Struck Gold on the First Trade
I started trading before the coronavirus hit. That was when I came across an advertisement on Facebook about a new investing platform based in New Zealand. Intrigued, I registered and deposited some money.
Having read a book about Elon Musk by Ashle Vance, I had some knowledge about him. Based on that, I made the decision to buy Tesla stock, which was priced around $250 at the time. I thought, why not give it a try and hold onto it for a while? After a few months, I discovered that the stock had risen to around $400. I quickly cashed out, making an 80% profit on that trade.
Since then, trading hasn't been consistently profitable, although it remains a legitimate way to make money. It's exciting when you make a profit, but it can also leave you feeling grumpy for the rest of the day if you lose a trade.
That's a brief background on how I got started, as I didn't mention it in my previous blogs. You can read the previous blog posts about this robot.
- https://izzudinanuar.com/posts/us-stock-market-trading-automation-9
- https://izzudinanuar.com/posts/us-trading-automation-after-a-month-10
How Things Are Going with the Robot
There have been three major changes to the robot since last year.
Phase 1: Reversal Strategy on a 1-Minute Chart
Initially, the bot performed very well, making a 5% return on the first day. However, it lost 40% of its value after a month. The bot was executing numerous trades each day across 20 different stocks simultaneously. Due to its quick trading nature, the bot would panic when prices dropped, resulting in losses.
Phase 2: Reversal Strategy with Bracket Orders on a 1-Minute Chart
In this phase, I implemented bracket orders, where take profit and stop loss levels are set. I recall that it performed reasonably well, making at least a 10% return over a few months. However, I became preoccupied with preparing for my marriage and other matters, and I forgot about it. Later, I realized that the bot had become inactive and needed a restart. Nevertheless, I'm not satisfied with the results. The main reason is that if one were to trade with the same amount of money, it would be entirely wiped out due to broker fees.
Phase 3: ATR with a 1-Day Chart
During this phase, I began to understand that high-frequency trading doesn't necessarily equate to profitability. I changed the candle length to one day and let the bot run for a few months.
To my surprise, it generated profits. I believe the reason behind this is that, based on my experience, using a daily chart allows for movements between 1% and 5% on profitable days. This extended timeframe gives the robot more room to hold positions.
Conclusion
Using the robot for real trading could be quite risky. However, in terms of the ATR strategy, it can serve as a valuable indicator for daily chart trading. I've been using it in real trading and it seems to be making some money. We'll see how it performs over the next few years.
To answer the question, the robot started with $500,000 paper money and now sitting at $630,000.
