Photo by Luca Bravo on Unsplash

Algo trading, a field that is as complicated as it sounds

Algorithmic trading is basically instructing a computer program what to do in certain situations. It has triggers and conditions and a constant data stream that feeds the algorithm with all the information needed in order to make decisions and execute orders.

The Bitwolf Capital engine has a clear and concise trading procedure that allows it to trade safely and return regular profit with minimal losses.

As you can see in the image above, everything starts with market data which is then processed by our engines and executed onto the exchange.

The algorithm is constantly developing, being optimized every day and always looked after, we do not leave our algorithm run by itself because even a minor bug can result in a loss and basically we really like to apply Warren Buffet’s rule number one (“Don’t lose”) even if sometimes it can happen in short periods of time.

Why use an algorithm to trade in the first place?

This is a question with a quick and easy answer: People are just not as systematic and repetitive as a program or a machine, that’s why big car manufacturers have replaced humans on the production lines with machines and the humans now just supervise the way the machine works.

This study shows that humans can average around 2.5hrs/day of focus, the rest of the day is creating and accomplishing other tasks and not being productive. Imagine a fund that trades only 2.5hrs/day / trader, well you would need a lot of traders, and it was the case a long time ago when big hedge funds employed 300–500 traders to do just that.

Another important aspect is that an algo doesn’t have any feelings and it does not stress about a bad entry or a position going the wrong way, it just does what it has been programmed to do and does it CONSISTENTLY, i think this is the key element here, consistency is one of the biggest plus of a trading algorithm.

The 0% days

While this happens only rarely, there are two situations that can cause a 0% return day in our report. They are mainly due to the fact that we use multiple short/long term strategies.

The first one is that we have positions opened from the days before on one of our longer term algorithms and we can not state that we have achieved a certain profit until the positions are closed.

The second one is when either our traders or our algorithm decide that it is not safe to trade based on our strategies(the automated and manual protections in the image above).

While our engagement is to produce profit for our valued customers, the risk management is even more important and we take it very seriously, that’s why we prefer to have no wins and no losses in some select situations.

Security of the assets

This is one of the most asked topic of our clients. Who can access the assets, where are they stored, how … “How is my money safe with you?” .

We knew that this would be a big deal since before we even begun trading for our clients, so we have devised a procedure that uses 3 people in order to unlock a wallet and in the case something happening to one of the people involved we also a redundancy plan.

Now for the assets that are traded in the hot wallets on the exchanges we use all the proposed security measures in order to minimize the risk of hacking on our part(2FA, IP Whitelist, no withdrawal API and so on), but if one of the exchanges we trade on is hacked, well we are as hacked as you are so our responsability stops there.

Have more questions? Feel free to ask them on our telegram group: https://t.me/BitwolfCapital

Or visit our website : https://www.bitwolfcapital.com/