Hey everyone this is Jacob here, today I am going to be talking about the 3 biggest tips I can give you when creating your own algorithmic trading system / bot. These tips are really crucial in ensuring your trading bot works as expected in real-time. I also made a video on these tips here.

Tip #1 Understand how your trading bot calculates

There is generally 3 way a trading system can calculate, the most popular being each tick in the market, when the bar closes or lastly when the price changes. You need to be clear on this calculation because when your trading bot is taking a profit or setting a stop loss this can totally ruin your strategy. For example say your trading bot trades on 1 hour candles and calculates on bar close, so every hour is when the trading bot updates with new information.You could totally miss your stop loss because of the delay of 1 hour calculations. To fix this I would recommend adding a smaller time series in addition to the hourly candles such as a 1 minute or 1 second series so your trading bot has a better idea of the live market and easily hit those take profits and stop losses.

Tip #2 Stop the trading system after your profit goal is reached

I have seen great success in adding this feature in my bot and really eliminates over trading and huge commissions. Basically you need the ability to set a daily profit goal for your automated trading bot and if it reaches that goal (generally a % relative to the account) the trading system stops for the day and resets the next, plain and simple. Allows you to lock in your profits and not overtrade.

Tip #3 The order in which a candle is built is important

When backtesting you could be getting incorrect profit and loss results because your backtesting software does not take into account the order in which the candlestick is built. You could see a green candle but the order of the ticks that built that green candle could be different in what your back-testing software is displaying leading to incorrect results, as in tip #1 have a 2nd time series that is used when trading to fix this issue.

I made a Youtube video on these tips and I go way more in depth, feel free to check it out :