I'm terrible at trading. I admit it. Every time I buy a coin, it seems to lose about 25% of it's value almost immediately.
Now I know trading, whether it's Forex, Stocks, Cryptos or whatever, is a skill that can be learned. It's also something where some people have a natural ability, they just seem to know when to enter and exit a particular trade.
Coding is also a skill that can be learned and again some people have a natural ability here.
There are plenty of theories on these natural abilities and it would be an interesting area of research but not today.
Today, I want to leverage one ability to compensate for a lack in another.
We've already established I don't have a natural ability in trading. I don't have a natural ability in coding either. What I do have, is a learned ability. I developed an interest in programming as a teenager and it's never left me. The interest is what is needed to develop the ability.
I'm still interested!
Having recently started learning Python this is all part of my learning experience and I hope to have you all along for the ride. :-)
As an experiment, I recently wrote a small script to test a theory I had that even picking trades randomly would be more profitable than me trying to pick good trades.
The assumption was that a coin with high volume will also have high volatility. Hopefully high enough volatility that the sell order gets met and you make a profit.
For the most part, this works. The danger is, if the volume is there because the coin is getting dumped you're likely to lose. However if you wait long enough, the coin will almost always be pumped at some point and you eventually get your profit.
The simple naive experiment above was enough to pique my interest and prompted me to begin developing code to allow for more sophisticated approaches.
I will start with simple technical indicators and from there, move on to machine learning techniques, neural networks, sentiment analysis and whatever else I can think of or is suggested.
My primary target is to develop an app that will be able to use a multitude of methods and be able to fully backtest and paper trade, all within an easy to use GUI frontend.
If I also end up with a profitable trading strategy, that would be great!
As I develop this code, I intend to document the progress here on Steemit and have the latest version always available, at my GitHub, for anyone to try for themselves.
I'm still at an very early stage of development here but I am making some progress.
I have just learned about threading in Python so I've used this to set up some background threads that pull in live price & volume data from Poloniex. It also keeps historical price data and continually updates these and stores them locally in .CSV files.
The next step is to develop a framework to use the historical data to backtest some simple strategies using moving averages.
Once the backtesting framework is working, I'll add more technical indicators such as MACD, RSI, CCI etc. I also want to have a crack at implementing this.
With all that in place, I want to setup paper trading and live trading.
The GUI will likely be added round about this stage.
Then the fun really begins. Bring on the Artificial Intelligence
As I mentioned above, this is all part of a learning experience for me so I welcome any help, advice or ideas and would encourage anyone with any skills in coding or trading to get involved.
Download the code from GitHub and have a play with it. I'm not using any license or anything so if you find it useful, want to use it in your own project, or whatever else, there are no restrictions.
That's it for now. I'll be back soon.
