Yes he didn't do any back-esting, yet the bot was successful for 30 days so far!
The odds of creating an algo that delivers profit 28/30 days without backtesting is infinitesimally small.
That isn't a good thing, it doesn't mean you friend is an accidental genius, it means either a) he's lying about what he's done (no accusing, just saying), or b) it is a very, very, very simple bot and one which works on an indicator like weekly MACD or similar, and caught 4 weeks in a row where the trend was moving up.
Either way that algo
will shit itself and lose money in the not too distant future - he hasn't developed anything valuable OP, I promise you.
When I started out I built a custom bot that ran on about a dozen different indicators together. After some pretty naive and shitty "backtesting" on my part, it was showing me ROI of 27x per 6 months historically. I thought I was onto a winner straight up - a friend told me I'd fucked up the backtesting, I told him I didn't, after a few
days of just running over the backtest data I realised that one mistake in the code was causing it by not removing some of the cost of trading that it should have been.
That small % addition every hour in backtesting led to 27x of make believe profit I wasn't really making with the algo. You don't make that mistake two times. Your friend's algo might work on the last 30 days, it might blow all of his capital in the next 30. You need to backtest the shit out of it to have any chance of being able to rely on it.
A friend of mine developed a bot where users can create an algorithm and let the bot trade 24/7 for them. It's a great idea and he's getting customers right after launching.
Which one? Those customers are probably going to lose a good amount of money I would guess.
So my question was if this will worth the time that I will spend on
Not unless it becomes your life and you're happy to learn some hardcore math, programming and technical analysis.
Start with money management (stop loss,tp)
Easy to implement risk mitigation in bots, takes very little time.
Remember about the news, economic calendar, natural disasters, dumb politicians, even dumber CEOs, etc.
Building an algo that take a feed from charts and also a feed from fundamental data (ie twitter, news feed etc) and making them work together is on another planet of difficulty.
Either one is doable and there is a lot of opportunity from sentiment-analysis-based bots in the crypto space for eg, but combining both streams of data in an actionable way that balances the value of events from both streams is past post grad shit.
And remember ALL indicators show you the past. Order flow is the only thing that offers real-time direction.
Very important statement.
maybe his friend. "bluff" him ,
