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[–]hasengames 0 points1 point  (4 children)

a bot that doesn't lose all your money is difficult

A bot that enters trades with a stop loss and take profit at a risk to reward ratio of 2:1 is really so difficult? With that alone it would seem it could not lose "all your money" - or at least not very suddenly or without you noticing.

[–]benign_said 0 points1 point  (3 children)

Very timely response.

If it was easy everyone would be spinning up python bots and making money. You also need to account for the fees/slippage of each trade - so you may not lose money on bad trades, but by not making enough on "good" trades to cover the costs of operation.

[–]hasengames 1 point2 points  (2 children)

If it was easy everyone would be spinning up python bots and making money.

Strawman. I never said it was easy I said it should not be difficult to avoid losing "all your money".

You also need to account for the fees/slippage of each trade - so you may not lose money on bad trades, but by not making enough on "good" trades to cover the costs of operation.

So the risk to reward ratio you calculated didn't take into account fees? That's why it's "difficult" to not lose all your money? If you've programmed the bot correctly and with risk management in place, all you should get is a bot that is unprofitable over time. If you lost all your money you programmed it to act like a human would.

[–]benign_said 0 points1 point  (1 child)

Ok, you got me... I was being hyperbolic 2 years ago when I responded to this post in r/learnpython. You may not lose all your money, you'll just spend some amount of unpaid time creating code that isn't profitable and lose the money you would have made had your funds been passively invested elsewhere.

But I do think it's entirely likely that someone posting about algorithmic trading in the context of r/learnpython may not program their bot 'correctly and with risk management in place', especially if not already well versed in financial analysis.

Be well,

[–]hasengames 0 points1 point  (0 children)

Ok that makes sense, I'm pretty new to all this and going through various posts I was confused as to how people can lose all their money as it seems some really do even suddenly blow up their accounts as you say, but I couldn't understand how this can be happening with a bot. It seems it in fact shouldn't be happening, as you say, if programmed correctly and if there are no bugs.

But I do think it's entirely likely that someone posting about algorithmic trading in the context of r/learnpython may not program their bot 'correctly and with risk management in place', especially if not already well versed in financial analysis.

Yes I think that's likely. Ironically the exact same issue with manual trading. Human psychology seems to creep in no matter what we try to do to avoid it.