I completed the code of Sideswipe and integrated into Hound.
Then adjusted the volume to use the higher prediction of the Weibull algorithm.
This allows the bot to trade with higher volumes on less trades per hour.
It has also allowed Hound to calculate the most probable trades based on an
extrapolated K-NN algorithm together with the Sentiment value resulting in
less stop loss exits.
From midnight to 7am today, the current running percentage is 62.14%
So I am quite happy with the results and consider my code to be mostly done and stable.
However, today I would like to discuss a conversation I had last night over several
shots of Saki with a good friend of mine from Japan (after which we went to the VIP
Karoke and strangled some cats - lolz)
Are bots good or bad to the markets?
Can you automate the trading process?
(And more importantly, Should you?)
Cryptocurrency trading is a source of income for a few people in the sphere.
Very few of these traders actually have the time to stare at the price charts
the whole day. This is where trading bots become really useful. They’re
basically tools that can do these redundant, but important activities like
price monitoring, stop loss, alerting etc.
This way, trading can be done even when you are sleeping, out drinking Saki or
singing your heart out at Karoke. Besides, it is no secret that bots are faster and
more effective than humans when it comes to functional things and working with numbers.
Bots can save you time but don’t be completely blind and expect the bot to
keep on making money for you. Bots aren’t a fire-and-forget technology. Keep your
eyes open and do some manual work like checking whether the bot is making right
decisions or not. A mixture of manual and automated decisions is really required
and bots require adjustment to suit specific market trends.
A few bots and tools available for crypto trading are:
- Butter Bot
- Crackin Kraken
However, learning to code your own using strategies from these bots, will generally
produce results that you will be more comfortable with.
Will your own bots be more profitable? Maybe or maybe not, but since it was your own
work that went into the bot, you will be less dissapointed with any mistakes or losses.
Plus you will have the ability to correct these errors, rather than becomming
frustrated over the bot making losses and causing you grief.
A gamer keyboard has the WASD keys all worn out, an artist will have the Z key all
worn out, while a keyboard on the ground in a million peices, belongs to a bot programmer.
So, why are bots good or bad?
Common arguments for why bots are bad include:
- Bots can restrict market growth by constant buy and sell
- Bots run by large volume traders can manipulate the price
- Manual trading can have benefits that surpass bots
- Bots can loose all your money without even caring
- Bots do not understand risk tollerance without constant attention
- Bots hurt manual traders by sniping trades faster
- Bots can be manipulated and taken advantage of
Common arguments for why bots are good include:
- Bots provide liquidity and a heartbeat to the market
- Bots help traders as a tool for capturing more trades
- Bots can help stabilise the market and reduce massive falls
- Bots can be programmed to execute any strategy you wish
- Bots provide YOU with more freedom by doing tasks for you
- Bots can perform hundreds of trades increasing market volume traded
- Bots can take advantage of market inefficiencies
In closing, Bots have good and bad ramifications to the market.
Once most bots pick a direction, they stick with it until the next textbook support
or resistance level. Humans are predictably unpredictable, thus can cause massive
shifts in trading without textbook strategies. The biggest issue with bots is
when humans become involved. If there is a sudden sell off by a human, all the bots
kick in and sell off as well using the textbook stop loss strategy. This in turn
can cause a massive market down turn. However, the same is true in the opposite
direction, as bots buy and sell the trend and is how they are manipulated by
the larger volume traders.
The smart traders monitor the charts, trade in a vacuum, and follow the bots.