Algo trading with Algotechs, my experience and full story.

I still can remember that Sunday as if it was yesterday, the 19th of November of 2017, the day when it all started… Feeling ready to get into the “algosphere”, I took my debit card out of my wallet, filled in the online form with excitement and clicked on the “deposit now” button. My first 500€ were on the way! That was the beginning of a sinusoidal journey towards a 45K € loss…

At that point I was still rational, I had in my mind that I would just gamble the minimum investment, and learn how algotrading works in Forex, how the banks and big financial institutions make money, and how they fool most day traders. I am a curious person and always want to know the why’s of things that interest me. I had previously traded manually using Trading 212 and realised that I was competing against robots and manipulated markets controlled by the big boys. So, yeah, 500€ for the chance of learning a “secret”? Why not?

During that time, I was working as a general operator, taking care of simple manual labour tasks as assembling or sheet metal forming, while I waited for my well-deserved promotion to CAD engineer. I had some periods of frustration, which I calmed down by eating delicious Sainsbury’s chocolate biscuits after work or scaping to other countries during my holidays with friends or girlfriend. I dreamed big, I wanted financial freedom, travel the world, visit the most astonishing places, taste all types of different cuisines and learn from the habits of other cultures.

How did I find out about Algotechs?

The truth is that I didn’t find Algotechs, but Algotechs found me. How? Cookies is the answer. The web knew about my interest in Forex trading, displaying related adverts of “how to make money quick” on the main social media streams, YouTube and my frequently visited websites. None of them caught really my attention, they all seemed fake and obvious that it wasn’t for real. Until I first saw Algotechs advertised on Facebook. I fell completely amazed by the idea of algorithmic trading. As a mechanical engineer, I strongly believed that there was a numerical pattern for absolutely everything and trading the markets couldn’t be an exception. After all, that was what professors had been showing me during my studies, day after day.

At that point, I did some research about algotrading and Algotechs, but I couldn’t find much information about the company, rather than a few – at that time – positive reviews. It seemed to be a new innovative initiative, which handed the big boys’ tools over to retail investors, giving the chance to play in the Premier Ligue with options of making “top money”, and there wasn’t much written about that…

Algo trading History

Source: Wikipedia

“The concept of automated trading system was first introduced by Richard Donchian in 1949 when he used a set of rules to buy and sell the funds. Then, in the 1980s, the concept of rule based trading became more popular when famous traders like John Henry began to use such strategies. In the mid 1990s, some models were available for purchase. Also, improvements in technology increased the accessibility for retail investors. Early form of Automated Trading System, software based on algorithm, has been used by financial managers and brokers. These kinds of software were used to automatically manage clients’ portfolios. However, first service to free market without any supervision was first launched in 2008 which was Betterment by Jon Stein. Since then, this system has been improving with the development in the IT industry. Now, Automated Trading System is managing huge assets all around the globe. In 2014, more than 75 per cent of the stock shares traded on United States exchanges (including the New York Stock Exchange and NASDAQ) originated from automated trading system orders.”

So, as it seems algotrading is taking a higher stake on the global markets over time, which at the end makes you think that trading is all about a robot competition. Ever guessed why 90% of day traders lose money? Robots are emotionless and need no sleep, they are the winners. As I could experience though, even a long term proved algotrading strategy is still extremely risky on the trading league, as the Forex market will behave differently and follow different rules sooner or later.  

Ever wonder why the market volatility has increased so much over the last decade? Is it perhaps because we are heading to a robot competition era?

I do have a lot of unanswered questions regarding algotrading, but as much as I try to widen my researches, I can’t find reliable answers. Why is it not transparently displayed? Who doesn’t want us to know much about it? Who are the big market manipulators? No idea, if you do, please let me know.

Up to this point, I consider any further research a waste of my time, as it’s proven that this strategy won’t make me a millionaire anyway.

My algo beginning

“Your deposit has been transferred successfully”, I am in. The next step was to validate my account, uploading a copy of my ID, proof of address and debit card. Once approved I was all good to go.

Algotechs ATS software runs on the Meta Trader 4 (MT4) trading platform, so I had to download it and log into my trading account, where all trades would be made for me.

MT4 is a popular platform among Forex traders, as it’s EA compatible, allowing you to develop and use your own algotrading software or buying another one instead.

MyFxBook tracks some of these purchasable robots and shows its performance online. On there, you can compare, ask questions and discuss with others about any robot you may like.

ATS Algotechs software was also tracked by MyFXBook with track records and trading privileges verified, which means that MyFxBook was connected to Algotechs broker (bealgo), ensuring that the trades were real.

Right, the “reality” game was about to begin!

First trades

The minimum investment was 2000€, so 1500€ were added to my trading account as a promo offer. For the next four weeks, I watched how the algorithm opened and closed trades profiting consistently before depositing the remaining 1500€, transferred by debit card.

algotechs first trades one million journey bealgo

Look at that, such a tiny little innocent harmless things, aren’t they cute?

Little I knew at that time that these tiny little things would transform into a monstrous dangerous predator.

Switching mode: Emotionality takes over rationality

That bl**dy software is fu**ing brilliant! My big dreams can be made real in no time! My and my girlfriend funding our world travelling expenses thanks to a bunch of sequential algorithms! Why didn’t I know about that before?! Is that how the” mafia” finances their boats and expensive wines?!

These were some of my initial thoughts after seeing my account speeding like a rocket. All my rational “cleverness” was gone, I was completely emotionally dragged, lived in an imaginary bubble that would lead me to make the biggest financial mistake of my life…

Transferring a lump sum from my checking/savings accounts

My mum and I had been cumulating cash from our Industrial Warehouse rental income and some inherited money, which was sitting in a savings and checking accounts, earning a little over of 0.75% of interest. Guess what I did? Transfer a big stake of this cash to Bealgo while imagining myself laying down on the beach drinking a lovely mojito cocktail.

I know what you are thinking: “you were such a fool” – true, no further comments.

So, I deposited a total of 47K € to their main bank provider Københavns Andelskasse in several goes. My goal was to wait until my trading account would surpass the 100K€ landmark, in order to reduce the success fees. I knew it was risky, but GOD man I wanted it so badly! My Spanish bank raised a red flag to me, which I ignored as I thought it was only a strategy to keep the funds in (for new readers: Banks and I are not friends).

Soon after I found out that the red flag wasn’t bollocks at all…

 The Danish government’s company for failed banks, Finansiel Stabilitet, assumed control over Københavns Andelskasse, or Copenhagen Cooperative Bank after it was notified by Denmark’s Financial Supervisory Authority that it had made significant breaches to anti-money laundering regulations and was likely to fail. Funds blocked.

Ouch!!!!!!

After that I panicked, my vision dreams vanished as I entered a recession zone and get completely lost into it. I wasn’t told much from Algotechs or Bealgo, rather than being patient until their agents resolve the issue. I requested a withdraw but only those funds transferred by debit card were given back to me, 3000€. The rest was apparently blocked.

Waiting, waiting, waiting and more waiting… Until in February, someone tweeted somewhere that their agents were very close to reaching a solution and customer funds would be unblocked soon. I tested 2000€ and funds were in my Spanish account the very next day. Hooray! I told them that from now on my plan was to withdraw at least 2000€ per month. Curiously, soon after my account dropped like a brick, as I showed on my Portfolio Update #4 March 2019.

I can’t confirm whether that was just a coincidence or it’s just an ATS mistake, but what I can confirm is that this is NOT the way to the richest.

Great losses are great lessons

Many times what we perceive as an error or failure is actually a gift. And eventually we find that lessons learned from that discouraging experience prove to be of great worth.

― Richelle E. Goodrich, Smile Anyway

After this experience, I’ve learnt a few big lessons, a lesson that probably most of my readers already knew about it, lessons that may work out for me but won’t for you. We are all different and my lessons and your lessons may differ.

My two big lesson:

  1. Dream big sensibly.
  2. Invest rationally and not emotionally.

Other lessons learned:

  1. Focus on the Warren Buffet rule number 1: Don’t lose money
  2. Do my own due diligence before investing a big lump sum of money with any new financial service. If I can’t understand it, I won’t invest.
  3. Test withdrawals several times before investing a big lump sum of money.
  4. Preferably invest with financial services regulated by the FCA or any other mayor and liable regulation.
  5. Don’t trust online reviews – some of them are bought and fake.
  6. Be careful with account or financial managers, their goal is to improve their commission, not mine.
  7. Reread the chapter number 8 from the Intelligent Investor occasionally.

As a general conclusion, I have learnt that increasing wealth takes a long time and discipline, and short-cutting isn’t the way to follow during my journey. Dreaming too big was the personal reason that led me to short-cutting, thus the importance of keeping my mind rational from now on during my future investing decisions.

I hope you enjoyed reading my algo trading experience with Algotechs and have learnt something new from it. If you have any questions or think I have missed some points, don’t hesitate to let me know down below the comments.

Thanks for reading