I'm working on something new.

Something I know nothing about, but it plays to my strengths.

I'll be documenting the journey of learning, practicing, and executing the idea.

Welcome to deep year, where I go deep into a niche and capitalize on it.

Year 1: Algorithmic trading

Some of you might know me as an Indiehacker. Some might know me as an SEO. Some might know me as a writer.

The truth is, I'm all of the above. My ultimate goal is to become a polymath. Someone who can exploit in any arena.

Now, why algorithmic trading? Here's why

Algorithmic trading is different from speculative trading.

You don't time the market, you develop and test investment systems that buy/sell in the market for you.

This is great for me, because I know absolutely nothing about traditional investing. Frankly, it's not interesting.

But, developing algorithms, automated systems, and investment strategies that work for me while I sleep (crypto markets, that is) is appealing to me.

Most investors don't know how to code.

Those that do, most of them don't know how to make automated cloud investment systems.

I've been consuming several books, podcasts, and other resources related to algorithmic investing, and from what I found there's a huge gap missing.

Many of the top algorithmic investors manually generate their own systems.

That's unfortunate. Computers are much better at that.

I'm not talking about AI or ML, but algorithmically exhausting investment strategies that can be tested and deployed.

I could do AI or ML, but I want simple systems that I can explain, and use to help other people do the same.

Now, here's what I have learned so far:

Algorithmic investing is all about testing. If you don't test well, your algorithms will not perform as expected.

So, the majority of my initial learning will be learning how to properly evaluate tests on the algorithms.

One method of doing this is called backtesting.

Simply, you take a certain amount of data (a few years) and you apply the algorithm to see how it performs in the end.

This is a great way to test, but not the best way. Here's what's next:

Walkforward backtesting.

Instead of just running the test on all of the years of data, you build a model that works for a subset of the data and apply it to recent data to see how it performs in the market "today".

That's better, but it's not the best. Here's what's next:

Live testing.

After having made winning backtest strategies, you now simulate those strategies into live data that's coming in realtime.

You simulate trades, so you're able to see how the algorithm would have performed if you had real skin in the game.

Then and only then do you deploy a live strategy to the market.

And what's better than cloud functions to do that? There's APIs for data, there's APIs for investing, I can build out my systems pretty easily.

Most algorithmic traders rely on existing automated platforms.

That's fine, but I don't want to be at the mercy of those systems. I want the raw data, and raw transaction.

Now, why am I doing this? What's the end goal?

I'm naturally curious, so I like to have side projects to work on.

But, the answer is two-fold. I want to have investments in place so my wealth can grow,

and I want to see if I can develop some helpful tools/resources for other investors and generate more income.

I could easily make a course (if I have success) outlining my strategies.

I could easily make my own SaaS automated investment platform.

I could easily just make it work for myself and make money using my systems.

Win. Win. Win.

The win win win is the goal. I'm confident with a solid year of building this skill I can develop the competence to provide value for others, while building wealth for myself.

That's the goal of the deep year. Build value. Value for others. Value for myself.

What does this mean for Closet Tools? Not much, really, this algorithmic investing path is a side-project. I'll be moonlighting it.

Similar to how I built Closet Tools, I'll be working on it for the first few hours of every day before I get back to my "day job".

The goal is to go deep for a year, writing content and building an audience, and then deploying that audience against the valuable things I create with my new knowledge and skills. https://twitter.com/jdnoc/status/1288077680596922369

I'll be updating this thread as I find out more information, practice my skills, and make valuable things.

Thanks for tuning in!