Beating The Market by Trading Bots

Strategies that works but some algo traders are against these methods.

• Buy them cheap - when the market is going down and on sale just buy the stocks you think is on sale and that you believe will go up in the future.
• DCA - dollar cost averaging, continue averaging as the asset goes down.
• Grid Trading - most effective when market is ranging instead of trending.

Minimize the risk and maximize the gains.

You can minimize the risk and maximize the profit by risking 1 to 5% of your equity per trade.

This way: everytime you lose the allocation grows smaller and everytime you win the allocation grows bigger. Also this gives us the chance to compound our wins.

The easiest strategy to create by far since you just need to determine whether the asset is uptrend/downtrend.

Also almost any assets either trends or ranges.

The simplest trend following strategy is to:

• buy/long when price is above the 200 EMA line and
• sell/short when price is below the 200 EMA line.

You can also use other indicators or analyze other assets that tells whether the current asset you are trading is trending up or down.

Most often these strategies uses RSI or indicators that tells if there is a long or short momentum.

If the buyers are coming in then there is a momentum upwards. Meaning you expect the price to continue upwards.

It the momentum is on the bear side then you expect the price to continue downwards.

Most of the time I use Trend Following Strategies together with Momentum Strategies for a higher probability of winning. It's easier to always trade with the trend.

List of idea that could improve profitability:

• Use machine learning to predict price. Simplest is to use price closes and the percent change from current to last x bars as model input.
• Check the correlation of an asset with its main index. Find assets that follows the movement of main index.
• Listen to news that can affect the asset/s you trade.
• Use mathematical formula or statistics to find alphas on the asset or market.
• Create a websocket that listens and gets order books for every buy or sell in an asset, record it and then later you can process it using machine learning.

• Create a websocket that saves transaction, price plus volume and order book of an asset. Best for machine learning.
• Save first all the elements in database like: open, high, low, close, time, volume then use it as input for machine learning.
• Use process of elimination. Find indicators that work and then combine them with each other.