How about algorithm trading?

Much has been written about robots trading. It is the perfect thing… install a robot to do the analysis and trade. It takes away all the sitting in front of the screen and analyzing the charts/news/stock SEC filings and all that you need to do to have a chance at trading profits.

I have been very intrigued by having someone else trade for me. Someone better than me. (wouldn’t take much). If you have a big stash with at least 6 digits, you can get a financial manager. But for us.. well there are a couple of options.

The most common robotic trading for “retail” traders are  what is called Expert Advisors (EAs). In a nutshell (much more to come on this as this is the way I trade), these are scripts you install on charts on a trading platform using MetaTrader 4. Once installed they do the chart analysis using indicators and when it detects a possible trade it will execute the trade. And close it when the algorithm thinks it should be closed. Do they work! Yes and no. Some work some of the time – but aren’t programmed for big market changes.

The other option is to join a platform where you follow other traders. Such as Duplitrade and Zulutrade. I have tried both and actually made some profits. The drawback is that you pay fees so the traders can be compensated. Still – done right, you can expect profits from these two platforms.

Being a software developer, I am working on my own robots. Where I have full control over the algorithms. I will have a whole section on this, but my approach is that of statistical probability. I design a robot, test it extensively and pick the top of the heap to trade live. Trick is to feed the funnel so that more and more probable profitable trades float to the top. Does this work. YES. Again, you build up a portfolio, not look for the golden goose. MORE LATER.