Building Your First Trading Bot: A Beginner's Blueprint

Trading Bots Handle Your Trades While You Sleep

A bot is just code that buys and sells according to rules you define. No magic. No machine learning required. If you can describe a trading strategy, you can code a bot.

The Simplest Bot (Day 1)

Strategy: Buy when RSI below 30, sell when RSI above 70.

Python pseudocode:

get current RSI
if RSI < 30:
    buy()
if RSI > 70:
    sell()
      

That's it. Loop every 5 minutes. Done.

Step-By-Step Build Process

Step 1: Define your strategy clearly
Write it down. Entry rule, exit rule, position size, stop loss. If you can't write it, you can't code it.

Step 2: Set up Alpaca account
Free paper trading account. No money needed to test.

Step 3: Install Alpaca SDK
pip install alpaca-trade-api

Step 4: Write the bot in Python
50-100 lines. Connect to API, check conditions, place orders.

Step 5: Paper trade for 2-4 weeks
Let it run on fake money. Measure win rate. Fix bugs.

Step 6: Trade live with 1% risk**
If it was profitable on paper, go live but small.