If you are familiar with the Tradetron algo trading platform, then you must be knowing that it offers a strategy marketplace from where you can deploy an algorithmic strategy created by other fellow traders. The marketplace currently hosts thousands of strategies, and it’s really hard to pick the best out of those strategies. In order to make this process easier, we have come up with some guidelines which can act as a checklist to find the best strategies from the Tradetron marketplace. Read on to know more.
If you want to learn more about Tradetron and how it works, please refer to this article.
Look at the Strategies on the first page of Marketplace
In the Tradetron marketplace the strategies are by default sorted based on the below 4 parameters:
- AUM (Asset under management)
- Sharpe Ratio
- Average monthly ROC
- Number of Live deployments
Hence, the strategies that appear on the first page of the marketplace are generally better than the others. The below screenshot shows the first page of the Tradetron marketplace as of April 7th, 2021.
You should consider these strategies first before exploring other strategies.
On top of this, you can also apply filters based on exchange, tags, or capital requirement
Check Drawdown and Sharpe Ratio
Lower Drawdown and higher Sharpe ratio are the ingredients of the best strategies. Hence don’t forget to look for these parameters in the strategy description.
You can find it in the statistics section of any strategy.
Make sure that the statistics are captured for atleast 3 months. The above strategy, for example, has stats just for 2 months. So it’s better to observe this strategy for one more month before going for live deployment.
Read the Strategy Description Carefully
The strategy description can reveal a lot many facts about the strategy that can help you make a decision. For example – from the strategy description you may come to know which instruments the strategy trades on, how many trades can happen in a day, whether the strategy is intraday or positional etc.
Chose only that strategy that matches your trading style. If you don’t want to spend too much money on commissions, don’t pick the strategy that does scalping. And if you are not comfortable with overnight risks, then don’t pick positional strategies. The strategy description also shows the minimum capital requirement for each strategy which also can be a deciding factor for you.
Lastly, if the description is missing for a strategy OR if it doesn’t reveal much information, then it’s better to avoid such strategies.
Also Read: How to create a strategy in Tradetron? Step by Step tutorial
Support from Strategy Creator
A strategy creator is the one who has developed the strategy in Tradetron and listed it in the marketplace. It’s very important that the creator should be accessible over different communication channels. The reason being, if you face any errors during strategy execution OR if you need any clarification over the strategy logic, there should be someone to help you out
So before subscribing to any strategy try reaching out to the strategy creator and see if you are getting a timely response. There is an “Email” option on the strategy page itself to contact the creator.
Alternatively, most of the strategy creators have their dedicated telegram groups. Look for the group link in the strategy description and join it. After joining the group, follow the conversations happening in the group and you’ll easily come to know the general sentiment about the strategy from other traders.
Strategy Creator’s Skin in the Game
We have seen two kinds of strategy creators in Tradetron – one who lists numerous strategies and flaunts on paper trading results from time to time, and the second who have just listed a few strategies and trade with their own capital on all those strategies.
Any day you should prefer the latter because such creators have their own skin in the game. Atleast they have the confidence to risk their own money on the strategies.
See below screenshot from one such creator “FirstChoice Investments Consultant”, who maintains a private WhatsApp group and sends the live performance report (on 1x) for all their strategies on a daily basis.
You should look for such creators over the ones who send only paper trading results. Paper trading in Tradetron is never indicative of the real strategy performance.
Strategy Fee
The paid strategies in Tradetron either have a fixed monthly fee or a profit-sharing model. Ideally, it’s better to pick the ones with a fixed monthly fee but you won’t find many good strategies with that option.
For the profit-sharing ones, don’t subscribe to strategies that have 20% or more monthly profit sharing. If you do so, you’ll be left with peanuts after commissions, taxes, and fees.
Paper Trade for atleast 1 Month
Last but not the least, the best way to get comfortable with the strategy is through paper trading. Even if you find a silver bullet strategy that is meeting all the above criteria, you should still paper trade for atleast 1 month to assess the strategy further.
Just be mindful that paper trading performance might differ from live trading performance. Don’t get hasty to deploy even if you see good results in paper trade for a week or so, wait for the full month to make a decision on live deployment.
Those were the important parameters to find the best strategies from the Tradetron marketplace. We hope it was helpful. If you think there are any other things that should be looked at, please feel free to put them in the comments section.
Tradetron plans start at 250 per month. Sign up today from this link.