EngineeringRobo Deluxe User GuideNovember 25, 2020
Algorithmic Trading in Crypto with EngineeringRobo
IS ALGOTRADING THE FUTURE OF CRYPTO TRADING?
Algorithmic trading, or algo trading, has been around for decades and it has been one of the most effective trading strategies for traditional markets like stocks and forex. In the next decade, many studies predict that artificial intelligence and algorithmic trading will grow from under $6 billion in 2022 to over $64 billion by 2030. There are over 150 algorithmic trading robots available all over the world, and more are being developed every year.
Nowadays, algorithmic trading has also become very popular among crypto traders because of its effectiveness and flexibility in terms of risk management as well as scalability. Algorithmic trading can be useful in the fast-paced and volatile world of cryptocurrency trading for a number of reasons. For one, it can help traders execute trades more quickly and efficiently than they could manually search for potential trades on charting platforms. This can be particularly useful in a market like crypto, where prices can fluctuate rapidly and opportunistic trading opportunities can arise and disappear in a matter of hours.
Additionally, algorithmic trading can also help traders manage their risks more effectively. By using algorithms to automatically monitor and manage their positions, traders can set specific rules and parameters for their trades, such as stop-loss orders that automatically close a trade if it reaches a certain level of loss. This can help traders limit their losses and avoid making rash, emotional decisions in the heat of the moment.
Furthermore, algorithmic trading can be more objective and less prone to human error than manual trading. Because algorithms are designed to execute trades based on predetermined rules and criteria, they can avoid the biases and emotional responses that can sometimes affect human traders. This can help traders make more rational and informed decisions, potentially leading to more successful trades.
Overall, algo trading can help traders in the crypto market execute trades more efficiently, implement more sophisticated trading strategies, and manage their risks more effectively.
WHY DO YOU NEED ENGINEERINGROBO?
In a 2003 article published in the Financial Analysts Journal titled “The Profitability of Day Traders”, professors at the University of Texas found that out of 334 brokerage accounts day trading the U.S. markets between February 1998 and October 1999, only 35% were profitable and only 14% generated profits in excess of than $10,000.
In a research paper published in 2014 titled “Do Day Traders Rationally Learn About Their Ability?”, professors from the University of California studied 3.7 billion trades from the Taiwan Stock Exchange between 1992-2006 and found that only 9.81% of day trading volume was generated by predictably profitable traders and that these predictably profitable traders constitute less than 3% of all day traders on an average day.
The range of results in these two studies exemplifies the challenge of determining a definitive success rate for day traders. At a minimum, these studies indicate at least 90% of aspiring day traders will not be profitable. However, thousands of traders still enter the market every day, making the same mistakes repeatedly (due to a lack of emotional discipline)
Therefore, there are only two ways to win in this game of trading:
1. Either spend over 10,000+ hours looking at the crypto charts and build the emotional training required for consistent profitability (they call it "screen time" on Wall Street) .
2. Or use a trading algorithm that will filter out the bad trades for you, and show you exactly at what price to buy and at what price to sell for max profit.
And that is our goal with EngineeringRobo. Using advanced mathematical models, we remove the emotional element from trading, allowing you to trade like a robot.
In our opinion, the key to developing an algorithmic trading system that actually works is to account for multiple market conditions. By taking a market direction agnostic position, EngineeringRobo has been attempting to outperform in both bull and bear market conditions with 550+ active EngineeringRobo traders worldwide (and counting) since 2019.