How to create a trading robot?

The path of a trader begins with learning, reading articles, watching videos, downloading programs and using the acquired knowledge in practice. And it is at this stage that the realization comes thattrading on the stock exchangeis both an opportunity to earn considerable money and a risk of making a mistake. A person is not a robot, and therefore may well make a mistake. Analytical moments, organizational difficulties and the inability to cope with emotions take their toll. The resulting negative experience stays in the memory for a long time, and in the future is a trigger for constant doubts. Even if the situation turns out to be optimal for entering a position, past failures slow down the trader due to the fact that he has lost self-confidence.

At such moments, specialized trading robots come to the rescue. Today they are no longer something fantastic; moreover, it is in the exchange industry that they are used most actively. If you believe the statistics, more than half of all transactions concluded recently were carried out using software algorithms. Robots are conquering markets thanks to their ability to collect data in gigabytes, regardless of factors such as political conditions, unemployment, financial reports, etc. In a matter of seconds, an analysis is carried out using a programmed algorithm, as a result of which the robot gives a clear answer - buy or sell. Besides this, he is unlikely to hesitate due to past failures. Entering into a trade when there is simply nothing to do is this is not about a robot; he will not prove that he is right in the market, just as he will not be distracted by studying social networks or having a lunch break.

What is a trading robot?

Trading robot, also known as an automated trading system or an expert advisor, is software that automates the process of trading in financial markets. Such a robot is capable of analyzing market data and making trading decisions based on predefined rules. Trading robots can be designed to work on various financial instruments, such as stocks, currency pairs or commodities. They can perform buy and sell operations automatically without the participation of the trader, based on established parameters and trading strategies. Such systems allow traders to automate their trading strategyand effectively use time and resources to make a profit in the financial markets. You can understand in more detail what a trading robot is in the article "What is a trading robot?"

How are trading robots created?

There are several methods for creating a trading robot and obtaining a file that works strictly according to the trading strategy. And the first thing you need to create a trading robot is a well-thought-out and balanced trading strategy. Trading strategy is a set of clearly formulated trading rules, including:

• Money management rules are balance management, calculation of trading volume, risk calculation, calculation of stop loss and take profit levels.
• Rules for entering the market are a set of price indicators, indicators, patterns for performing a trading operation to buy or sell.
• Rules for maintaining a trading position in the market - this is a set of price indicators, indicators, profit or loss under which the position remains in the market or is modified.
• Rules for exiting the market is a set of price indicators, indicators, patterns, news background at which the position is closed completely or partially.

You can read more about trading strategies in the article "What is a trading strategy?"

Before you start working on creating a trading strategy, you should find out the latest information about the stock market. Do not rely too much on technical analysis and the use of various indicators that detectpattern reversalsand trends. This method, of course, is considered one of the most popular, but it does not always demonstrate effectiveness.

In order to evaluate a trading strategy, you should understand it by analyzing it for realism. All factors are studied, otherwise, most of the time will be spent ontesting ineffective methods. Even the personal qualities of a particular trader must be taken into account when choosing a strategy for creating a trading robot. There should be a complete absence of emotion in the assessment, only specifically defined criteria.

The next step in developing a trading robot will be the method of implementing the program code; we will consider several of the most popular methods:

Constructors of trading robots:

Automate the chosen trading strategy by simply transferring the algorithm into digital form - it seems that everything is elementary. The simplest option is to use a trading robot constructor. There are a large number of similar programs on the Internet, thanks to them you can automate an actual trading strategy without programming skills. This allows you to significantly reduce costs, both financial and time.

Market position and pending order types are also taken into account. Risk management tools are actively used, and they are used to calculate the size of a trading position. Tick charts are used for all available assets, and a tool is used that maintains and evaluates the statistics of the advisor's work, which takes into account the balance, trading level, free margin, etc.

You can use the designers on an ongoing basis, it’s not free, as a rule, the cost varies from $50 per month. However, the designers also have their drawbacks. The chosen trading strategy is used in general terms; it is unlikely that it will be possible to implement all the subtleties. Naturally, the designer presents everything in sharply limited functionality. Its use allows us to expect that the trading strategy implemented in the work of the adviser will operate at 70% of the planned potential.

Disadvantages of constructors:

• It is not possible to implement the subtleties of a trading strategy;
• All constructors are limited in functionality;
• Constructors are paid and are not cheap;
• The trading robot’s compliance with its trading strategy will be at the level of 70%;

Advantages of designers:

• An imaginary opportunity to implement a high-quality trading strategy;
• The ability to implement simple and uncomplicated trading robots;

Trading robot programmers:

Development of acustom-made trading robot, despite all the seemingly obvious advantages, is fraught with several important points:

In most situations, a trading robot written to order can cost from $200, the maximum price of the robot depends on the greed and conscience of the programmer of the performer. It often happens that a programmer does not write a trading robot from scratch, but uses previously written trading libraries. When using such libraries, creating a trading algorithm can take 15-30 minutes, while the cost will remain unchanged, and the use of libraries entails the nuances described below.

There are errors in the code, as a result of which the robot has to be modified for a fee. Libraries and code may contain critical errors that do not appear in the strategy tester, but are immediately shown when trading on real accounts.

Often, executing programmers disappear from view after receiving an advance payment, so you should not pay the full cost of the order right away, and there are situations when the programmer receives a quality trading strategy or fishes out all the secrets and also disappears from sight.

The price of creating a trading robot?

This question is one of the most pressing for traders among those that are asked to developers. In fact, the cost, as well as the time frame for completing the work, will depend on the degree of complexity of the tasking. If a robot is written using a traditional algorithm, naturally, it will cost relatively little. Writing code for it is not that difficult. Much depends on the use of additional settings; the more of them, the naturallyhigher the pricewill be. Naturally, bringing arobotto life under the chosen conditions will cost more. On average, the total cost varies from $500 with all modifications upon provision of detailed technical specifications.

Disadvantages of working with programmers:

• Expensive cost of work - experienced programmers do not work for less than $300, and those who work by the hour charge from $30 per hour of work. How this hour is considered is a big mystery;
• Disclosure of ideas and secrets of the trading strategy to third parties;
• Probability of errors in the code;
• All improvements and modifications will be paid;
• Disappearance of a programmer with payment or trading strategy;
• A large amount of time to implement technical specifications;
• Checking the work’s compliance with the technical specifications - often programmers interpret technical specifications as they want, and not as the customer wants;

Pros of working with programmers:

• One plus - your order is written by a programmer and not necessarily an experienced one;

Learning a programming language?

In order to check the algorithm that was created by a custom programmer, you must be able to write codes yourself. On the other hand, if a person has such knowledge and is able to test a ready-made robot, then why should he place such an order at all?

In order to write a working trading algorithm, you must have certain knowledge and skills, in particular, study common programming languages. Thus, you canautomate any trading strategieson your own, and then modify them repeatedly without spending extra money. Why not learn a programming language from scratch, given that no one has ever been born with such knowledge?

Disadvantages of learning a programming language

The only disadvantage in this case is the time required - from 2 to 4 weeks are spent on such training. In everything else, you can see continuous advantages.

The main advantages of learning a programming language

Initially, it is worth arming yourself with the goal of learning a programming language in order to create your own trading robot, this will allow you to receive significant inspiration to implement your ideas in the future. Moreover, a person who understands trading and knows how to write codes will be able to continue to create trading robots and indicators, selling them through the specialized MQL5 market. Trading algorithms today are written in those languages that are in demand in all directions. In particular, it is worth giving preference to MQL4 and MQL5, or more complex languages such as Python and C++.

What do we end up with?

Having automated trading, you should maintain the understanding that a robot does not have flexible thinking, and it will still not be equal to a human. A living trader and one in whose electronic brain the necessary strategies have been “embedded” - both cases willhave their pros and cons. The trader is able to adapt to a changing market, while the robot strictly follows the established algorithm. Among all the listed options for creating it, the last solution has an obvious advantage. Only by knowing how to create a trading robotfor your own purposes, you can in the future, without allowing significant losses and without spending significant funds, optimize the parameters in a timely manner and ensure that the adviser’s work is error-free . The potential earnings in this case are certainly worth the several weeks spent on training.