only reason to look at chart tonight was a quick mid week review of trades and this trade is one of my open ones. Trade details are shown on the chart. We are working the 15M time frame on this strategy. We're looking for the green line which is take profit target. Little red arrow is entry point and purple line is stop loss. The current open trade still might not hip TP but I'm not allowing emotions to play a part I let the objective based plan play out. Previous trades shown on chart from the last two days. Trade history can be seen at the foot of this trade idea too for full transparency. These are year to date stats. How do you as traders journal your trades I'm intrigued to know? Having back test capability and a trade log which is possible through TradingView pine script saves me hours in manually logging trades as well as manually back testing. Having that level of data allows me to know I'm running a proven strategy and that I have an edge. The next key bit to staying sane/stress free and one of the best pieces of advice I could give as a trader is use technology available to your advantage. Trading shouldn't consume every spare minute. Most of us do this to escape the 9-5 so don't spend hours at charts unnecessarily. Not spending hours at charts is why I haven't shared all these trades on this pair and when this current one alerted. If your reading this tonight let this sink in I've only looked at this chart once this week when I shared my last idea yesterday on the pair in question. There has been three trades since then and I'm only just looking now! Take it from me find a strategy that works and then automate that strategy. Your mental health and well being will be the winner in the long run along with healthy account gains. ------------------------------------------ I try and share as many ideas as I can as and when I have time. My trades are automated so I am not sat in front of a screen daily. Jumping on random trade ideas 'willy-nilly' on Trading View trying to find that one trade that you can retire from is not a sustainable way to trade. You might get lucky, but it will always end one way. ------------------------------------------ Please hit the 👍 LIKE button if you like my ideas🙏 Also follow my profile, then you will receive a notification whenever I post a trading idea - so you don't miss them. 🙌 No one likes missing out, do they? Also, see my 'related ideas' below to see more just like this. The stats for this pair are shown below too. Thank you. Darren
Education
by pow_removetheguesswork
73
How to be a Successful Trader?Few things to keep in mind to be a successful trader. ✅Always remember to only trade what you can afford to lose. Know the risks involved in trading. ✅Use a proper risk management strategy to minimize losses in the event of a trend reversal, exchange outages, or any other untimely issues. ✅Only expose 2 to 3 percent of your portfolio value for each trade. ✅Never follow anyone's analysis blindly. Do your own research. ✅Keep your emotions out of trading. If you see a lot of losses, take a break for some time, analyze your mistakes and come back stronger. ✅Define your profit targets, don't get greedy, and keep improving your trading strategy. Let us know in the comment box below, of more things to keep in mind to be a successful trader. Don't forget to follow us for more educational content, trading ideas, and scripts. Happy Trading
Education
by Tuned_Official
2
Algorithmic Trading and it's Pros and ConsAlgorithmic Trading is the activity of bots to perform buy and sell actions on an exchange. These bots are scripts created by traders to eliminate manual trading. It's all rule-based trading. A trader codes the indicators, moving averages, and various other conditions for the buy's and sell's to happen. Stop losses and take profits are coded and so are dynamic buys and sell conditions which makes algorithmic trading even more versatile. Pros Speedy executions make it easy to capture quick price movements as soon as they occur. There is no risk of any human error during trading. Execution of large volumes of trade in a short period of time. Ability to backtest historical data to train the algorithm accordingly. Investment can be diversified using multiple trading scripts. Cons Technology Dependency which means if the algorithmic trading platform is not reliable, there could be a possible loss of capital in the event of disruptions. Need to know how to code or understand the concepts of trading, indicators, etc. Need of high-end resources to create, backtest and run trading scripts. How many of us make use of Algorithms to trade and what are your favourite trading strategies? Share in the comment box below For more Educational content follow us. Happy Trading
Education
by Tuned_Official
2
ETCUSDT looks healthy. Let's do pyramid profiting What is pyramid profiting ? When we add to our existing profitable positions, while managing risk properly, that's the way to pyramid profiting. Pyramid profiting is done when we see a healthy trend be it bullish or bearish. While bullish, we add to our existing longs, and vice versa for bearish. Basically, we are taking advantage of trends by adding to our position size with each wave of that trend. I see a chance to pyramid profit on ETCUSDT on 1H chart. If you see, ETC has shown good upward movement recently and achieved an ATH at $179, after which it declined a bit and seems to make another run upwards. Opportunities like these, are good for pyramid profiting, when there is a chance of a strong continued trend. Money Flow Index looks to move up, and if good volume emerges it could see another leg up breaking psychological level of $200 and beyond. Traders can open a long position, or buy with some percentage of their portfolios, and add to their positions when it reaches defined targets. SL can be used accordingly. Always do your own research. For more ideas like these follow us. Visit Tuned to create strategies with pyramid profiting. Happy Trading
Education
by Tuned_Official
1
Algo makes me happy. ALGOs are here to stay. They obviously cannot be taken for granted. One thing I tell friends that purchase an Algo in the form of a Tradingview Script, is that it will help their trading decisions and confirm technical Analysis made by them. On my quest of finding a good Algorithm, not only for signals and accuracy, but supporting instruments, I came to Elite Signals Algo . Again, the goal if an Algo is to support your own Technical Analysis. With almost 80% accuracy, this instruments can help your decision making and maintain emotions on the control level. One of the coolest features is the auto drawing of Support and Resistance level. They are VERY accurate and combined with Candlestick pattern recognition, your day trading becomes very powerful. Is the Algo making me a lazy Trader? No, not at all. Its a supporting tool, same as any indicator. Are you interested in this great tool? Follow the link and send me any question you have. Enjoy your day trading! Disclaimer This idea does not constitute as financial advice. It is for educational purposes only. You can use the information from this post to make your own trading plan for the instruments discussed or other instruments. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
CME_MINI:ESH2021Education
by Fondotoro
2
ICHIMOKU AND RVI BEGINNERS PLAY BOOKNow ichimoku is relatively simple look for buys above the cloud and look for sells under the cloud. so when we backtest that over our 5/5 winners with rvi we get two less entrys, however as a beginner to avoid them whipsaw movements that isnt always a bad thing. The cloud itself offers dynamic support and resistance based of averages. price breaking through the cloud signals a breakout and a change in the trend usually. if new to trading I recommend learning about ichimoku on youtube, its not the all time great plan but if you have no plan its better than that. to keep discipline and entry requirements.
TVC:USOILEducation
by UnknownUnicorn6102956
ICHIMOKU AND RVI BEGINNERS PLAY BOOKNow ichimoku is relatively simple look for buys above the cloud and look for sells under the cloud. so when we backtest that over our 5/5 winners with rvi we get two less entrys, however as a beginner to avoid them whipsaw movements that isnt always a bad thing. The cloud itself offers dynamic support and resistance based of averages. price breaking through the cloud signals a breakout and a change in the trend usually. if new to trading I recommend learning about ichimoku on youtube, its not the all time great plan but if you have no plan its better than that. to keep discipline and entry requirements.
TVC:USOILEducation
by UnknownUnicorn6102956
RVI TUTORIAL OIL EXAMPLE 5/5 WINNERSSo I am going to breakdown an indicator that I have featured alot in my trades, so if we look at the crude oil chart here, we can see that in total we have 5 notable crosses of the rvi indicator, 3 bearish trades and 2 bullish trades for a total of 510 pips, 5 winners out of 5. Now the magic of the indicator is that it is both an entry signal and an exit signal, enter on cross exit on cross to maintain maximum pips. Personally i find relative vigor index very useful when used in conjunction with good trading ideas and good structure analysis
TVC:USOILEducation
by UnknownUnicorn6102956
📖 Diversification in trading strategies. Part 1Often, traders are pursuing the system's maximum profitability, upon creating trading strategies. However, it is more important not to increase the value of the expected profit, but to reduce the possible risk, which is expressed in the maximum allowable drawdown. A simple, but relatively reliable way to assess the trading strategy effectiveness is to determine the profitability ratio to the system's drawdown maximum in the period under study, the so-called recovery factor. For example, if the system's profitability is 45% per annum, and the maximum drawdown is 15%, the recovery factor will be 3. If we compare two systems with different profit values and drawdowns, then the system with a higher recovery factor will be better. A system that allows to earn 30% per annum with a 5% drawdown will be better than a system with 100% per annum and a 40% drawdown. The profitability can be easily adjusted to the required value using margin lending, but the risk level in the system profitability cannot be changed, these are integral terms of the system. By increasing the yield, we increase the risk accordingly. However, it is possible to reduce the portfolio risk at all applying diversification, that is, trade not one separate strategy, but a whole set, dividing the capital between the systems. In this case, the drawdown of each individual system does not necessarily coincide with the drawdowns of all other systems in the portfolio, therefore, in general, we can expect a smaller total drawdown maximum, while the system's profitability is only averaged. If the systems are sufficiently independent of each other (different trading strategies are used, different instruments are traded), then the drop in equity in one of the systems will most likely be compensated by the increase in equity in some other system. The more independent trading strategies and trading instruments are, the more the overall risk is diluted. There are even situations when it makes sense to add a knowingly unprofitable strategy to the portfolio. Although the overall portfolio profitability will decrease slightly, it may turn out that the risk will decrease even more, and overall portfolio performance will improve. Theoretically, if you add more and more strategies and instruments to your portfolio, you can get as little risk as you want, and, accordingly, as much efficiency as you want. However, in practice, such an intention will inevitably face the problem of correlation between different strategies and tools. The main ways of possible diversification are as follows: Diversification by trading strategies Diversification by parameters of trading strategies Diversification by trading instruments Diversification across markets 🧐In this part we will take a closer look at the first option. 📌 Diversification by trading strategies At the heart of every trading strategy is some general market attribute or traded instrument that can be used to make a profit. For example, the ability of the market to form prices trends and continue moving after a breakout of a strong resistance level. If there are several systems based on fundamentally different considerations, then capital diversifying between these systems can lead to significant risk reduction. Indeed, in terms of the internal essence of the system, they can be as different from each other as you like, and as weakly correlated with each other. If, for example, trend-following systems and systems on level breakouts are somehow similar to each other and often give similar equity, then trend-following and counter-trend systems, on the contrary, will even show a negative correlation. Where the trend-following system will be sawn, the counter-trend system will show profit, respectively, the overall portfolio risk will significantly decrease. Diversification of this kind, in theory, has no limits in depth and depends only on the creative ability of the trader to create systems. Therefore, it is important to constantly continue to work on the search for new trading strategies, since it is in this direction that the most reliable way to increase the efficiency and profitability of trading lies.
BITSTAMP:BTCUSDEducation
by I.T.Analytics
23
Algo Trading. My Story. Part 3In the previous 2 parts, I shared with you my story about how I started my journey in Algo trading. If you did not read those posts, please do it as you will see the whole picture. You will find them in the related ideas. For those who did it, I want to thank you for your time, interest, and feedback. Probably you will ask me, why do I continue Algo trading, as it gave a lot of troubles and it is not so simple? I should say that in trading, there are no simple things when you make your 1st steps. But when you get knowledge and experience, trading becomes easy-peasy lemon squeezy! You know what to do and how to do it, you have your trading plan, and you follow it day by day. The same goes for Algo Trading. When I started Algo trading, I knew nothing, but moving step by step forward, and I got knowledge and experience. I understood better what should I do in order to reach my goals. So, if you think that you are not a programmer and you will never succeed in Algo trading, you are wrong! Everything depends only on you and how you will work. If you work hard, you will succeed. Algo Trading is worth spending time and effort. It can open new opportunities and change life for the better. Let's talk about the benefits of Algo trading with more details. I would like to divide the opportunities for 2 parts. Let's call them Private Algo trading and Public Algo trading. The 1st one is about Algo trading, which you use for yourself mainly. You create trading robots, create a portfolio based on different robots, and trade for yourself. The 2nd part is a business direction. Let's say you created good quality trading robots, and you become a signal provider. It is funny, but not all traders think about this direction, which can give additional income. Private Algo Trading If you are a novice trader, you don't have knowledge and experience. It means that if you start your own trading, you will blow up your deposit. It is just the question of time. You must understand, it is impossible to become a profitable trader if you know nothing about trading, and you don't have the important elements of profitable trading. In this case, Algo trading can become a good alternative. Trading robots will trade for you following trading strategies, which probably you don't know how to use properly. You can test trading robots and understand which trading results you will be able to get in the future. Based on this estimated value, you can plan your further work. If you are an advanced trader, but you are not a profitable trader because of using the wrong tools, poor disciple, and emotions, Algo trading also can become a good alternative for you. Trading robots are perfect traders if we talk about the discipline and following a trading plan. Trading robots don't have emotions, and they buy and sell when they must buy and sell. They manage active positions like they must be managed. Algo trading is really a good solution for those who are searching for workable tools that can make profit in the financial markets. If you are an advanced and profitable trader, Algo trading is also can give benefits for you as well. Diversification is a good way which helps to cut down trading risks. If you have profitable trading strategies, if you follow your trading plan, you also can use trading robots, which will give you an additional way of trading in different markets and timeframes. You can't cover all possible markets and trading styles, but trading robots can do it, and it is a mistake to skip such an opportunity. Public Algo Trading Let's say you made several robots, and they are profitable. You use them in your personal trading, and you like how they work and make profit for you. You can become a signal provider and get additional income as well as you can sell these robots and get the additional income too. Maybe it is not so obvious for you, but there are a lot of people who don't want to spend their time learning how to trade. They want to invest money and get additional income. For you, it is a good opportunity to provide the majority what they are looking for. It is win-win cooperation for both sides. I know there are not so many traders who can trade with solid capital. But what if you build a very simple business and get additional income from selling your tools and service? It will allow you to move faster to your financial independence. Not everyone thinks in such a way, and from my point of view, it is a mistake. If you can provide quality products and services, you will have success. There are a lot of scammers, poor quality products and services in this business, but you will be able to make this space better and really help traders to get income from the financial markets. You can do it, definitely! As you can see, there are enough benefits from Algo trading and everyone can pick the way which he or she likes. I have been trading in the financial markets since 2007. I have enough knowledge, experience, and tools for profitable manual trading. But for me, using trading robots for Forex market and Commodities, it is the opportunity to diversify trading risks and get an additional source of income. I invest in Crypto. I trade in Stock markets. I spend my time on manual trading in the markets where I really want to trade like a trader. But at the same time, I understand that Forex market also can give additional income. Forex is not so simple for manual trading if we compare it with Crypto and Stock markets. But at the same time, it has the perfect infrastructure for Algo trading. That's why I think it makes sense to spend time, money, and effort to develop trading robots and using them. Don't you think so?
FX:XAUUSDEducation
by DLavrov
21