The Story So Far

About five years ago I was talking with some colleagues about Bitcoin and it’s volatile price swings. I had a very simplistic idea; why not just buy low, sell high and then repeat. But rather than do that by hand, have a computer do it. Lots of times a day. With computer like precision and no emotion.

First Draft

I took a couple days to create a basic trader. It checked the price of Bitcoin and made decisions as to whether it should buy or sell. It kept a record of what it would have made from each trade and attempted to prove it could turn a profit.

I realised quickly Bitcoin is just too volatile. It moves so far, so fast and with no underlying pattern that you can quickly lose a lot of money. I realised things would be much easier if Bitcoin stayed within a certain price range and just went up and down over and over again, covering the same area.

Currency

The answer came to me a few days later… currencies. The governments of countries are very motivated to keep their currencies stable, which leads to movement mostly contained within the same pricing area.

I had the asset I would trade with.

One Two, Skip A Few…

It turns out it’s really hard to trade currencies automatically and make money. Even harder to keep on making money consistently. I tried strategy after strategy and came up short. Once I lost a few hundred pounds; another time I made almost a thousand pounds and then started losing consistently, so I cashed in the last of my profits and spent them on computer games (I regret nothing!). Finally I gave up, for more than a year.

Finally A Working Strategy

The current strategy I use is one I tried years ago but quickly discarded. I had given it a go, but without any precision. It was a rough implementation and it failed. I realised the devil was in the detail; my strategy needed to be customised to each individual currency pair.

I started with test accounts and split tested them; trying out slight variations to find the most successful one. Eventually I was ready to launch.

My strategy has now been profitable for six months. While there’s no guarantee it won’t go wrong in the end, consistent profitable trading for six months is a good omen.