Trading Automation

I am just going to put it out there, as you know I have said time and time again in my streams. Personally, the whole automated trading concept is not for me. However, that’s not to say there are not some good strategies, tools and instruments that could work for some people.

Risk tolerance, time frames, bull vs bear markets all play a role in trading. This is emphasised when the trading is automated.

A few weeks back, myself and @Paul_Varcoe starting streaming about shorter timeframes and automation. We said we were working on something in the background – mostly to do with trading via prop firms. Here’s on of my streams on that topic. So, the next part was automation.

Here's one of these streams:
www.tradingview.com/streams/I0uI017vfU/

I have been lurking around a couple of services, tools and platforms – one of these is a company/product called 3Commas. A few things I found interesting.

One of which is that it supports multiple cryptocurrency exchanges, allowing users to trade on various platforms using a single interface. For the Tradingview community this is a very useful option. You can even go as far as connecting your bot to one or more TradingView indicators of your choice, and the bot will automatically receive alerts and open trades accordingly.

My reluctance of automation has always been, if a bot can do it – we won’t need Doctors or Police officers as they will all want to be professional traders. I have also spent some time in the money management sector and know the investment and effort some very large operators have put into the automation game. What I liked about this 3commas platform, is that it opens the door for retail to play in this world.

Having access to trading bots that can execute trades automatically based on predefined strategies is one factor, it still requires users to set up custom trading strategies or choose from a marketplace of existing strategies developed by other users. So, what this means is if you have a specific trading strategy you can link directly from Tradingview and just allow it to open trades.

I have taken this image as an example from their site, it’s easier than trying to write it myself.



There also seems to be a lot of open-source code, literature and information readily available online. All beneficial factors if you’re planning on going down the automation route.

Myself and Paul have been more conventional traders, operating in well established markets. But of course we have had our dabbles in alt coins, Bitcoin and so on. It seems to be the way the world is shifting.

I have been using webhooks on Tradingview recently to trade Aussie dollar and Euro on smaller timeframes just sending an alert to one of my channels – but the ability to take out the execution stage is a new one on me. If you’re a crypto fanatic I can say this is worth a look for sure!


When looking at this automation, I found another editors pick here on @TradingView
So, although I know very little about the strategy or the individual trader @Bjorgum who wrote the article, it’s a great example of the type of power mixing things like 3Commas and Tradingview can yield. Throughout 2023 I have shown and shared several articles on Prop firm trading, shorter timeframes and even how to use Chat GPT to write Tradingview indicators.

Link to one of them:
www.tradingview.com/streams/sVlP2bdcGv/

My next step is to use chat GPT to program an indicator I can fully automate (market condition depending) to link to 3Commas using TV as the glue.

Here’s an example of what I mean:
I literally asked ChatGPT this question “can you write a pinescript version 4 code to enter trades based on pivot point breakouts taking profits at S2 and R2 with stop losses in the other direction at R1 and S1.”

I got a reply;

Before you ask - The code will probably get rejected to put out as an indicator as Pinescript will say “Pivot point indicators are readily available” but copy and paste my question above and you should get a similar result. Of course, this is only an example. Feel free to play around with your own strategies and concepts.

The idea then is to take this through the papertesting and backtesting to refine a strategy that you feel comfortable with in terms of plugging into a bot and connecting to your broker.

The whole concept for me is mind blowing, the fact that anyone can have a Tradingview account, use ChatGPT to build and indicator and execute a trade via your broker on a platform like 3Commas.


Over the next couple of weeks I intend on digging a little deeper with these and either start with using ChatGPT to link a strategy via Tradingview into 3Commas or take a strategy or indicator off the shelf and test drive it in a stream or sequence of streams.

Maybe give me some ideas, if you like? what timeframes? What instruments etc...

This will be part of the educational, how to make trading automation a real thing series.

Anyways! Enjoy the Holidays - Merry Christmas and a Happy New Year to you all!



Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.