Topic: Trading robots - wrong assumptions made by beginners. (Read 2906 times)

I am not an experienced trader at all... and never tried crypto but many years ago was making very small micro lot trades on forex. I did not dare to use bots at the time, just because I am afraid I would change my mind while away from computer. Of course, bots are automated assistants. Your strategy still brings the outcome.

You created the thread and said many good things, but you missed the most important...

Your experience with bots. People will give more credibility to your thread if you share your experience with bots.

How many bots do you use?

What is your favorite bot and why?

What was your worst profit with a bot?

What was your biggest profit with bot?

Can you show sources from where you got those bots?

From my personal experience, when I started trading, the first thing I did was an "Order Placement" utility! It saved me a lot of time and nerves (no typos, quick placement, no waiting for web-interface). Second thing I did was an utility that helped me to "Check order statuses". And that saved me a lot more time allowing me to stay away from the terminal, but react quickly (quicker than before). These are examples of automation. Not a "Money Making Button", but rather trading assistant (powerful trading terminal).

Thank you for your replies!

And that kind of assumptions is exactly what I'm trying to change with this topic!

Unfortunately, I don't have a good enough writing skills to explain some key-concepts.
People consider bot as some solid structure that automates everything.
In fact, there are many separate elements related to trading that may require automation:
* Price monitoring - when it has grown few percents higher than some fixed value, or above some moving average. Some application may send you a signal when this price change happens. Thus you don't have to sit in front of the monitor the whole day.
* Volume monitoring - when there is an explosion in trade volumes.
* Implementation of various indicators and signals - where all the necessary data is retrieved from various sources and analyzed
* Order placement - when you have multiple pairs with multiple orders for each (in some excel table for example) and you want to quickly place them without making any typos.
* Check order statuses - with no need to connect to the web interface, but instead to receive some notification (sound or SMS) upon execution of order.

These are examples of automation!
These elements might be very helpful to every trader, and any combination of those may result into creation of some trading robot.

A very nice illustration or comparison regarding on trading which is very true when we are tradibg using bots.For the first time when i was still a newbie without any proper knowledge i do really believe that these bots can make me money since its automated ans been ran by codes which i realized later on that i was wrong because i do lost lots of money entrusting the fund in my wallet.

when you use the word automation, many take it as in "click a button and start earning money" and some of the advertisements are causing this false way of thinking too. they promise an easy way of analyzing, "Artificial Intelligence" lol, and many other things and someone from outside who has never had any trading experience but is desperate for earning money this way will surely want to try them. and end up regretting it.

effective trading strategy is the task of the trader and not the robot. It’s like a car that allows driving faster and more comfortable, but it is up for the driver to decide how to get to the destination. And most important, it is the driver who is responsible for all actions.
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This one is the most I like in your statement, it should be remember most of the time by the traders in this industry, so that they may know it well how to make trade properly and to minimize their loss too while their in the actual doing trade in the platform. It is still much better to do trade manually than using a bot trading because in actual you can appreciate what you are doing in the exchange platform than anything else.

I think I know why fintech is a profitable business. Some people make trader bots because selling it is a risk free job. Using it even tough there is a small amount of risk is still risky. Also  back in the day and even today Wall Street and finance sector is biggest sector out there.

Now that sillicon valley and technology became the next big thing, combining them together and creating fintech, its a huge boom. That is why bots are so popular these days. I think the greatest traders are developers if you ask me. That way he won’t have to be experience with the bots, he will be the creator of the bot himself.

Totally agree! One may use a kitchen knife to cut bread, but cut away his fingers instead (not to mention more complicated tools).

Even if it's just a tool, you need to know how to use it, experienced trader should be experienced with bots too, not only with trading

For some reason, majority believes that robots do trade on their own (doing all analysis, making decisions)...

First of all it is an automation tool! Saying that one trades better by hands is similar to saying that one can hammer a nail better with bare hands (like Chuck Norris in "Way of the Dragon" I assume).

Of course yes because the trading robot is made by peoples and not all of people are suitable when use it,
personality I am more trust in my skills of trading than make betting on the program of trading
trading robot is part of strategy trading and I think all of traders has their strategy trading be made by them selves.

Looks like there are not so many traders with practical experiences in using robots...

Of course, let us know on your results and experiences! This thread welcomes all practical posts, whenever those experiences were positive or negative.

Hey!
I've been learning a lot about trading recently, bought some bitcoin and traded some tiny profits in Poloniex. However, for the next week or two I am going to try out a trading bot, which buys for X and sells for X+1%. I think that's the best kind of trading bot, since it allows big daily volume that's hard to achieve manually, since it can literally do a thousand trades per day. If you guys want, I can post my results here along with my thoughts on the bot (how easy it is to use, does it work?).

OK, now it's time to mention another BIG and terribly wrong assumption: many traders assume that the use of bots is illegal, that automated trading is cheating, that markets are against bots! Look at those quotes:









ABSOLUTELY WRONG!
Most markets love Bots, because Bots (some trading strategies) generate a lot of volumes and markets receive lots of profits in commissions!

Think of it, why would some market publish detailed descriptions to their APIs if they don't want anyone to use those?

Possibly there are some markets that are against automation (some reported YoBit, I've never traded on it, so I can't confirm it).
In my opinion, the main reason for market not wanting any automation software is because of various badly written student-made bots that may overflow markets with their requests (implementing some sort of Denial of Service Attacks). Honestly, I wouldn't respect much the market that is afraid of bots, for me it's a sign of their weak infrastructure. Simply speaking, their servers/internet connection/routers are not good enough to handle big amounts of request. Meaning that sometimes, when things are not going in a unusual way (sudden pump/dump), when thousands of users come to trade, these markets might easily become overflooded with request, will become slow or may even "fall down", resulting in big losses for traders who needed to react quickly.

Thus my approach is rather simple - if market is not allowing me to trade with my bot, I conclude it is because their technology is not strong enough, and for that reason I wouldn't take a risk to trade with them! There are many great markets where bots are very welcome  
  
However, it is important to mention that every market has some limits on the allowed number of requests to be made per minute. And if your bot exceeds these limits it becomes a problem to a market, for that your account might be suspended.

My clue is, if market has an API section on their site, most likely they are not against automation. In order to play safe, better read about possible limits (number of requests allowed per minute, second, hour). If you can't find this information, I recommend making sure by contacting support and requesting them about possible limits, that will help you to avoid potential problems.

We - traders make profits by buying cheaper and by selling with a little premium (minus commission). A trader may set the selling price two times higher than what he bought for and wait a long time for price to grow till the desired level. How long it may take? Days, months, years..., there is no guarantee that such an order will ever be executed. However, if the trader is less greedy and is willing to sell for the price 10% higher than he originally bought for, chances are much higher. And if the price difference is about 1%, most likely the order will be executed the same day! Of course, if deposit is small the earning will be tiny. But if the process is totally automated (buying for X and selling for X+1%) a number of deals can be made every day (smaller percent, higher frequency of deals). The only problem is in automation of that strategy.

Kevin77, I personally use a trading robot which is a private development of my team and I'm not authorized to share it. Sorry. If we give it to other traders the strategy will no longer work for us as effectively. There are many different robots on crypto-markets and its already difficult to compete with them in scalping-like trading. Hope you understand, it's just business.
 
If you wish to find some trading-robot, you may begin searching that forum. I will not advertise any names, but from what I've seen, there some not-bad technologies that might help in automation of routine operations. I found few robots here that can be used to implement some simple strategies and may bring some profits (of course if you know what you are doing).

You got any better bot for scalping in bitcoin markets ? I heard there are a lot of scalping bots are available for forex market but not sure about bitcoin trading. If you have any, can share them here.

Scalping will be profitable, at the same time we need to follow one basic thumb rule of trading : more trades, more the losses.

Yet, we can capitalize each and every fluctuation of the bitcoin price movements by using scalping strategy. But I'm not sure about profitability of using any bots for it. If traders are capable of doing it manually, then this strategy will be definite profitable.

The scalping strategy gives more predictable and clear results. Keeping in mind small difference between selling and purchasing prices the trader can execute several orders every day, thus creating significant profit. The main disadvantage of this strategy is that the trader is required to monitor execution of orders.

And trading robots can be used to solve this problem. Unlike all the traders, the bots can monitor the prices 24 hour per day and 7 days per week. Every trader needs to have a rest, because constant monitoring causes tiredness, which can result in a mistake and significant losses, while the robot is following a selected strategy and simply can’t make a mistake. Furthermore, the robot is monitoring the exchange rates with the rate of up to several times per minute and will perform required action faster than any trader.

What you said is right, I use bots for forex trading formerly, when i just know how to set up the bots it's can be a bad movement for me, because I don't know how the bots works, how the algo, looping, ect.
I know a teacher who made bots itself and sharing it public, he's also explain how the algorithm bots works, but in some situation this bots need to improve to adapting with the trend, this is like what you said, the experience and credibility from the trader itself which can improve the bot. The point is the bots only for simplify the work, take all action to the bots is big mistakes.