Algorithmic Stock Trading: How to Beat Market Volatility

Algorithmic trading helps forecast the movements of stocks before they occur. However, Algorithmic trading systems have pros and cons for stock market traders. When coupled with Machine Learning, the benefits of algorithmic trading may outweigh the cons for many investors and can provide the framework for steady, consistent portfolio growth.

Algorithmic Trading uses predetermined, statistics-based strategies which can operate on computers with minimal oversight or human involvement.

Computers offer many advantages over human traders. Their analytical capabilities far exceed human abilities in both speed and accuracy. Also, unlike humans, emotions are completely removed from the equation. For these reasons, many investors have realized that algorithmic trading can offer consistent portfolio growth

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Whether or not you decide to use Cannin’s algorithmic trading software – please remember to do your due diligence to determine that the correct analytics and strategies are in place to help maximize your portfolio’s growth potential. If the algorithm you choose to use has inaccurate parameters in place, the algorithm will not work as intended.

What are the algorithmic stock trading strategies I should be looking for?

Algorithmic Trading: A Tool to Beat Market Volatility

Most algorithmic trading methodologies utilize software to identify profitable opportunities much more efficiently than a human could. Algo trading models use technical indicators to identify these opportunities.

When developing this type of software, developers will typically use bots to test against historical market data. This is known as backtesting and this is the best way to verify whether or not the model is sound enough to utilize.

Like any other legitimate experiment, the backtesting is only as good as the controls. Ensure that your algo trading software backtests with sound scientific practices in mind. 

Algorithmic Stock Trading: How does machine learning come into play?

Algorithmic Trading: Use this to Beat the Market

Algorithms already have the ability to make complex decisions efficiently, but with the power of machine learning, these strategies can continue to improve based on what works and what doesn’t. The machine learning algorithm can evaluate several different strategies and refine the trades based upon the lowest and highest returns.

Machine learning algorithms can be an absolute game-changer especially in volatile markets where prices fluctuate constantly.

Let’s use an example of a recent Cannin Smart Stock Algo Signal from American Cannabis Company AMMJ. Our algorithm noticed the imminent convergence of several key technical indicators, allowing for an opportunity to purchase shares of AMMJ in advance with a significant degree of certainty that the stock would increase in value. Sure enough, the stock jumped 12% the next day and our members made a significant profit.

Algorithmic Stock Trading: Where should I start?

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Several sites offer algorithmic trading services and the pricing can range anywhere from $99/month to thousands per month depending on what you choose.

Sites like collective2.com and algorithmictrading.net offer different services depending on your preferences. Of course, Cannin offers a proprietary algorithm that has delivered consistent gains over the last 12 years.

  • 30.1% Gains in 2019
  • 49.8% Gains in 2020
  • 108% Gains since 2012

Admittedly, there are many other resources out there and different strategies to evaluate but we hope this gives you all the basics you need to get you more familiar with the benefits of algorithmic trading.

Algorithmic Stock Trading: How to Beat Market Volatility


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