Hi all, I am completely new to algo investing, and since I know that there are probably going to be a few other people here that are also new, I’d like to try a little experiment in this community.
What I am planning to do is to document the process here on how I go about learning about algo investing, the steps that I take, my thoughts, the resources that I use and the results. The hope is that other people can look at what I do and compare it to their own strategies, offer advice or try something similar themselves.
Ultimately, I’d like it to be a collaborative effort, aimed at helping very new algo investors like me learn the ropes and I am hoping that any public successes or (eek!) failures that I have will at least be interesting!
Firstly, a little about me and my current experience / skills(?) with investing, programming and algos:
- Programming - I don’t have any programming skills as such. I have built websites using HTML and CSS, so I understand the principles and concepts of structured languages but have never used C, Python or anything like that.
- Investing - I am very much a traditional investor. When I pick stocks I tend to do it based on a company’s financial performance (EBITDA), likely future performance, P/E, social responsibility and the like.
- Signals - I don’t really know anything about the more subtle signals that algos use to track stocks; things like moving averages, bollinger bands, split investing, PEG are all alien to me.
- Analysis / logical thinking - I am pretty good at analysis, math and logical thinking. I am (almost) never happier than when messing around in spreadsheets and exposing the interesting things that numbers do to each other!
I will also share what my aims are from investing, since they will guide my strategy and your aims could be different:
- Previously, I have tended to prefer longer term, buy and hold strategies rather than buying and selling all the time (that will change though!).
- I like algo trading because I don’t have time to track the stock market every day, so having an algo that can do that for me and make emotion-free decisions is extremely helpful.
- I like to diversify risk vs. reward, so I will probably have an investing strategy of thirds - One third lower risk / Blue Chip buy and hold / rebalance, one third medium risk buy and sell over the medium term to make capital gains, one third high risk where I use signals to buy and sell stock relatively quickly.
- Financially, I am expecting to start live-trading around $20,000 over the next month and am looking for decent returns over a two to three year period.
- I’m an ethical investor, so that does play a part in the stocks that I choose.
In the next post, I will share what I think I need to do to get up to speed on Quantopian and into live trading.
