Not doing real great the last few weeks.. Not the Bot or EMA's fault at all.. Just that BTC as been sideways most of the last 3 weeks..
It hasn't been sideways from what I can see...
I am getting slowly eating away with Trade fees, and slippage.. (Mt Gox must love it) LOL
Because Goomboo's method only works in certain scenario's.
If the market varies in a certain way, you'll lose a whole lot. If the market varies in a certain way, you'll make about 20% of your full investment.
The failure is (IMO) that the bot uses only one method and one strategy to win. "1 size fits all".
It also seems to lack awareness of what is a good decision vs a bad decision at any given moment. Which means it is not taking into account many different pieces of data. I am not even sure if the B-Bot is taking into account the fee structure at the exchanges. So far, from looking at it, it is only looking at EMA values and that seems to be about the majority of the decision. (?)
Otherwise, there is (or should be) no way to lose actual money on fees.
It is my hope that in a future revision, the B-Bot needs to evolve not only to use "A different strategy" but to use "more than one" depending on prior conditions.
0.25% can earn as much as lose you money.
In watching this now for a few weeks, we need at least a 0.30 swing in BTC price to make even a small profit..
I have my doubts that following the width of EMA lines is alone useful, if the B-Bot doesn't work in concert with other pieces of information it will continue to make bad decision that could otherwise be avoided. Making other decisions that are in concert with the EMA is in line with basic trading strategies.
I guess this is where patience comes in.. All it will take is one or two 0.40 or 0.60 swings up for us to make a decent profit..(Like the one back around the End of Jun into July. Wish I had been running this then..
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As a day trader I find this odd to believe.
If you have 100BTC and you earn only 0.40% or .60% that is approximately...100.6 to 100.4 BTC. Happening twice that isn't much.
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I think the max you can squeeze out of the market is 20% to 40% of whatever you put in (per month).
The problem is the increased risk and losing just as much as you are gaining. GoomBoo's method seems to be about making sure bets at the cost of significant opportunities. So if there were 20 opportunities to increase your wealth then you only took 2 of them because the EMA lines were blatantly profitable.
While you'll get those 2 sure bets to profit from (if the market oscillates the right way and EMA indicators actually work in that instance), some other trader may make 10 bets and win as they took on the added risk.
This is one reason I would LOVE to be able to apply EMA and use a bot against some of the Funds on BitFunder.. There are some huge swings over there on some funds.. I would think if you had a Bot that could trade there using EMA you you could make some serious $$$$$ Over a years time..
I wonder if that would be the case.
There are other strategies beyond EMA which will show you what is likely to be the next turn in the market. The EMA is pretty much reactionary rather than predictive. It tells you what is happening after the fact rather than as it shows up.
I see B-Bot as a good starting platform. If it could be retooled the right way with each individual having the capability of setting up their own methods (beyond or in addition to EMA) then it would work alot better.
I don't think the "1 size fits all" approach is good. There are situations where following the EMA line blindly can and will lose you money.
Hi PuertoLibre
,
I strongly disagree with a lot of what you have said, I'll take my points one at a time:
1. EMA is predictive in the sense that is uses historical values to project future trends. You are right that it is profitable only in certain scenarios
if looked at in the short term the math strongly suggests, that given enough time for the Law of Large Numbers to come in and level mean deviators, you will profit.
Here is a chart of your potential profit if you had been running our bot without intervention for the last year (you will be able to verify all of this when we release back testing in a couple of weeks, but I'm sure even rudimentary EMA back testing will give you similar results).
Notice how the one year shows an 800% profit at the end but the 2 month shows a very small profit at the end preceded by a string of losses. It's a matter of how long you stick to EMA without messing with it to let the math take over and take care of mean deviators:
EMA has been tested again, and again, and again and the math keeps telling us the same thing, if you run it long enough, without interference, you will tend to profit. Don't take my word or Gomboo's on that, run your own back testing on the public EMA algorithm and you will see the same pattern.
2. About the fee structure (I really need to put this one in the FAQ): This has come up before. Intuitively, it seems logical, that the bot not perform a transaction if said transaction would cause a loss because of fees. Think of the following scenario however: A crash begins, it came on all of a sudden so selling now would cause a loss, the bot does not trade; the market implodes, you loose your shirt. The bot must be able to make decisions based on the math, not outright profit or it could be really catastrophic.
3. When Kuroth said he needed a 0.30% swing, he meant a 0.3% swing of EMA, not of the BTC/USD relationship. Depending on what numbers precede the latest calculation, 0.3 EMA could represent several percentage points in a currency relationship making for a handsome profit.
4. I agree that we could have the bot consider more data points, but we can not have the bot use more than one strategy at a time. EMA uses the data points the bot currently has available, there are hacks we can perform on the math for slippage, etc. but the base algorithm uses certain information that can't be altered without altering the algorithm itself. We want to use tried and tested strategies, so we really don't want to go into the business of creating new algorithms. Investment banks spend millions on their trading algorithms and more often than not get it wrong, we want to make available stuff we know works and that can be back tested for years
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5 On this one I also agree with you 100%: letting people input their own strategy. I imagine you mean a way for people to enter their own script and have the bot trade accordingly. That hasn't been suggested before and it strikes me as a genius idea; will definitely look into implementing that
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Please let me know if I may be of service in any way
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Pablo.