After creating my first bot on Quadency (see post), it has now been running for 6 days. The bot is running on the ATOM/USDT market.
Well, I say it has been running for six days... what I mean is that it has been six days since I first set it running.
The first two days
It was all very new the first few days. I kept on checking to see how it was doing. It took a good few hours for the first trade to occur - a purchase of 0.446 ATOM at a price of 22.545 (about 10.055 YSDT).
I was then anxiously awaiting the second trade.
And I waited.
And waited.
And then I had a look at the bot parameters. I did not have enough funds to convert from ATOM into USDT. Doh! I hadn't realised that there was a minimum trade value in Binance. I needed to have c. 20 USDT in my account to start the bot running with a 15 USDT starting capital. And now it started to work properly. The bot executed three trades on the 7th April for me, and I had an 8% return overall.
The next two days
The price of ATOM dropped. And I had ATOM in my account. No trades were executed.
I delved into Binance to see what had happened. If it was market conditions, or another parameter that I hadn't set up correctly.
I could see that the price was hovering around the price I paid for the ATOM. But the bot hadn't sold anything as the 3% margin hadn't kicked in yet.
I bottled it. I stopped the bot and manually put in a trade order that would see a 1% return on my trade. I thought that the market was going to drop further and I would end up loosing the inital profit I had made.
After I traded back ATOM for USDT, I set the bot running again. The curiousity was still there. This time I said to myself "just let it carry on - this is an experiment, and a few pence here or there isnt going to make a difference".
The last two days
The price of ATOM dropped. And then rose again. And then dropped. And is now rising again. I have made a 8.93% return on a 15 USDT investment over the last two days. Five trades have been executed automatically for me. And most of these have occured overnight whilst I was slumbering peacefully in bed.
However I have noticed that every time the bot has purchased ATOM (after selling back into USDT), it has done so at a higher price. This does concern me as it implies that this strategy will only work in a bull market where the price increases gradually over time.
What would I change?
I would want the bot to assess a longer period after a trade is completed in order to see in which direction the market is really going. I'm not sure of the exact wording to use here, but basically I don't want it to keep on buying at higher and higher prices. After a trade perhaps it should set the lower band standard deviation multiplier lower for a period of time?
I would also like to have a "get out" position from a bot. For example, once a 10% return had been realised (whether this is over a day, week, month, or year) I would like the 10% return to be ringfenced and put into an account. The bot can then re-initialise based on the original starting capital. This locks in any gains (but it also grows slower as profits are not "re-invested").
My verdict
Bot's certainly do take the emotion out of trading for you.
They can run 24/7 and will execute trades based on your strategy.
But your strategy has to be correct.
And if you see any "real" market reason for deviation, bots can't take this into account.
If this is a medium to long term investment (rather than day trading) I think that you have to stick to your nerve in order to succeed. Otherwise you might as well just check the market daily and set up your own trades executed when the market conditions hit your limit factors.
Note : All of my articles are my own and relate to my own personal experience. My article may also have been published on other websites. Investing is always at your own risk.