I spent the better part of a decade working within the financial industry. What I learned is very simple.
The stock market is a harsh and desolate landscape. Skilled traders employed by major banks prey on greedy, uneducated investors like lions to the kill.
These are the types of investors who buy high and sell low; reacting to mainstream media interviews like Jamie Dimon calling Bitcoin investors “stupid”. You got afraid and sold. He waited for the price to dip and bought.
Unbeknownst to most, these financial institutions have been evolving what is known as algorithmic trading: equations that allow traders to execute automated, and pre-programmed orders that adjust with price variables, time, and trade volumes.
They have been in play and affecting the financial markets since the 1970’s – now accounting for at least 60% of all stock market trading.
“The insiders are able to move faster than you. They are able to see your order and play it against other orders in ways you don’t understand.”
– Michael Lewis, author of “Flash Boys: A Wall Street Revolt”
Banks have had decades to build up an advantage within the stock market as algorithms combined with deep learning have evolved with time and data.
This is why the DOW continues to climb despite so many experts predicting its downfall. It’s held together by algorithms and it will crash when central banking allows it and when they are ready for it.
Cryptocurrency data is still raw – being the child of a fledgling technology known as blockchain that has only just begun to change this world.
This is still anyone’s game.
Anyone Can Now Utilize Algorithmic Trading
- Haasbot is a service that provides a wide range of bots capable of trading between 500 altcoins. You as an investor can develop your own script bot, to which the sky is the limit in its capabilities – or choose between a wide variety of backtested clones.
- Gimmer is an Ethereum based platform that will be launching their ICO Jan. 3, 2018 with already 100 investors signed up for their presale whitelist. Having dug through their website, whitepaper, and demo (only site that has one), I’d have to say their project looks to be one of the better options. A well designed website and business model – very simple and easy to understand – no experience or training whatsoever required on your part.
- Cryptotrader is a platform built to allow experienced bot developers to make profit by renting out their trading strategies to investors that lack programming experience.
- The GDAX exchange, owned and operated by the firm Coinbase has just announced integration with the popular algorithmic trading platform Quantconnect. Adding the Kraken Exchange is in the very near future.
“We’ve partnered with GDAX (Coinbase) to support their cryptocurrency exchange. Using your GDAX account, your algorithms can now trade BTC, LTC and ETH currency pairs.”
This year alone, Quantconnect has seen a 300% increase in activity and new live algorithms have increased by 30% as algorithmic trading has been gaining popularity.
Algorithmic Trading is Much Easier Than it Sounds
You do not have to be a programmer or mathematician. Anyone can do this. All of the above services offer bots that you can rent, for a fee of course.
I personally, having no programming or coding experience, decided to try and develop my own.
Quantconnect offers a demonstration using python and provides a backtest that you can clone to get started in developing your own crypto trading algorithm – with a wizard to guide you along the way.
Noob guide to Python (one of many great videos on this channel):
Python Programming Language group that will be able to help with questions.
To Get Your Algorithm Started, You Will Need Data
Data provides options for more variables, improving the flexibility and efficiency of your algorithm.
Ethereum and Litecoin have proven more difficult as there is little historical data. If you know of any sources, please comment below.
The Digital Age is Now Unfolding
Deep (machine) learning, blockchain technology – very few know of these concepts, just as 20 years ago no one knew what a website was, but just like the internet, they are fundamentally changing our world.
Banks, governments, any kind of intermediary will no longer be necessary.
Freedom from the centralized world of debt slavery is just above the horizon if we want it, we just have to get off the couch and take it.