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Building Winning Algorithmic Trading Systems: Complete Guide

Algorithmic trading has become a new fad in stock, forex, and cryptocurrency trading markets. Though many traders want to become algorithmic traders, they struggle to properly code their own trading robots. When they search online, they find offtheshelf software or popular algorithmic coding information that are disorganized and misleading. In fact, some also make false promises of overnight prosperity.

To cut the clutter and give you an idea of building winning algorithmic trading systems, let me guide you through the AlgoTrading101, an online algorithmic trading course created by Lucas Liew. Since its launch in 2014, this course was enrolled by more than 30,000 students and it also got great reviews from them.

The focus of the program is to present the fundamentals of algorithmic trading in a structured manner. The best thing about this course is that it underscores the point that quantitative trading is not a get-rich-quick scheme. AlgoTrading101 outlines the basics of building winning algorithmic trading systems, designing, and maintaining own algo trading bot. You should always try to build an algo that brings together a trading system with practical guidance so that you can also successfully use system trading to make profit like hedge funds.  

In this article, I’ll guide you with the secrets for developing trading, the ways of setting entry and exit, simulation to live training, evolving statistical tendencies, develop an algorithmic approach for higher returns in the world, explanation and demonstration, and more in building algorithmic trading systems.

What is a Trading Bot?

A trading bot is an algorithmic trading robot, which is nothing but a computer code or software. It can generate and execute trades (buy and sell stocks, cryptos, and forex) in the financial market on the basis of some signals and preconditions (such as Golden Crossover or Death Cross).

There are some main components of a trading bot. They are signals involving buy or sell and exit rules (entry and exit points or systems and rules). They indicate when to open a position or close your current position. In fact, position sizing rules are also applied to define the buy or sell quantities.

What are the Requirements of an Algorithmic Trading Bot?

You would need the following:

  • A computer
  • An internet connection
  • A suitable operating system for running MetaTrader 4 (MT4), an electronic trading platform that uses the MetaQuotes Language 4 (MQL4) to code trading strategies

MetaTrader 4 (MT4) software has many benefits for building algo trading bots including:

  • The main asset class traded on MT4 is foreign exchange (FX). However, you can use the platform for trading equities, commodities, equity indices, and Bitcoin CFDs (contracts for difference).
  • It is easy to learn.
  • It is absolutely free.
  • It comes with many available FX data sources.

Building Winning Algorithmic Trading Strategies

You should check some core traits while developing an algorithmic strategy. The strategy must be:

  • Market prudent
  • Fundamentally sound (from both economic and market standpoint)
  • Developed on a mathematical model that is based on sound statistical methods
  • Based on different approaches to trade and patterns change

Once you have determined the initial step, it is time for you to decide on the strategy itself. If you are going for an automated strategy, your trading bot must be able to capture market inefficiencies that are identifiable and persistent.

A rigid set of rules are followed by algorithmic trading strategies for taking advantage of market behavior. The strategy must be cable of capturing multiple market inefficiencies for optimized trade and profit.

Here are some trading strategy types (along with their combination) for your algorithmic trading robot design:

  • Macroeconomic news (such as non-farm payroll or changes in interest rates)
  • Statistical analysis (such as correlation, co-integration, and data for statistical tendencies)
  • Technical analysis (such as moving averages, crossovers, and other strategies involving the science of technical analysis)
  • The market microstructure (such as trade infrastructure or arbitrage)

Data mine to get more applicable results. You may use the Monte Carlo simulator for risk analysis and predicting the probability of different outcomes. While building winning algorithmic trading systems, you should create them as per your personal characteristic features. Some of these personal factors to include in your software for creating winning trader bots for professional traders are:

  • Risk profile
  • Time commitment
  • Trading capital

Once these factors are considered, you should identify market inefficiencies that keep repeating. Once done, you should start coding a trading bot that suits your personal characteristic features. Once the coding is done, automate and test the system and also optimize them for the best possible result. Don’t forget exit point testing. When backtesting is successful, you should go for live trading like a successful trader. Now you know the traders journey from data mining to Monte Carlo simulation to live trading. You may also check other trading books for more ideas.

Buy Bitcoin, Cryptocurrencies, Stocks, and Gold for a Better Return (ROI)

If you are ready to invest in stocks and cryptos or buy Bitcoins through online brokerage accounts of centralized or decentralized cryptocurrency exchanges, you can do so in a legit way by investing through stock investing and cryptocurrency apps. You have to open an account with such an exchange or online broker (including trading apps and investment apps such as TD Ameritrade). Then verify your details (including basic personal information) and fund your stock or cryptocurrency and bitcoins trading account.

The best thing about the Bitcoin and crypto market is that the transactions are done without the involvement of banking entities. This is one of the reasons why more and more investors (including corporates, venture capitals, and institutional investors) are heavily investing in cryptos.

You can start depositing funds to your stock or crypto exchange account to buy company shares or cryptocurrencies. This can be done by simply connecting your online banking account (savings accounts, checking accounts, or other account types). Besides transferring fiat currency money online through bank transfer, you can make payments with other payment methods including credit cards, debit cards, and others.

If you need further assistance, you may consider taking help from the vibrant and helpful trading communities. You can trade cryptos with credit cards (business credit cards, personal ones, or Citi custom cash cards), debit cards, or other payment options through reliable crypto trading web platforms.

You can also check the savings calculator to know how much you should save on a weekly, monthly, or yearly basis. Check the financial news to know more about the prospects of various assets so that you can build long-term wealth.

In case you are bullish on the future prospects of gold, stock and ETF trading, crypto market, Bitcoin BTC, Ethereum ETH, Bitcoin Cash BCH, Litecoin LTC, Ethereum Classic ETC, Bitcoin SV, Wrap Bitcoin, and other altcoins, you can start investing in stocks, gold, Bitcoin, and other altcoins with USD. Once bought, transfer them to:

  • hot wallets (including mobile app wallets and software crypto wallets) or
  • cold wallets (including most secure hardware wallets)

Hold them for a longer time period to let the Bitcoin BTC price increase. Keep your cryptocurrencies safe with:

  • Ledger Nano S
  • Trezor One
  • Other Ledger and Trezor models

Crypto market investing will provide you with a higher return in the long run. The ROI from crypto investment is much more than investing in:

  • Stocks
  • Mutual funds
  • Index funds
  • Real estates
  • Yield savings accounts
  • Real estate investment trusts
  • Fiat currency trading (forex trading)
  • CD rates
  • Trade Options
  • Money saving in savings accounts
  • money market returns
  • Exchange traded funds
  • IRA accounts (including Bitcoin IRA), and others.

In fact, many retirement funds or IRA accounts such as Roth IRAs are allowing digital currency investors to purchase XRP, Bitcoin, Chainlink, and other digital assets. These retirement funds are increasing investor choice by allowing them to invest a small percentage of their money in cryptocurrencies. This is, in turn, increasing the prospects of these funds to provide their investors to get higher returns. If you are thinking about building wealth, you should include cryptos in your portfolio like other crypto investors.

Therefore, it can be concluded that holding Bitcoin Ethereum and other cryptos can help you to build real wealth and multiply your net worth. You can learn investing basics to buy crypto currency and other digital assets to make more gains. Start going through Wall Street Journal and other investing magazines on cryptos to learn more about investing in crypto market and make better financial decisions. Learn about valuation calculation to true bitcoin value and assess the overpriced or underpriced situations instantly.

As a beginners guide, you may also check out the trading basics provided by various cryptocurrency exchanges such as Coinbase, Binance, Kraken, and other crypto APIs. There are many brokers suitable for beginners as well. So, read reviews of customers before joining a crypto exchange. There are many brokers for beginners in the USA through which you can trade and invest extra cash and investible fund in fractional shares and stocks funds.

You should definitely learn about:

  • Trading for beginners (Step By Step guide)
  • Types of stocks including penny stocks, value stocks, growth stocks, blue-chip stocks, etc.
  • Gold standard
  • Futures contract
  • Gold miner, gold mining company, and gold mining stocks
  • Bad debt and bad credit
  • Home equity
  • Employment tax records and receipts
  • Periods of limitations
  • How credit score is determined?
  • World gold council
  • How is the price of gold and other precious metals determined?
  • How to rent out your car to make money
  • Significance of owning gold
  • Stock plans
  • Fixed income assets
  • Stocks and Funds
  • Spot price and futures price of gold
  • Write an eBook to start making money
  • Use spare time and personal internet connection to earn extra cash through part-time graphic design
  • Asset allocation
  • Investment gold
  • Different ways of buying and selling golds
  • How to make money from Google adsense?
  • Gold stocks
  • Utilizing market news for profit
  • Significance of Dow Jones in the stock market
  • How to increase your disposable income through balance transfers credit cards?
  • Different trade ideas
  • Warren Buffet’s investing styles
  • Passive investors
  • Different investment goals
  • Teaching as a private tutor in your free time
  • Cash Management
  • Investing for beginners
  • How to choose brokerage firms and stock exchanges?
  • Gold markets
  • Trading strategies for beginners to time your entry and exit
  • Using price actions to one’s advantages
  • Teach english to earn lot of money online and start saving
  • Browsing websites can also help you earn little extra cash
  • Margin Requirement
  • Margin Call
  • Margin Account
  • Day Trading Margin
  • Trend Trading
  • Market Maker
  • Options trades
  • Fundamental Analysis
  • Short Sell
  • Market Research
  • Success Rates Of Day Trades
  • Trading Vs Investing
  • Swing Trading
  • Time Frames Of Trading
  • Successful Ways Of Buying Stocks And Cryptos Throughout The Day
  • Risk Management
  • Financial Industry Regulatory Authority
  • Trade On Margin,
  • Foreign Exchange Trade
  • Pattern Day Traders
  • Day trading rules
  • Active trading
  • Secrets of a successful day trader
  • Stock price actions
  • How to pay off debt quickly
  • Planning for retirement
  • IRA guide and fruitful ways of increasing returns of individual retirement accounts
  • Stock price determinants
  • Charles Schwab’s modern approach to investing and retirement
  • Day Trading Tools, trading software, and different financial tools.

Defi tokens and NFTs (Non Fungible Tokens) are the next generations of crypto coins. These decentralized coins have started to become very popular among active traders who trade cryptocurrency. You can buy sell them through crypto trading platforms too.

Whether you buy Ethereum ETH or buy Dogecoin, you should also invest in:

  • Chainlink LINK
  • Litecoin LTC
  • Binance Coin
  • Cardano ADA
  • Polkadot DOT
  • Dogecoin DOGE, and
  • Trade Litecoin LTC for better diversification of coins

To diversify your portfolio, you may also buy stocks through stock brokers for beginners and pro.

Get better guidance on improving your personal finance, retirement planning, management of cash flows or capital gains, and investment ideas from financial advisors, investment managers, and wealth managers, especially the ones who are not averse to cryptocurrencies such as Bitcoin and others.

While day trading, you should always try to invest only that much money which you can afford to lose. When you do margin trading, be very careful. Financial protection must be there in your mind always while you make cryptocurrency trades. That’s why having a secure financial plan is so important.

Invest money in stocks, gold, and other cryptocurrencies through centralized or decentralized exchanges and reliable online brokers.

Choose NapBots to Increase ROI

Trading Robots (such as NapBots.com) automatically scans the market in real-time and trades for you. They run 24/7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.

Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.

NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.

The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.

You may also check “Napbots Review - Simple Way To Increase Your Crypto Returns” before taking the plunge.

What’s so special about NapBots?

NapBots crypto trading software is special because it comes with:

  1. A unique trading algorithm that processes market data for you
  2. A unique crypto trading bot library so that you can create your own mix of trading strategies
  3. Autopilot mode that enables you to automate trading 24x7
  4. An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money

How to Get Started with NapBots?

NapBots is easy to start with. It involves just 3 steps:

Step #1: Connect to one of the available trust exchanges.

Step #2: Select from the unique list of performing Bots of NapBots

Step #3: Choose a plan that suits your investment style

Once you have completed these three steps, NapBots is ready to trade cryptos and earn money for you. Happy Trading!

Why Choose NapBots?

  • NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.
  • The setup and installation process are easy. So, the non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.
  • The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.