In this article I do not suggest blindly using the algorithm for your trading. It is intended for your understanding. Be careful if you decide to repeat)) So, the idea is really simple. Buy (always buy) at any market price (it is important to trade only limit orders to pay less commission). Next, if the entry price deviates from us by 0.1% (this is a configurable value for your risks and portfolio), we buy more, and then we buy more each time we deviate from average by 0.2-0.3%. If we do this with a minimum lot, then even if the market moves against us for a long time, our maximum position will be within 20-100 lots. At the same time, open a new position no more than once a minute. Next, we close/partly close the position while moving above the average by 0.3-0.5%. Such strategies are very dangerous on classic stock exchanges, since you need a very large capital, but it can be used on the crypto market. In my example, I used data from the Binance futures exchange, positions are similar on different tickers. You can have very large temporary drawdowns while the market is in the fall phase, and then the position closes in plus.
Below are some examples in pictures.
It is convenient to use this algorithm for market making. But if you interested in regular trading, it is enough to trade on the same principle, but need to buy a position every time +0.001% of the average. Thus, after 100 additional purchases. for example, your position on ETH will be 0.1 lot instead of 0.001. It’s not a lot of money and risk, but you will move away by 0.1% from the average, after 1000 additional purchases by 1% and the volume of ether will be only 1 full lot. After 10,000, you will move away by 10% from the average, and so on. Below is an example of how it looks in statistics.
Then it's a question of your risk, you can move away by 0.01% each time and buy the minimum lot, so there is less risk, but also less final result. Supposing that the market can go into a prolonged fall, after reducing the price by 20-50% (this is normal for crypts), you can leave the robot in a long position and launch new copies that will do the same at new prices, and the first robot will remain as a "Longterm investor" and freeze only 10 lots (for example)
I wish you all profits! Write comments and questions, I’m glad to communicate.
Submitted October 08, 2020 at 11:25AM by Saro_M_V