How to Auto Trade with Octoracle
Kick-off to our ‘The Basics’ setup series!
Preparations
First you shall study, observe and study more.
Make yourself acquainted with the four pillars of Automated Trading:
- System Trading Education (Daniel Jeffries an incredibly beneficial source on this matter and the best place to start digging deeper into the topic)
- Money Management
- Trader Psychology
- Technical Analysis (TA)
Second you shall test, then analyse, test and analyse again.
Learn to get comfortable with the interface and how to apply your strategy idea.
Play around with the configuration parameters in the backtesting module and the simulation (paper) trading until you are satisfied with its performance.
Read on and find out how to start testing!
Trials & Tribulations
Foreword
In case you just launched your crypto trading endeavour, be prepared to have your faith and nerves tested many times. Almost always failing at it, however at the same time learning from your mistakes and not repeating them. Be aware of- and honest to your Self, reflect on your good, more important also your bad, decisions. All this won’t be possible if you don’t have coherent data to analyse, so please do yourself a favour and keep track of your trades and the context they were happening in. Even though crypto assets are running on decentralised ledger technology, the exchanges trading them are not and in most cases they remove your trade data after a couple of weeks or months.
Below is the the best available intro read on crypto-asset trading, that I came across so far, thanks again Daniel Jeffries for providing invaluable content for free 🙏
Let’s test!
Our goal is to survive this seemingly everlasting ‘Crypto Winter’ prosperous.
First we look at the current general state of the market for our asset of choice, in this example bitcoin in Q1 2019:
✅ Low volume
✅ Long lasting bear market
✅ Strong sideway movements
Next step is to find a somewhat similar fractal structure from the backtesting data set (yes volatility was much higher back then…) to the current market outlook (see pictures below for the data set we used).
After you found your fractals, put your ideas to the test in the backtest module.
Start with writing down, in clear words, what your strategy should do:
- How should the buy line behave? [shrink & growth factor]
- What’s the trailing stop distance and growth? [offset, growth factor]
- When should the stop loss activate? [offset]
- Where should the sell line be placed, how will it move with price? [shrink & grow factor]
- Translate your words into the Octoracle strategy interface and thoroughly test it!
Once your configuration performs well, copy it over to the simulation module (paper trading) and let it run for a couple of hours or days.
Keep a close eye on the configurations activity and fine tune or adjust if necessary.
If it’s your first time setting up a strategy in Octoracle, which is very likely for we launched the beta only recently, then you might want to check out the tutorial video below.
