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At the moment the system gives me an edge over other traders. If I sold it, I'd be giving this advantage to other traders and, subsequently, losing my lead. Although I do not exclude a future buyout, I am presently focusing on improving the product and trying to scale it. One of the things that I plan on doing soon is increasing the capital and therefore putting the bot through more trading volume.
There are tons of improvements I have in mind, especially on adjusting the position-holding time span, as well as solutions to make it more lightweight, facilitating larger volumes. I wasted way too much time trying to apply high frequency trading in Bitcoin. At first the idea sounded great, but I was soon facing a lot of technical issues trying to scale the amount of requests.
However, I am not yet convinced that it's impossible to achieve true HFT with cryptocurrencies, so it might be something I come back to in the future.
After drifting away from the idea of HFT due to the technical limitations, I looked into a more analytical approach in automated trading. Most of those concepts couldn't be applied in the Bitcoin market, as it's highly unpredictable, making it hard to shape the models around it. That's when I decided to stick to the stock market. Another big mistake in the beginning was relying too heavily on models. Instead of trying different approaches in analyzing the data I had, I relied solely on the models for identifying profitable patterns without investing time into other more direct solutions.
Models are only simple real world abstractions, and my common sense has saved me more than once. Now this is not by any means a reliable metric, and there are many factors that affect it. The bot has not been tested enough to guarantee that this isn't just a fluke it might as well be. Large investment management companies would do anything to achieve those statistics, and I'm sure I won't keep up that amount of success in upcoming trades.
The success so far was also greatly impacted by the favorable market conditions, chosen stocks, and the fact that the bot was running intermittently. I learned this the painful way. Not too long ago the market went pretty crazy, and I'd be lying if I said that I wasn't expecting some major crashes of the stocks I was trading.
Although my stop-loss saved me from some brutal losses, had I not stepped in at the right time, the bot would've ruined all the profit from the past months. That event really got me thinking, and I decided to stop it running for a few days until I fixed that loophole. This was also a great learning experience for me, and I believe that without going through those ups and downs, I would've never managed to get the algorithm to where it is today.
I have no regrets losing time on Bitcoin, as it gave me a deeper understanding of how cryptocurrency trading works, which might prove useful some day. Probably my biggest single advantage is being a starry-eyed young dreamer. To some extent, this allows me to believe enough to put effort into ideas in that others wouldn't.
That's what motivated me to persevere in finding those "backdoors" in the market. While many people believe individual traders don't stand much of a chance against the well-equipped companies, I am here to prove that with the right implementation there still is plenty of space in the market. Another immensely helpful resource were the public research papers available online. In fact, I got tremendous help from papers published back in I often found that most of them are easily overlooked, although they contain super useful analyses.
Being a workaholic has also contributed a fair amount to this success. I have no issue whatsoever working hours per day. With time, I developed a very productive and consistent lifestyle, managing to get rid of most distractions. This allowed me time to invest in polishing and researching the different strategies for this project. You could build decentralized apps on top of Ethereum and even new currencies. I wondered if I could take advantage of those swings by buying when the price was low, selling when it was high, and buying back in when the price dipped again.
In the same period I shut down my company, Bitfountain , after running it for 5 years. Bootstrapping my own company gave me an unprecedented amount of freedom. I lived in 4 countries, traveled to many more, and only worked a few hours per day. However, since the company had run its course, I needed a new source of income.
I applied for only one job as a software engineer. It was the kind of job people love - high salary, all the Silicon Valley benefits, friendly team, well funded company, challenging engineering problems. After three rounds of interview they decided not to move forward with me.
I did want it. But I also feared losing my freedom. Gone would be the days where I could spontaneously book a flight to India with no return date. Going through the interview process made the possibility of losing my freedom real. I went into panic mode searching for a way I could make money on my own. At this point I still owned Ethereum and the price was still swinging back and forth. I signed up for two exchanges: I needed Poloniex as well because there were many cryptocurrencies being traded there Altcoins - cryptocurrerncies that are not BTC.
Those are the first two exchanges that I used. Now I use others since each exchange has pros and cons. A live crypto exchange is intimidating at first glance. There are charts and numbers changing at the speed of sight. I felt overwhelmed but sat through the confusion to try and make sense of what I was looking at. Soon I could see where to place orders to buy and sell, and the charts started to make sense too.
As the month went on I spent hours trading. I made enough to pay my rent, so the possibility of making a living from this was validated. I wanted to formalize my trading knowledge so I could do more than buy low and sell high. There had to be a real strategy to this stuff.
I read as many books as I could on trading stocks and foreign exchange markets. I made a lot of mistakes. But eventually I found my rhythm and strategies. For myself, and most crypto traders, the goal is to increase the amount of Bitcoin we own. For example, right now the price of 1 ETH Ethereum is 0.
Another thing I need to make clear is the type of trading I do - day trading. All of my profits are converted back into BTC at the end of each trading day. Again, even though I buy and sell several Altcoins, at the end of the day my net worth is in Bitcoin. There are three reasons for this:. I earn more USD when the price of Bitcoin goes up against the dollar.
Why was it important to clear this up? Several things were on my mind the first time I had to do this.
What if I sell my BTC now and the price shoots up tomorrow? Yes, but your bills will be paid. Sell now so you can pay your rent. You can always hold out for more, but at the same time you are risking a loss. After a few months I got better at trading. Whilst it is certainly true that you can earn a significant amount of capital in a small space of time this is dependent upon two things:.
Investing a significant amount of capital. Understanding the market sufficiently to be confident investing this quantity of funds in one trade. In reality the best approach to making a steady return on your investment is to trade small amounts throughout the day. Monitoring the markets is an essential part of this.
To help with this the binary options trading bot was established.