Automated Trading Strategies: How to Actually Make Automation Work

I've been automating trades for 5 years.

The first 2 years? Mostly losses. Broken bots. Strategies that worked in backtests and failed live.

The last 3 years? Consistent profits. Not spectacular. But consistent.

What changed? My understanding of what automation actually is—and isn't.

What Automation Actually Does

Let me be clear about what trading automation does:

It executes your strategy consistently.

That's it. That's the whole thing.

Automation doesn't:

• Create an edge for you
• Make bad strategies good
• Eliminate the need for skill
• Generate passive income automatically

It does:

• Remove emotional interference
• Execute 24/7 without fatigue
• Follow rules exactly as defined
• Capture opportunities you'd miss

The edge has to come from you. Automation just executes it.

The Automation Spectrum

There's a spectrum of trading automation:

Level 1: Alerts

The system watches conditions and alerts you. You decide whether to trade.

Lowest automation. Highest human involvement.

Level 2: Conditional Orders

The system watches conditions and executes predefined orders when conditions are met.

This is what dashpull does. Medium automation. Human defines strategy, system executes.

Level 3: Full Algo

The system makes all decisions. Entry, exit, position sizing, everything.

Highest automation. Highest risk if something goes wrong.

I operate mostly at Level 2. Human judgment for strategy. Automated execution for consistency.

Why Full Automation Usually Fails

"But I want fully passive income!"

I get it. The dream is appealing. But here's why full automation usually fails:

Markets Change

A strategy optimized for trending markets fails in ranging markets. A strategy for low volatility fails in high volatility.

Full algos can't adapt. They keep doing what they were programmed to do, even when it stops working.

Edge Decay

Every edge decays over time. As more people discover a pattern, it gets arbitraged away.

Full algos don't know when their edge has decayed. They keep trading a dead strategy.

Black Swan Events

Flash crashes. Exchange outages. Unprecedented news events.

Full algos aren't programmed for these. They either freeze or do something catastrophically wrong.

Bugs and Errors

Code has bugs. APIs fail. Connections drop.

Without human oversight, a bug can drain your account before you notice.

The Right Way to Automate

Here's my framework for successful automation:

Step 1: Develop a Winning Strategy First

You can't automate what doesn't exist.

Before any automation, you need a strategy that works. Tested manually. Proven profitable.

Automation amplifies your strategy. If your strategy is bad, automation makes it worse faster.

Step 2: Define Specific Conditions

Vague strategies can't be automated.

"Buy when it looks like support" → Can't automate. "Buy when price is within 1% of the 20-day low and a bullish engulfing forms" → Can automate.

Every condition must be specific and measurable.

Step 3: Start with Conditional Orders

Don't jump to full algo. Start with conditional orders.

Define your entry conditions. Let dashpull watch and execute. You handle everything else.

This gives you automation benefits with human oversight.

Step 4: Monitor and Adjust

Automation is not "set and forget."

Review performance weekly. Are trades executing as expected? Is the strategy still working?

Adjust conditions when needed. Pause automation when market conditions change.

Step 5: Scale Gradually

Start with small positions. Verify everything works. Then scale.

I've seen people go all-in on a new automated strategy. It fails. They lose everything.

Start small. Prove it works. Then increase size.

My Automated Trading Setup

Here's my actual setup:

Strategy Layer

I have 3-4 strategies running at any time:

• Support/resistance bounces
• Trend pullbacks
• Funding rate fades
• Breakout pullbacks

Each strategy has specific conditions defined.

Execution Layer

dashpull handles execution. Conditions are set. When they're met, orders execute.

Entry orders, stop losses, and take profits are all predefined.

Monitoring Layer

I check daily:

• Did any orders execute?
• Are conditions still relevant?
• Any unusual market conditions?

Weekly, I review:

• Overall performance
• Win rate by strategy
• Any adjustments needed

Adjustment Layer

Monthly, I evaluate:

• Which strategies are working?
• Which need adjustment?
• Any new strategies to add?
• Any strategies to retire?

This is not passive. It's active management of automated systems.

Common Automation Mistakes

Mistake 1: Automating a Losing Strategy

"Maybe automation will make it work!"

No. Automation executes your strategy consistently. If your strategy loses, automation loses consistently.

Fix the strategy first. Then automate.

Mistake 2: No Kill Switch

What if something goes wrong? What if the market crashes? What if there's a bug?

You need a kill switch. A way to stop everything immediately.

I have maximum daily loss limits. If hit, all automation stops. No exceptions.

Mistake 3: Over-Optimization

"I'll just tweak these parameters to improve the backtest..."

Stop. You're curve fitting. The more you optimize, the worse live performance will be.

Simple, robust strategies beat optimized, fragile strategies.

Mistake 4: Set and Forget

"It's automated, so I don't need to check it."

Wrong. Markets change. Strategies decay. Bugs happen.

Check your automation regularly. Daily at minimum.

Mistake 5: Too Many Strategies

"I'll run 20 strategies for diversification!"

You can't monitor 20 strategies effectively. When something goes wrong, you won't catch it.

Start with 2-3 strategies. Master those. Then maybe add more.

The Realistic Expectations

Let me set realistic expectations:

Automated trading will:

• Execute your strategy consistently
• Remove emotional interference
• Capture opportunities 24/7
• Free up your time (somewhat)

Automated trading won't:

• Make you rich quickly
• Work without maintenance
• Eliminate the need for skill
• Generate truly passive income

The traders who succeed with automation are the ones who:

• Have a real edge to automate
• Monitor and adjust regularly
• Start small and scale gradually
• Treat it as a business, not a lottery ticket

The Bottom Line

Automated trading works. But not the way most people imagine.

It's not passive income. It's not set and forget. It's not a replacement for skill.

It's a tool that executes your strategy consistently, removing emotional interference and capturing opportunities around the clock.

dashpull is my automation tool. Conditional orders that execute my predefined strategies. Human oversight for the big picture. Automated execution for the details.

That's the balance that works. That's the automation that actually makes money.

Ready to automate your trading the right way? Try dashpull →