Are We Truly Aware of the Potential of Algorithmic Trading?

Discussion in 'Automated Trading' started by daanipd, Jul 28, 2023.

  1. daanipd

    daanipd

    In the fast-paced world of financial markets, traders are continually seeking innovative ways to gain a competitive edge. One approach that has gained significant momentum in recent years is algorithmic trading. The use of computer algorithms to execute trades has revolutionized the trading landscape, providing unparalleled opportunities for market participants. However, as algorithmic trading becomes increasingly prevalent, it begs the question: Are we truly aware of the full potential that algorithmic trading brings to the table?

    The Rise of Algorithmic Trading:
    Algorithmic trading, also known as algo trading, has emerged as a game-changer in the trading world. It involves using pre-programmed algorithms to automatically execute trades based on a predefined set of rules and market conditions. This approach enables traders to capitalize on fleeting market opportunities with unmatched speed and precision, far beyond what human traders can achieve.

    Unraveling the Potential:
    The true power of algorithmic trading lies in its ability to process vast amounts of data in real-time. Unlike human traders, algorithms can analyze market patterns, historical data, and news events simultaneously, making lightning-fast decisions. This agility allows for the exploitation of minute price discrepancies, often too elusive for manual trading strategies.

    Risk Management and Emotional Discipline:
    Emotions can often cloud judgment, leading to impulsive decisions and increased risk exposure. Algorithmic trading eliminates these emotional barriers, executing trades based solely on data and logic. As a result, the potential for human error is significantly reduced, paving the way for consistent and disciplined risk management.

    I will leaving here a screenshot showing the potential of my own portfolio, it’s just the beginning!!
     
    ETJ likes this.
  2. SunTrader

    SunTrader

    You don't mention which market/instruments you trade but NQ is up well above 30% so far this year. Similar for other U.S. major market indices.

    For Algos, just like many discretionary traders, it helps to have "wind against your back" when it comes to having outsized returns. But what happens when the wind changes direction?
     
    piezoe likes this.
  3. daanipd

    daanipd

    We trade sp500, nasdaq, gold, copper, crude oil, bonds and Bitcoin.

    The system has been connected late since May, we have beaten the market. The NASDAQ has been up 50% since January, while we are up 30% in 2 months.
     
  4. Overnight

    Overnight

    If you think the NASDAQ is up 50% YTD, then we question how you calculate your percentage gain for the year.

    Strike #1
     
    SunTrader and rb7 like this.
  5. daanipd

    daanipd

    30% in 2 months
     
  6. Big AAPL

    Big AAPL

    Hi Mr Just Got Here Last Week
    How about telling us what the time horizon is for this magical algo?
    Because there are a lot of us here who only trade daily and could care less what the long term outlook is
     
  7. Overnight

    Overnight

    It doesn't matter what you say your percentage gain is in 2 months. You think the NAZ is up 50% since January, which is WRONG.

    Therefore we must conclude, based on the preponderance of evidence, which is your calculation of gain over time, that your 30% in 2 months is also WRONG.
     
    SunTrader likes this.
  8. themickey

    themickey

    $XNDX_Barchart_Interactive_Chart_07_29_2023.png
     
  9. Overnight

    Overnight

  10. themickey

    themickey

    What's 10% between friends? :)
     
    #10     Jul 28, 2023
    comagnum and schizo like this.