Topic: Trading robots - wrong assumptions made by beginners. - page 2. (Read 2906 times)

I need to agree with this point as we could not completely ignore trading bots with the some wrong assumptions at the same time depending on trading bots completely sometimes may lead to disasters.

But having both trading bot and manual trading might give better results.

Kinda noob and off-topic question here, I've been trading for quite sometime now for both forex and bitcoins, I was always curious on how to use trading bots but never had the chance to understand it though so my question is how can I use one for example at poloniex/bitmex?

In my experience, trading bots which are suggesting the price levels to enter and exit are good instead of doing actual trading for ourselves. Yes, we need to pick the best suggestions made by bots based on our other researches and analysis.

The mix of manual trading and bot trading might give us some excellent results.

Fair assumptions about trading robots:
1.   Trading robots are able to monitor prices, buy and sell assets in an interruptible manner. Unlike live traders, trading robots do not require breaks/pauses, because they can’t get tired. Any trader will become tired during continuous work, while a robot can work as long as required. Programs don’t have physical needs, they don’t sleep.

2.   Trading robots are stable and fast. If the trader needs some time to take a decision and enter the data to place an order (the quantity of assets and the selling\purchasing prices), the robot will do that in a split-second.

3.   Trading robots are emotionless. The trader may have doubts or be scared to lose money, thus making affected decisions and totally forgetting about the current trading strategy or money management practices. Constant stress can also be the reason of many trading mistakes. The robot has no emotions, it simply follows the algorithm, strictly observing all the rules.

4.   Robots can’t make a typo (incorrect entry of correct data). The trader can be tired or annoyed and enter a wrong amount or just make a mistake (especially in case with numbers, e.g. 0.0000021 and 0.00000021). The robot can’t make such mistake, because it’s against the basic algorithm.

5.   Robots are versatile. One can use a robot on many exchanges at the very same time. It’s pretty tiring for a trader, especially in case when several orders have to be executed one by one. Furthermore, several robots can follow different strategies and work simultaneously.

trading robot is makes our work more simple and easy to do, we only need to manage the robot to work properly as we want but its need to online in 24 hours and i think its not a good idea to use our pc to stay alive in 24 hours unless we have to use VPS. but the point is we can not see and can not learn much in trading while the process is automatically. for beginners, i don't think its a good idea because beginners can not learn much and they can not understand for manual trading.

Yes, now I see some adequate comments

Pursuer, Absolutely! I just don't get this twisted "laziness" of beginners who don't dedicate any time to learn the strategy behind the bot. It doesn't take much time! Why would someone risk his hard earned money and give them to some BlackBox? Waste weeks of real work to save a couple of hours on learning bots strategy... Seriously, I don't get this.

JeffBrad12, It's true, the car may get broken for various technical reasons! But some of those reasons can be explained by improper "technical servicing" maintenance performed by the driver (like running bots on unstable or insecure systems).
From my experience, technology failures happened only few times, but I can't claim the bot for it (I had an internet cut off, system restart due to an automatic update, taken out power supply...) At some point I said "enough of that crap" and moved the bot to the cloud! 


CryptoBurger, I hope that this thread will become a good start within some time. But, do you have some particular trading strategy in your mind? Do you have an algorithm that you follow while trading that helps you generating some profits? In other words, do you already have something you wish to automate? Good start if so.
However, if you don't have your own set of steps, and only want to have fun with tinkering with various strategies implemented by various bots, most likely you will lose your deposit.


I believe that trader should only use those bots, whose strategy he can replicate manually (with his hands). The trader should be capable to do all the calculations (performed by bot) with a pencil and a paper. OK, we are technical people, we may let the trader to use an excel

first learn the basics of trading.
then learn how to make successful trades that are profitable and spend a while with manual trading.
then learn about different strategies and fully understand how they work.
then try using them manually at least a couple of times.
then think about using a bot.
that is when you realize there is nothing called "learning more about using bots"

great post. i've always liked the idea of automating trading. only seems like a natural progression.

i wanted to ask you where i could start learning more about using bots? would be fun to start tinkering with strategies.

The car can be broken in the middle, and you will never be forgetting about that. And it has made by the person, and there is a lot of cracks.
Totally all of your sentences was making sense for me.
Before I just use it for a short term, but looks like it difficult for adapting.

very good topic, and it was much needed in this board. I also see a lot of new topics asking about bitcoin bots and maybe the starter of that topic knows but not all the readers know about these things.

I always tell those who are talking about trading bots that they need to first learn things the hard way, and do everything by hand to understand all the strategies and then move on to using a bot. that way you can have a clear understanding of what that bot is doing for you not just click a button and expect magical things happen for you.

Good point! Is is exactly what I'm trying to state. It is a trader who makes a robot profitable! It's not a pencil that writes a poem.

Trading is an art and bot is a tool like a pen.
If you have a talent you can make a masterpiece. If you don't, no tool will help you making anything remarkable.

Trading forex or altcoin is a business and until a beginner see it so he will never understand the underlying factor relating to trading. Most of the trader that succeed in forex trading using robots have succeed using their skills , experience and knowledge in trading and transfer it to robots. The robot though intelligent cannot use or gathered fundamental issue and make an informed decision for successfully trading.

I decided to start that thread when I read the one called "Do you use a bot for trading?" (https://bitcointalksearch.org/topic/do-you-use-a-bot-for-trading-1638032)
I realized that many traders don't understand the whole concept of trading robots. Some people simply don't believe in trading-bots and keep away from (not a bad idea actually), some are striving to find a moneymaking program that guarantees the steady income (very wrong start), and there are also traders who successfully use some bots to automate routine operations (I'm one of them).

Wrong assumptions to be aware of:
1.   There are no perfect robots, moneymakers that can guarantee the steady income with no respect to current market conditions. It just can’t be like that. Robots can make forecasts and perform superficial analysis with several criteria; however none of them can predict price changes (on the developed markets). The prices are constantly changing and there’s no such algorithm that is able to take all the factors into account and create a precise pattern of behavior. Thus, all the offers of smart robots with complex AI that can predict prices with more then 60% accuracy are nothing but a marketing trick. There are robots with optimized strategies, which were tested and well-proven on the past data; however, there’s no guarantee that such bots will be successful in the nearest future.

2.   The whole concept of artificial intelligence is terribly misunderstood. Beginners consider trading robots as incredibly complex software solutions, which are capable to perform thorough fundamental analysis of the market conditions and correctly predict the price more often than a group of live traders. Wrong. Some robots can work in accordance with incredibly complex strategies, analyse huge amounts of data, may imitate the learning process; however, there is no guarantee that forecasting will be profitable. There’s no sense in making an artificial intelligence that will copy behavior of a real trader. Simply because live traders are not perfect in what they are doing. There’s an amazing book of Nassim Nicholas Taleb about luck, uncertainty and probability. It’s called “Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets”.

3.   Some traders believe that trading bots are too complex, trading strategies are difficult to understand, plus they require constant control from the trader. It’s not really like that in the majority of situations. Trading robots help to automate routine operations, such as price monitoring or order placement. If trader follows some working strategy, the latter can be automated and reduce the number of routine operations and possible human-factor mistakes. However, if trader has no strategy, it is strongly advised not to use any bots! The sure way to lose a deposit is to trade with a bot that uses some complicated or secret strategy that trader doesn’t understand. Even if developers guarantee steady profits and demonstrate significant results.


Conclusion:
Trading robots can make the life of a trader much easier, allowing automating many routine operations, increasing the speed of work, reducing error rates and fatigue. However, development of an 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.


Please, share your stories related to the use of bots. Whenever they are successful or the opposite it will be interesting to read those.
Please, don't write in this thread if you don't have any experience in using trading-robots. Only comments from past or current users.
I really wish to make this thread of practical posts and free from pure theorists. Thank you for understanding.