Topic: (Closed) Butter Bot!: Premier Bitstamp, and BTC-E EMA Trading Platform (Closed) - page 71. (Read 274813 times)

I like the theory, really I do.

In practice, however, I always seem to lose when I try it.  You are fighting heavy pressure and fast order action, and by the time I am out & back in, I have lost more then I care too.
Not so small in my experience.  Too much trade traffic and market pressure.  I always lost way more then I cared to, and inevitably, the math showed that I would have been better off going for coffee until the "panic" buying/selling was over, come calmly back in and catch the rebound (providing a trend change is identified).  If on the other hand the spike was not indicative of a trend change, I avoided the trap.

I Found the same with the STB.  I now disable the stoploss in the bot, because it hurts my returns more often then not.

But again, all of that plays into a very methodical approach to trading, and plenty of money has been made with different methods.

I will tell you, however, that how I arrive at my strategy and settings is by spending hundreds of hours with charts testing ideas and theories.  One of the things that is hard to table-test is a stop-loss.  You may have it set for %5, but more often then not it will sell far below that because you are at that point "chasing the trade"; this amplifies with larger amounts of money.

I am also going to come back to a trend that you might be overlooking.  In this volatile market, manipulating fast-acting bots with bull & bear traps is common practice.  One of the things that makes Butter better is it's relative immunity to these market games.

FWIW

Indeed, but don't forget that after the stop-loss is triggered, the bot just continues trading.
So if your EMA Diff is positive it'll just take back the position (and take a small point difference loss + transaction fees)

Sounds great... but what ends up happening when I tried this is that too often a sharp correction such as we had a few hours ago would trigger the stop-loss in a scenario, like today, that ultimately did not trigger a dead cross.

BTC is still climbing, but I would be out.  Not a win.  

EDIT:

You are absolutely right regarding the trending nature of the market.  Once that changes, so will the trading strategy.  I think we have a bit of trending ahead of us tho, and intend to capitalize on it.

I assumed you weren't very experienced, my mistake. Let's have a healthy discussion then:

You know that MA Crossovers (any kind) work great in a trending market, and I think we can both agree bitcoin has currently known only one trend and that's one big bull rally. So that this bot was profitable should be no surprise to both of us.

That however doesn't mean you can adopt a better strategy.

Let's go back to the trailing stop-loss proposal:
You state that it's possible that the trailing stop loss kicks me out on a sharp correction. And that is a fair argument, but I'd argue that it isn't such a bad thing. Back to my original example:

Price goes on a steep climp from 20 dollars to 250 dollars and then severely corrects to 80 dollars in a couple of minutes.
In this example a trailing stop loss of 20% would have closed my positions at 200 dollar. After that as soon as there is a positive cross-over again the bot can go ahead and buy back in.

The point I'm trying to make is that a 20% correction is pretty significant and probably will have an impact for a while. Your bot can buy back in at 80 dollars and make a significant profit.

Without the trailing stop-loss you wouldn't be able to make such a profit.

Ofcourse buy and hold would also be a winning strategy in this example, but then I ask you, why use a bot in the first place?

In reply to your other reply:
A twitchy stop-loss bot will get manipulated to no end (I agree) but a 20% drop is significant and even if there is a rebound, the first couple of minutes / hours will have intense selling pressure.

Also keep in mind that I'm not proposing a regular stop-loss but a trailing one, so incase of the current trend, and I get manipulated out of my position, I'd still be taking home a healthy profit.

Nope.   Do this:

Go back to every single "tumble" you can find.  The most recent good one is the "silk road crash".

See the hard downward pressure?  Sell here, you sell too low.  "knee jerk" sell reactions and auto stop-loses get you caught in that trap.

Now, move forward in time 1 - 2 hours.  See the rebound?  That much market pressure _always_ results in a correction, or rebound... even when the market then continues down.  _Sell there_.  You will be far ahead, every time.

Discipline makes good traders, and twitchy bots with stop-loss triggers are a favorite target of market manipulators.

That's exactly my sentiment, San1ty.

@seanrarey:
What if there's a DDOS attack on mtGox and the market tumbles down to 100$ in 10min time?
Will you just wait x weeks / months for the market to recover, or would you rather buy >2x the amount of bitcoins back, because you were able to sell your bitcoins at 220$?

More likely, your trailing stop-loss would jump you out of the market on a sharp correction that is contrary to the actual trend.

Sir, you don't have to explain your position to me, after 30 years as a professional trader, I understand what you are thinking.  I just don't agree with it.  Long-term I have enjoyed less success with trying to catch every spike and bounce.  In fact, it has led to frustration and loss.

That does not mean that others have not, or cannot have better success.

I will tell you that after tallying the month of October, Butter returned a 48.7% profit on the funds it was controlling.  That far exceeds any other bot I am testing, and beat my manual trades even.

This bot ain't broke! 

San1ty,
  We will probably be including alternative strategy modules with V3; MACD will likely be a strategy then. We will thoroughly back test all strategies to make sure they are likely to be profitable before we release them, but in principle, I don't see a problem with this; we are all for freedom of choice .

Pablo.

Your stop loss remark is incorrect, a trailing stop-loss can be used perfectly in conjunction with ema-crossovers.

Example:
Price goes on a steep climp from 20 dollars to 260 dollars and then severely corrects to 80 dollars in a couple of minutes.
Your EMA crossovers would react when the action has already happend (sell at 80)

while a trailing stop-loss of 20% would try and cut your losses instanteniously. After that your bot can enter the market again based on it's own indicators.

I have a feeling you don't fully understand those concepts if you just try them out and conclude they aren't profitable.
MACD reacts faster to market movements then the MA crossovers butter-bot uses.

As far as the haasonline bot goes, it's pretty nice and has a lot more options, but the trading systems he currently has implemented for example macd is not according to the spec, so it's hard to judge.

A good experiment for you would be to buy Stephen Haas' Simple Trade Bot.  It is versatile, and will let you do most if not all of what you are suggesting.  I have run it side-by-side with Butter for months.  It has never come close to matching Butter's performance.

RSI, "reverse" EMA, MACD all seem like a great idea; until the market runs away from it and strands the bot.

With the different bots I run (if it is available, I buy it), it is the simplest one that constantly makes me the most money.

There are some features I want very much and am looking forward to, but I would be quite happy if they left the trade engine exactly as it is.  I keep coming back to it from the more complex machines.

fible1:

I don't know if you read these comments but imho they are pretty relevant.
Did you have a look at MACD yet? Any questions about it?

- EMA Crossovers are basically a pretty weak trading system. If you like MA's a lot you should consider switching to MACD as it is superior. (http://en.wikipedia.org/wiki/MACD)
- I notice you have to set the trading fee manually (this should be an api call to the exchange every X minutes to check what the trading fee is). Bitstamp has a trading fee based on your volume.

Hey ,   
  No, they don't. Let's watch your bot and if the situation repeats itself please send me your logs then . I suspect this is a non-repeat situation.

Pablo.

Problem, I already reset my PC last night this morning. Do the console logs survive across resets?

Hey ,
  I am dropping you a PM right now so we can get your console logs and debug that situation .

Pablo.

I think you are referring to the notion of market corrections.

Any trend that is too one sided is bound to retrace. (applies in both bull and bear markets)



(snapshot from last night)

For example, the MtGox Exchange is overbought across the long term ranges. It seems to be primed for a massive correction pretty soon.

==========================

While I am on the topic of retracements. Last night I used B-Bot in a new configuration and I noticed that it kept trying to buy repeatedly after it already bought using all available funds (whatever was made available to it). It appears that it repeatedly sends emails even though it has already used all available funds.

The same was true of selling. It kept sending messages that the sell trigger was reached despite already having sold everything available to it.

=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

I am using reverse EMA strategy so I am unsure if it applies.

" If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back."

I'd also like to point out that some of the same arguments are being used in reverse on either side of the issue.

If a flash crash happens says side A, then EMA will keep get you out of it. There is no guarantee the market will go up again we are told.  People pointed out that there is no guarantee that the price will recover. Alright, that is probably true.

Now the same point is being used (the snap back "will happen") as-if it were guaranteed....

Perhaps we need to all get on the same page.

===========================

Either way, I understand both positions to the best of my ability.

=======[Discount Code for Butter (10% off)]=========

https://butter-bot.com/?r=f5a17f5b

Use my referal code cause' im sooo cute!  



You'll get an extra month free, it's all on me!

Pablo & company, I salute you in your efforts. 

Some pretty counter-intuitive suggesting being brought back up here.  I am going to make my comments brief, because this is all very worn territory.

Profit/loss:
"Magic" does not exist in trading.  Only solid, proven systems.  _No_ system is without loss.

Stop-loss:
EMA cross-over trading _is_ stop loss.  It is designed to keep you in a bull market and out of a bear market.  Attempting to "add" a stop-loss to this system creates a double-negative and short-circuits the system.  You will lose.  If you try to bail on your position as the crash occurs, you are selling against the pressure and you will lose much more then if you wait for the snap-back.

"Flash-crash" protection:
When trading manually, the best protection in a flash-crash is to walk away & go eat dinner.  If you join the panic buy/sell, you lose.  You are _always_ far ahead when you wait and catch the rebound caused by the heavy market pressure.  I have had great success programming the bot to do this automatically.  It often means slowing the trade down; you need to wait for the snap-back.

This bot is wildly profitable, and very configurable.  Most everything you are asking for is already here; you just need to understand how the bot works and how to set it up.

Heh, I knew someone would provide a post .

Well it is true, we are working on it, but there is nothing resolute yet. We are back testing several improvements to EMA and we still have to see if they pan out so the new engine is not a foregone conclusion, the new engine must be more profitable than the current one for us to upgrade it.

I hope that answers your question .

Pablo.

This is when you mentioned it.