How My Stop-Loss Mistake on the Crypto Exchange Cost Me
How did it all start? I felt very smart when I decided to write my own trading agent in the crypto markets. I took a language model and had it interpret market data to make buy, sell or wait decisions. Everything was going very well at first. My Python code was working, pulling stock market data and sending orders based on the decisions made by the model. In the first version, I lost money…
A cryptocurrency trader wrote a custom trading bot that initially performed well but ultimately failed due to a flaw in its stop-loss mechanism. The bot's code controlled the stop-loss, which became ineffective when the computer running the bot restarted during a market downturn, resulting in significant losses. The trader learned that relying solely on software for critical trading decisions is risky and switched to using the exchange's own order book to set stop-loss orders.
This change ensured that the stop-loss remains active even if the trader's computer or software fails. The trader also added features like trailing stop-loss and improved the system's efficiency and safety.
Written by urgent.news from Dev.to's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
