Ep. 55 - How To Build Your First Trading Algorithm
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In this episode:
UK election review - how did we trade it? Hear what we learned from the previous spate of elections to trade this one for profit
Ivo Luhse of Evestin Forex explains how to build your first trading algorithm
Learn how to select a system, hire a developer for your trading algorithm and ensure you can adapt with changing markets
Trader Interview - Ivo Luhse of Evestin Forex - How To Build Your First Trading Algorithm
Ivo is a trader who tried manual testing and grew weary. Once he realised that he could automate his systems by building a trading algorithm that did the hard work for him, his profits started to soar.
Ivo opens up in this episode about his journey to that point and what he has learned building multiple, proven, and profitable trading algorithms over the last few years. He starts by telling us ‘keep it simple stupid’!
According to Ivo, simple trading systems work best for trading algorithms. The more variables you have in a system, the more discretion comes into it, and the more likely you are to struggle to build a successful trading algorithm. If you want your algorithm to work consistently you have to be able to clearly define your trading rules - which is easier the simpler they are.
Ivo gives us his ideas on how to get hold of your first system and then how to hire and manage a coder to build it for you. Ivo is a fan of building trading algorithms in MLQ5, the automated trading algorithm language and tells us where to find a developer to code in this language. He also shows us the pitfalls and gives us some tips to getting a good outcome.
Proven Track Record
Ivo has made his own trading algorithms available to the public on evestinforex.com and has been happy to share his proven track record of profitability with us. You can see the recent track record of three of his clients who trade using his algos below:
If you are interested in building your first trading algorithm then this episode is a must-listen!
Discretion vs Automation
Owen reveals his secret plan to become a technical trading ninja and then automate a system before reverting to his true love: sentiment/technicals/price trading. In his mind if he can use the learning from Traders Support Club and apply it to a trading algorithm then he can continue to see if he can make pips by manually trading his old style.
Perhaps this is the path of foolishness, but at least it will be fun to observe for the neutral. Glorious victory or crushing humiliation - both will make entertaining listening!
The serious point is one of discretion versus automation. The trading systems that we have learned from TSC have come with strict trading rules. But many of them do have levels of discretion. The question is whether, after removing the human discretion, these can still be traded effectively through a trading algorithm.
Only time will tell.