A trading algorithm is a set of hard-and-fast rules for all trades.

Mathematical statements inside a computer program can do it.  However, the algorithm can be rules you write down and follow faithfully.  The point of this is to remove your emotions from trading decisions.

If you read or listen to any successful stock investor, they will tell you that your emotions are the biggest challenge to success.  It isn’t easy to stay the course when your stock or cryptocurrency is down.  And it is even more challenging when it gets even lower.  But during any stock or crypto trade, there will be times when it is down.  The longer the trade length, the more dramatic the potential for draw downs.  When during an open trade, your stock falls below the starting condition, in a long trade – It is called a draw down.  It is not a loss because the trade is still open.  When this occurs, your emotional reaction is to escape the risk and close the trade.  If you sell during a draw down, you sabotage your chances for success.  This goes back to why our system uses Swing Trading, with shorter duration and Risk Reduction techniques.  The algorithm pulls it all together. 

A good algorithm defines when you should open a trade and when you should sell it – no emotions here!  As we go through how to use the TradeFinder Modern Trading system, there will be many examples to help you understand its power.  We use artificial intelligence to avoid draw downs and losses.  Our specific artificial intelligence tool is called “Deep Machine Learning.”  It uses nested Neural Networks to do its work.  We have found that by combining multiple neural networks through a technique called “neural network nesting,” we get a superior result.