The “deal list” says different:
It says that all started with 16706 USDT and 1,8 SOL and ended with 16706 USDT and 25 SOL after 18 deals.
I have never been good at math but isn’t the increase from 1,8 - 25 more like 12 times or 1200%?
(Please, no irrelevant comments about trends or the test duration because this is a question about principles, not exact numbers.)
You are right from 1.8 SOL to 25 SOL you have an increase of 1200% of the amount of SOL, but not the net profit. It’s not a question of being good at math, you have to take into account all the amount with what you started trading:
Starting : 16706USDT + 1.8 SOL = 20000 $ (is probably not exactly this amount, is an example)
Ending : 16706 USDT + 25 SOL = 24000 $ (so 20% higher)
My reasoning is as follows:
I have invested all I can afford in crypto right now so if I can increase the number of coins invested without reducing my capital that will have an enormous value when the real bull-race comes.
I believe that what we have seen so far is just a humble start.
@Perez is correct, the net profit is calculated on the value of the funds used by the bot, not on the amount of tokens obtained. This is so we can compare different backtest with different settings.
Yes, I understand and respect that, but when using a bot to improve a long-term investment the number of base coins obtained might be even much more important than short time gains. Multiplying the wallet content 12x will eventually multiplying the monetary cash out with 12x too.
Add this to your toolbox and you will have grid-bots, trading-bots, and multiplying "buy-and-hold-bot*. Do observe that this bot doesn’t close negative deals so bears run by and bulls get multipied.
You already have the equity curve for that. You can see the value of the funds at the end of the backtest and that includes the increase of value of the bas when you profit in base.
Equity curves are probably fascinating but I don’t understand them.
How can an equity curve be higher than buy-and-hold when no trades have been done?
Here is a backtest from a bot that never made its first trade, and still the equity curve is remarkably higher than the buy-and-hold curve.
I can try to explain this but I don’t know if I am correct.
Equity curve represent the value of what you have in the account that you backtest, so in that case, if you have let’s say 1000$ USDT and 1000$ in SOL, the equity curve will fluctuate over time cause the value of SOL fluctuates even if you don’t trade.
The buy and hold curve is an hypothetic scenario where your 1000$ USDT and 1000$ SOL are all used to purchase SOL, so you have 2000$ SOL. In that case the curve will be different than the equity curve.
This specific example don’t apply exactly to the curve but it may help to explain why you obtain these 2 curves…
I believe that the Equity curve shows the value of the base amount available for the bot. and that the buy-and-hold curve shows the current value of the number of base coins the backtest started with.
