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Most common mistakes in algorithmic trading
Most common mistakes in algorithmic trading

Algorithmic trading becomes increasingly popular not only among professional traders but also among beginners. Such an approach minimizes the impact of the human factor on the result, makes it possible to trade non-stop, stabilizes your income level, and frees up a lot of time. However, to become a truly successful algorithmic trader and develop a great strategy for a robot, it is important to learn not from your own mistakes, but the mistakes of others. And we will try to tell you about the most common ones.

Trusting indicators implicitly

Technical indicators are regularly praised not only for advertising purposes. Their effectiveness is confirmed by thousands of traders that accumulated their capital through the skillful use of indicators. And, of course, such tools are an integral part of algorithmic trading. But can you trust them implicitly?


Technical indicators not only can be used but they are necessary if you opt for automated trading. However, the signals they generate need to be filtered. To do this, you can use machine learning methods, mathematical statistics, various fractals, and more. Only algorithms that validate signals can be considered truly successful.

Partial adjustment of algorithm parameters

When starting to test a new strategy, many algorithmic traders begin to adjust the values ​​of certain parameters. The reality is that it is not difficult to determine the input data that lead to a positive result. As soon as traders reach this stage, they consider their work completed and put their algorithms into practice.

However, it is very important to remember that those input parameters that guarantee success in a particular timeframe may be completely ineffective in other timeframes. Therefore, it is worth testing your model on different market segments. Thus, you will be able to determine the optimal values ​​of the parameters that will lead to the desired results at all time intervals. To do this, experienced algorithmic traders use modern machine learning methods.


If you do not want to waste time looking for the best results, you can go the other way. Use an algorithm filtering by time of day or create a system that will allow the algorithm to distinguish between different market conditions and select conditions in which your trading model will be effective, and trade only under them.

What if you cannot devise an effective strategy

From many years of experience, we know that the slightest mistakes made in the process of developing a strategy for the trading robot can result in financial collapse. Especially if the investor is ready to rely entirely on the automated system.

Therefore, if you are not confident in your decisions or do not have enough knowledge to program your own strategy, it is better to trust proven and well-known robots. You can choose them here. Their effectiveness has already been proven by thousands of users. If you still have any questions, just try a robot for free. This will allow you to see how effective your strategy is and assess the real prospects of automated trading.

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