(this is part 2 of the Algo-Trading Journey series)

The biggest advantage of a rule-based system is that it can be backtested and verified that it works (or doesn't work) BEFORE blowing up your account and losing all your money. 💸

Trading With Knowledge And Intuition

If intuition was so great, 90% of retail traders wouldn't be losing money.

Even better question: to whom are they losing money?

To institutions.

And institutions have thousands of developers building algorithms designed to:

• perform under pressure (because algo feels no pressure)
• exploit trading behaviors (like panic trading)
• detect patterns that repeat over and over
• etc.

Also, your "intuition" is very hard to test.

Who knows what you would do in some situation 2 years ago:

• what would be your state of mind
• what news would you read at that time
• what would draw your attention
• who influenced you at that time the most
• and so on and so forth...

However, without testing, you have NOTHING.

Well, nothing except the hope you won't lose all your money. 🤦

Performance Consistency

How many people find success trading on their demo account only to start consistently losing on a real account?

Too many to count.

Emotions impact behavior (this is beyond obvious).

So even if you have good performance... even if you're very profitable on a real account... what happens when...

• you have one bad day when you're sick
• or you had a fight with your spouse
• or got into a minor car accident where your brand-new car was severely scratched

...what happens then?

Do you wipe out all the profits from the last 12 months?

Or worse?

My conclusion is this: allowing emotions to touch your trading account can only end in disaster.

What's Next?

I plan to post my progress here on dev.to because I find it fun... and I enjoy it.

If you want to join me on this journey, then I suggest you:

• follow my profile for more updates
• bookmark this article for future reference
• and like this post, so more people can see it

Now let's go and conquer the market :)

Will

P.S. here are some cool resources:

1. Best Programming Language For Finance
2. (FREE) AI For Finance Tutorial
3. Starter Code For Bot Building