VIP Bot Workshop: November 27th

Meeting summary for The Trading Parrot’s Zoom Meeting (11/27/2023)

Quick recap

The team discussed the potential of using a bot for augmenting discretionary trading, particularly for short-term trades. They explored the possibility of setting a price range for the bot to continue trading and the feasibility of a system that launches trades based on specific entry price points. The speaker also discussed their strategy of running paper trading to observe the performance of different cryptocurrencies and expressed interest in the resilience of their strategy when faced with a pullback.

Summary

Trading Bot Price Range and Indicator Discussion
They discussed the possibility of setting a price range for the bot to continue trading and the feasibility of a system that launches trades based on specific entry price points. They also explored the idea of using indicators to set alerts, trigger automated deals, and back-test data. The confirmed the possibility of such a system and mentioned a tool called “Wick Hunter”. Towards the end of the meeting, they agreed to have a follow-up conversation to go over the details further. They also briefly mentioned some experiments The was planning to share, but no specific details were provided.

Cryptocurrency Paper Trading Strategy Discussed

The speaker discussed their strategy of running paper trading to observe the performance of different cryptocurrencies. They expressed interest in the resilience of their strategy when faced with a pullback. The speaker explained the selection criteria of the strategy, which includes filtering by relative volume, daily volume, and market cap. They also mentioned the use of RSI for entry and exit points. The speaker further discussed the deployment of their strategy once a reversal or pullback occurs. They also mentioned the use of a copy trading platform called Signal for portfolio management. The speaker also encouraged the audience to use their resources and workshops for learning more about the strategies.

Pair Trading Strategies and AI in Finance

The meeting focused on pair trading strategies, with Olivier showing interest in learning more about the process. The speaker explained the process and potential for automation in the future, mentioning the use of tools such as the coin decipher. The discussion also revolved around the use of AI and machine learning in trading, with the speaker highlighting the effectiveness of certain indicators like Ttp bands and Percentage, nearest rank (PNR) in predicting price movements. A significant point of discussion was a merger between Teddy and PNR, which was recently completed and functioning well. The speaker encouraged attendees to connect with David for further information.

AI Trading and Optimization: Challenges and Potential

The discussion revolved around the use of AI in trading and optimization. The speaker mentioned that while he has experimented with AI, he didn’t find it to be significantly useful, especially when it comes to machine learning and Python. He also noted the risk of overfitting in optimization, which can lead to inaccurate results outside of the specific period of time. The speaker also shared his negative experiences with Chat Gpt, finding the code it produces to be of poor quality. Alex, another participant, shared his interest in better understanding trading view and indicators, and expressed optimism about the potential of AI. The speaker concluded by expressing his belief that AI will eventually become too powerful in trading, but also highlighted the challenges and risks associated with its use.

Trailing Profit Integration and Backtesting

Ricardo brought up a question about the trailing profit and sought advice on how to modify strategies to include it. He also wanted to know how to backtest the effects of using trailing in trading. The participants explained that trailing profits can be integrated into trading view, but its impact on backtesting results might not be accurate due to price fluctuations within a 2-hour candle. They also clarified that trailing profits can be activated either at the close of a candle or based on intra-candle price movements, and the former is more suitable for backtesting.

Platforms, Backtesting, and Trading Strategies

The advantages and disadvantages of various platforms, such as Trading View, Python, and ADB, were discussed. Trading View was noted for having a strong community and cloud-based features but limited data. Python was praised for its flexibility but mentioned to have many buggy libraries. ADB was highlighted as a superior alternative to Gavin’s Backtester, with improved features and the ability to trade live. The team also discussed the importance of backtesting and paper trading before deploying strategies with real money. A live stream event was scheduled to provide further guidance on backtesting using ADB.

Trading Strategy Backtesting Challenges

The talk focused on the difficulties associated with leverage in trading strategies. David and Donny underscored the significance of comprehensive backtesting, suggesting that conventional methods may be too simplified and not reflect real-world outcomes accurately. They proposed the concept of compounding in backtesting and suggested the necessity for a platform that can accurately replicate trading conditions. However, the conversation concluded without a definitive conclusion on these points.

Next steps

• Marcus will book a call with The to go over the details of setting up a trading bot.
• Consider implementing compounding and risk management features in Adb or Absolute No after promoting live trading to the main branch.