This one is all my fault…or mostly. When I got my new Dalio bot last month, I did not know how to complete all of the settings. My thoughts were, “If the bot isn’t running, it can’t make money.” In that spirit, I failed to understand a wrinkle in the lot settings.

The first trade of this series was 0.81. After realizing my error with the lot settings, I could have canceled the trade. I could have eaten the loss as a cruel reminder of the pitfalls of rushing to get a new bot online. But, I didn’t do that. I reduced the auto lot size. The next lot purchased would be smaller than the previous one. My thoughts were, “It will work itself out.” With the level of drawdown Dalio is in right now, I should have went with plan A.

The recommendations on this bot are to choose 15% as the, “close all trades” point. Wisely, I have raised the “Basket StopLoss” point to well above that. With fingers-crossed and a few prayers uttered, I am trusting the bot will work its way out of this one. 🤞 What have I learned? (I can’t afford too many more expensive lessons!)

1. Getting the bot up quickly may bring short term gain, but be careful of the chaos you may be sowing. I am blaming this on a form of greed. I don’t like learning this about myself.
2. In light of my gold issues earlier in the week and this drawdown issue, I am attempting to view drawdown differently. If you trust the bots, then they should have enough room to work. If the “close all trades” point is set too low, you will lose some money. But, if it set just a little too low, you will lose money you could have made. The barrier to making this money was settings that were too conservative. So, since I am an algo investor, I need to act like it.

#2 above is hard to abide by. On both of the losses I suffered from the Precision and Aviator bot, it was a MAX DRAWDOWN issue. Once it was reached, the bot folded up and retired until I gave it permission to work again. And, they were both a few dollars lighter. If I take the quick loss every time the drawdown gets ugly, I need to find another hobby. The algo bots can work. I just need to give them the necessary space.