YouTube Video
YouTube Video Transcript
[Music] hey this is David for big bits and in this video we’re gonna take a look at how to take our strategy that we’ve built in this development series and kind of test it out with paper trading you know if you’re not familiar paper trading is just simulated trading just noting your trades that you would have made in a journal and tracking the profit that you would have made now are the good things about using paper trading is you get to see not only with the strategy tester and trading view how well the back-testing did but with paper trading you get to see how well you are actually executing that strategy now a lot of times when people come up with a strategy they might get emotional when the price changes so tracking your trades that you would have actually made in a paper trading journal or like this tool and trading view is a good way to see just how well you might actually do when you do trade with the strategy that you have now I’m going to remove myself from the video so that we can see everything all right you can see now the strategy that we have on top of our ribbons that we’ve made you can see we entered here exited here with a profit or loss entered here exited entered exit okay and the strategy tester you can see the trades that it made but what we’re going to be doing in this video is we’re actually going to be using the trading panel which you can see here on the bottom part of the screen and it gives you several options and you can actually connect to different brokerages accounts and you can actually use this to actually trade with the order panel now we’re not actually going to be doing that in this one we’re going to be using the paper trading this is setup and trading view as a broker so that they can track trades that aren’t real now the first thing you do after you set this up it’ll automatically create everything for you you can see you have an account balance and equity the first thing we’re gonna do those we’re actually going to click on our settings over here and we are going to show the order panel kind of gives you an idea of what you’re actually going to be working with when you do go to make orders you can actually place limit orders you can use a take profit and a stop loss when you place your orders we’re gonna be doing market orders in this particular video just because they’re very easy to work with and very easy to understand if you want more information on limit orders I suggest you look at their documentation but we’ll take a brief look at it kind of towards the end of video now now that we have our order panel pulled up to the right here we’re also going to reset our trading account and the reason we’re doing this even though it’s brand new since I want to change the balance I don’t really have a hundred thousand dollars that I would be able to test with in real life so let’s actually change it to let’s see eight thousand dollars it resets and it’s gonna reset our account balance and our equity as well so now we can have an even more realistic view of how we’re gonna be trading now we also need to keep in mind as you might have noticed from our last video we need to keep in consideration the Commission and fees so we need to set up our Commission settings and this entire series I’ve been pretending we’re using coinbase Pro and they have a point five percent fee on buys and sells so we’re going to use that for our Commission here now we have that set up we’re going to start actually making in order like I said we’re going to be using market orders since we don’t already have a position and you can’t really short on coinbase we’re going to be using a buy order to open our position so you can select which side you want to use so if you already had a position open you can click on the sell side and you can sell through the order panel to close your positions now we have selected the buy side we have chosen a market order and we choose the quantity now this is the number of units that we’re looking at we are using Bitcoin here on the daily chart you can see the price right now 7410 and if we worked about one of these that would use most of our balance but we are going to use one and we can go ahead and buy one now but I’m not gonna do that I’m gonna go ahead and I’m going to add a take profit and a stop loss now with a tape profit this will place a limit order or execute a market order at the specified price that you set based on the amount you set here now I recommend you set the actual price field here because when you start fooling around with the percentages and dollar amounts that is based on your total equity I believe and it’s to me it didn’t seem to feel right I would like to look at percentage per trade but if you’re working with a portfolio then it might be more important to measure on your entire equity so it might just be easier for you to go ahead and calculate the profit that you want to get and convert it into the price and set it that way let’s just set an order here it’s 7500 for take profit let’s set our stop loss at 7,000 all right so now when I buy on our paper trading it won’t actually execute an order but it will mark down that we bought at this particular price and it’s also going to place a take profit order and we’re gonna see a stop loss and I’ll show you that in just a moment so now we’re gonna hit the Buy button ah and you can see zoom in a bit here this blue line is our position where we entered this red line as you can see is the take profit and this one is the stop loss you can see our position on the paper trading here we have one it’s on the buy side that’s the average fill price and this is where we’re gonna be taking profit at and this is where our stop loss is at and this is the current profit now we can also take a look at the orders and you can see how this worked when we made our buy it filled the buy order but it also placed a stop and a limit order and those will execute if they get triggered now they may not get triggered you may want your strategy to go ahead and closed based on other reasons so let’s take a look at what we can do soon your’e and I did want to also mission let’s see where was it on the trading journal I believe no on the history here okay so you can also see the commission that you paid based on the fees as well on the orders in the order history here so when you’re doing your paper trading it’s also important to note your commission so you’ll you’ll want the price to move up $37 since you bought one Bitcoin in this example in order to at least break even on the fees that you paid on the original one but you also need to consider the Commission on the sell order which is likely going to be about the same amount so you’ll probably need somewhere in the order of $75 to break even on the trade and an increase on price so it’s important to look at this to make sure that you know where you’re gonna come in at in profit with your Commission and it gives you an idea with the position screen here but I don’t think it really accounts too much for the Commission when you’re looking at the profit here it says we’re up eight point six five and profit but I don’t believe that considers the Commission so just keep that in mind when you’re doing a trading here now we have already entered our position we don’t really want to wait for this example for it to actually close the position with the tape profit or the stop-loss so what we’re gonna do is we’re going to assume that we had another part of our strategy trigger a cell and you can see here we had an entry it’s really small but there’s a blue arrow trying to move the cursor as a blue arrow here and that shows where the entry on our position was and we’re gonna sell and you’ll should see a red arrow as well come up let’s click our sales side we have a quantity of 1 and what we’re gonna do is we’re just gonna sell that one we’re not going short so we don’t need to take it instead of take profit or stop-loss let’s go ahead and sell that one excellent you can see we entered and exited on the same candle let’s go to our orders and you can see we had our limit and our stop this is where our take profit the limit was the stop was also set as an order until they were both cancelled that’s because we closed the entire position which there was nothing left to take profit from or to stop the loss from so it just cancelled the orders instead it filled here at this particular price you can tell the price actually increased by nine dollars and we had a profit based on the price however you can tell our account balance actually went down considerably by about what’s that sixty six dollars and that is because of the Commission just remember to keep in mind I told you it was gonna be about thirty seven dollars again what we sold in total it was about 74 dollars we made eight dollars in profits 74 minus eight is 66 that’s how much we had as a loss and you can see that reflected in the account balance so just keep that in mind again when you’re looking at your current profit that you also need to consider the Commission as well now we might just go ahead and look at the limit orders here we have a little bit more time left in the video so when you’re looking at limit orders you have a sell side and buy side just like you had for the market orders let’s look at the buy side here now it’s giving the option to set your ask at the current ask plus or minus a certain amount so this amount this plus six that is actually based on the tick’s or what they refer to here sometimes I believe it’s pips and it’ll increase the price of the current ask by six ticks and for Bitcoin right now in this particular chart it’s point zero one or one penny so we were to set the ass six above the current ask you can see it went from 47 cents to 53 cents here now we can also set the to the current ask we would be buying one Bitcoin here and we can also set our take profit as well and you’ll notice the pips and this is also the tick so if you wanted to do this as well you could replace using the price instead by using this and remember the dollar amounts and the percentage amounts I believe are based on the entire equity of your trading account now also notice on the sell side they do the exact same thing except you can see the bids here you could go plus or minus the bids the current bid in the book so if there’s a large spread in the book and you want to beat and if you want to sell you want to get in before all the others you can do bid minus one and that will put you just below the highest sell in the books but you also have to keep in mind that might also execute immediately and you might get different fees depending on the exchange that you’re using but that pretty much covers it all for now we’re gonna go into some other things I’m pretty sure we’re gonna start working on some other indicators now one of the things I want to work on is specifically using other indicators let me pull myself back into the video here and we’re gonna be using different indicators I’m gonna create some custom indicators I’m going to show you some other useful functions but for the most part I think the series has guided you into how to create your very first indicator and develop that into a very complicated or at least friendly robust indicator with tons of features that are at your disposal now plenty of examples and if you need to you can always go back and look at the videos but we took you from a simple indicator to something much more robust and turn that into a strategy and we showed you how to execute that with the paper trading now going forward we are going to be taking a look at different indicators and one of the things I’m really interested in showing you is combining multiple indicators into one and to do that I believe we’re going to use a scoring system we’re gonna take the indicators that we would like to use in a particular strategy we’re gonna add a scoring mechanism and we are gonna trade based on essentially a confidence level that’s what the scoring is the more points your strategy would create with the different indicators the more confident it would be in whichever direction it should trade we’re also gonna take a look at some other features that I’ve come up with and if you have any suggestions please leave a comments on the video and I’ll take a look at all of those but that’s it for now thank you and have a good day and by the way I forgot to mention check out the profile on trading view where I have all of those scripts for everything that we’ve done already this is the first video you’re watching then you probably may not be aware that we have tons of other tutorials already out there and other indicators as well so please check out my profile on trading view and if you like this video please like the video and of course if you like these types of videos and want to see more in the future please subscribe it helps me a whole lot so now I’m actually done thank you and have a good day [Music]
