How to decide which Trading bot to trade?

With www.squareoffbots.com platform there are mixture of different strategies from option selling to option buying, stocks and futures trading bot. Each bot trade differently based on its inbuilt logic. In this article, let’s address how do we choose the right bot?

First let’s focus on expiry days, what are the top 3 best bots one can trade on expiry days alone? We know that most of the days market moves in range bound on expiry days and at times moves wildly. If we can control the risk during such volatile days, then we could end up making profits on most of the expiry days. Let’s find out what are the bots that made highest average profits on expiry days since inception.

Auto Adjustment Short Strangle bot

1% Bank Nifty Short Straddle bot

Machine Learning bot

These are the three bots that has made consistent returns on most of the expiry days. ATS – Auto Strangle bot tops the list with 80% accuracy on expiry days. Its highly recommended to trade these three bots on expiry days to make consistent profits.

Let’s look at the average profits made by these bots on expiry days. Both Machine learning bot and 1% BNF Straddle bot has similar average profit per trade of around Rs.900 with one lot and Auto Strangle bot average profit is around Rs.600 on expiry days.

Let’s check what will be our maximum drawdown if we trade these strategies on expiry days? The auto adjustment strangle bot tops the list with lowest drawdown of just Rs.2500 in last three months, considering the bigger Volatility we have seen in recent past, ATS bot has really controlled the risk well.

Consider trading all these bots with 3 lacs capital, then the max drawdown in percentage terms is just -3% for ML bot, -6% for 1% BNF Straddle bot and -1% for ATS bot.

Now let’s consider what are the bots we should consider trading on other days? Bots that are designed to make profits on breakout/trend following are good to trade on all days.

Golden ratio futures bot

920 Bank Nifty short straddle bot

Machine Learning bot

These three bots are basically directional in nature that makes higher profits when Bank Nifty makes any one sided directional move. The average profit from these three bots are relatively higher than all other bots. So trading these bots on all days make sense. Please note Machine learning bot is the only trading bot that ended up making profits most of the time throughout the week – Monday to Friday.

Bots to run only on Specific days:

There are certain bots that runs well only on certain days, best example is BNF Strangle bot. Compared to all other days, it has made highest profit on all Fridays.

Similarly BNF Directional Straddle bot made highest profits on Mondays than all other days

Nifty 920 Short straddle bot has made highest returns mostly from Wed and Thursdays

Conclusion:

Do not pick the trading bot based on its highest returns, always check which bot gives the lowest drawdown and given highest preference to that bot. Because best trading result is all about the trader who is trading the strategy, so if you focus on the end result of getting highest returns but if you are unable to withstand the drawdown and fluctuations, then you will quit trading or stop using the bot when you see streaks of losses. If your aim is to make decent returns with very minimal risk, follow the expiry allocation strategy we suggested above for best results. If you wanted to deploy strategy on rest of the days, then you can follow the allocation we mentioned above.

Above all, the foremost rule that you need to follow is never override the system. There will be days, where your profits of Rs.3000 or Rs.5000 getting wiped when market reverses, then you might of though if you had manually interfered and closed the position, you would have made profits instead of loss, So next time when you face similar situation, you would close manually with Rs.3000 profits but unfortunately that day market would have rallied big time, by end of the day it would have closed at Rs.13,000 profits. We have seen this happening with our trading bot users, people who manually interfere with the bots end up making lower returns than the people who followed the rules without overriding it. So never override your systems.

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