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Yes, that's a valid use case for this tool. Exchanges typically don't have this functionality. My opinion based on my personal experience is that it is rather u
by throwawaykyok 8y ago
Yes, that's a valid use case for this tool. Exchanges typically don't have this functionality. My opinion based on my personal experience is that it is rather unlikely to build profitable algorithms based purely on "technical analysis patterns": (1) Most of these patterns are pseudoscience, you can google for more info, only a few have even a bit of science behind them (2) There isn't enough data to train a model on minutely or hourly data. The crypto markets change extremely quickly (data distribution shift) so that most of the data you would be using to optimize model parameters is outdated and leads to false conclusions.
To make money off less frequent trades I believe (again, just my opinion) that your decisions must be based on news/insight/insider info, not charting patterns. In other words, more fundamentals. And that's much harder to automate.
Of course, you will find people that tell you the opposite and that they make money. My response to this would be: Of course there are those that make money due to simple laws of probability. With a lot of people trading there will be some winners. But it is mostly due to luck rather than skill. And the fewer trades your make (lower frequency) the harder it is to assign any kind of significance numbers to the results.
- luxpir 8y agoIt doesn't sound like you've thought this through. Technical analysis isn't typically based on patterns. Banks trade using TA (see Lehman Bros Forex trading handbook - available online) - it's not strange or unusual to trade a mean reversion strategy at HFT or retail trading levels. Nor a momentum strategy, or even trend following. Nobody serious trades the candlestick patterns you're referring to in algo trading. There is enough data to train all forex pairs - tick data going back decades, for free, via Dukascopy and other sources. You're spreading FUD, and while there is definitely a need for people to be cautious, your warnings are not based in reality. Better to warn them about the 70-90% losing rate of all retail traders (reported officially by all UK brokers), or the perils of overleveraging, or the risk of gapping/illiquidity in crypto... I could go on. But not what you mention - that's a strawman.
- throwawaykyok 8y ago> Nobody serious trades the candlestick patterns you're referring to in algo trading. You are correct. My definition of TA was these candlestick patterns, like the ones ("bullish engulfing") shown on the landing page. Mean reversion, momentum, etc are fundamental concepts that have solid mathematical foundations. I have absolutely nothing against these ;)
- rohitgoyal 8y agoThat's a screenshot you are referring to. It just shows how to connect different blocks. Like see the first gif that shows the kind of blocks we have with an example of indicator block (RSI/MACD etc). In no way there is a sign that it will make you profit. In fact it encourage you to test your strategies on past data and live data. Will try to make it clearer.
- luxpir 8y agoOK, OK, misunderstood your point - apologies. Yeah if they're selling those as potential profitable avenues... red flags are up. That's not selling shovels to miners, that's selling spoons.