Most ordinary people think that they can’t sell without making a loss when the price is lower than what they paid when they bought their coins, but that is a complete misunderstanding.
First, we need to establish some facts:
Memecoins and serious Alt-coins are two completely different things since memecoins doesn’t have a technical foundation and can disappear at a blink of an eye. This text does not apply to memecoins.
Every owner of Bitcoin and Alt-coins believes their coins will increase in value in the long perspective.
The profit with buy-and-hold is something we ordinary people can’t affect in any other way than cashing out at the right time.
Bot profit is completely depending on your skill and performance.
Every single crypto owner will sooner or later find himself in a situation where the coins have a much lower value than when they were bought and when the price is rushing up it doesn’t make you any richer, until the price is back at the original level. This is a frustrating, and completely unnecessary, wait because if the funds were traded to a stable coin and bought back by a bot that traded during the coming bull period and reinvested the profit you will make a “bot-profit” during the time you otherwise just would have been waiting. The temporary loss in value is not to be considered a loss at all (as long as you don’t cash out) but instead only as a loan that will pay itself back when the price goes up again.
I have a well-tested “Bull-bot” that sells on each top that is higher than the last one and buys back when the price turs up after the downturn following the top where it did sell. (I can publish the strategy if I’m asked.) This is a “no loss bot” which makes it wait if the price goes down after it has bought and sell when the price has gone up a set percentage above the buying price. If the price goes down in steps this might put you in a position like described above, with a current price lower than the buying price. Here you have a choice, either wait until the price goes up higher that your buying price or sell all the coins and restart the bot (click: stop/sell at market/start).
This will fool Gainium to think that the bot did a loss but that is only the temporary reduction in market value that will restore itself when the price goes up again. Selling and buying back at the same time/price (with my bot even buying back cheaper) is not a loss since you will have the same number of coins before and after and the only cost was the trading fee.
Doing it this way the bot will be able to trade during the price period between the reset and the earlier bot-sell twice. First on the way up to the downturn and secondly on the way up from the reset. What traditionally is seen as a loss turned out to be a double profit.
If we all ask @Ares.Sanches he might give Gainium the possibility to separate P/L caused market conditions and bot activities.
I’m sure that you are much better than I am on things like this but let me try to get you going. What about:
The sum of all (sell price - buy price)/sell price during the time period would give the bot profit and the Market profit would be the price at the end of the time period minus the price at the beginning of the same time period.
Would this not give us the final argument to make the HODLers understand that they are on the wrong train?
I’m sorry. I might have answered the wrong question.
This is the theory behind the bot:
Let us say that you start with 10 coins at a value of $5 each = $50.
The bot sells all 10 coins at a 2% higher price and makes 1 coin in profit.
The bot reinvests the now 11 coins at a lower price and sells them with 1 coin in profit at a 2% higher price.
The bot reinvests the now 12 coins at a lower price and sells them with 1 coin in profit at a 2% higher price.
The bot reinvests the now 13 coins at a lower price and sells them with 1 coin in profit at a 2% higher price and so on until the top of the price graph when it has 17 coins for at total $10 each.
The price of the coin falls and the bot sells all 17 coins for $5 each and buys 17 new coins for $5 each at the bottom of the curve just to give the bot a new starting value = stop waiting for a much higher price level.
Now the climb starts again, and the bot sells the 17 coins at a 2% higher price and makes 1 coin in profit.
The bot reinvests the now 18 coins at a lower price and sells them with 1 coin in profit at a 2% higher price.
The bot reinvests the now 19 coins at a lower price and sells them with 1 coin in profit at a 2% higher price and so on until the top of the price graph when it has 17 coins for a total $10 each.
Buy-and-hold would have given a total value of 17 coins at a value of $10 each = $170 total while this bot would have left you with 23 coins of $10 each = $230.
I find the most profitable way to deal with red bags is to set up a recovery grid up to the bottom of the DCA/Combo bot break even level. I typically have to turn off the main DCA/Combo bot as I’m at my bot limit on 13 (or is it 15?) without going up a subscription level.
It’s just a way to get the bot started trading again instead of just waiting (doing nothing) for the price to go up. The so called “loss” in value is of no interest since it will correct itself when the price goes up. If you don’t believe the value of the coin will go up again then you have chosen the wrong coin (or are in the wrong business).
I’m not going to buy more coins. Increasing the number of coins is the bot’s work. It doesn’t matter how much the price goes down as long as it still exists, and I don’t expect high-rated blue coins to disappear.
Correct, a sale would have been necessary at the top.
Also the drawings on the chart also appear to be somewhat inaccurate. Firstly in relation to the number of coins, as I have already mentioned. Notice, as the price rises there won’t be more coins at all. Only the value of the existing coins increases.
And secondly, we can of course draw upward lines every 2% on a chart. But these lines are evenly spaced, but should spread out geometrically as the price rises. And how do we decide when a price drop will recover and when it won’t?
Visually it’s a start, but then we have to do some maths to see if the ideas are right. And in this case the math tells us, that it won’t work like the chart suggests.
The chart is just to show the principle. The real math is much more complicated (and much more profitable). I have run this kind of bots for weeks and they work very good during the bull periods. I’m running a test with 12 paper bots to get proof of how automated resets through trailing StopLoss would work but since the prices still are down we will have to wait for the prices to go up to get a definite result.
Yes, of course I know the math but this was just to show the principal without blindsiding people into a mathematical dream world. If you really have done the math you understand what I’m saying, but let us leave the mathematical details for now.
The top questions have already been addressed and the answer to the last one is “technical indicators”. Crossing MAs determines both buying and selling and both take place soon after the trend has changed.
I am afraid that neither the description nor the chart are clear enough to explain the strategy.
And by the way
A loss is a loss is a loss. If we use safety orders and keep the deal open because of those and also the price moves against the deal’s direction, we always increase the unrealized loss that our safety order has to recover later. If we instead use a stop loss and sell below the deal’s average price, of course we even realize a loss. But that hasn’t to be the end of the deals as my generalised trading bots approach shows. It takes a loss to prevent more losses and tries to recover that with the next order similar to a safety order.
Yes, that is the traditional way to see it but to me, the price of the coin has absolutely no value whatsoever…until the second I cash out. The only important thing is the number of coins I own. What is happening with the $-value between the start and the second before I cash out is of no interest to me. Cose a high-rated coin and try this approach and will sleep better at night. A business life starts when you make the initial investment and stops when you retire for good. What’s in between is just business.
I would love if @aressanch would develop functions in Gainium that focus on coins instead of on fluctuating values. What my coins were worth today is of no interest when I cashout in 9 months.
I have been running bots like this for weeks so I know what works and discussions like this are just a waste of my time.
It’s fine if you prefer to ignore the value of your portfolio, if that’s what you want to do. But there’s no need to bully those with another point of view. Feel free to explain your bot configuration in detail, or even share the configuration files. Then we can dive in and learn together.
Well thank you, but I believe it is you who tries to press your opinion on me from your high horse.
I know perfectly well what the tradition says and I know my opinion doesn’t follow the tradition so I believe it is you who need to open your mind if you are interested in a different point of view.
I don’t ignore the value of my portfolio but I don’t see the value in focusing on a monetary value that is obsolete already when I read it. The only real value of a portfolio has is the number of coins it contains times the price of the coins in the second you trade it and a decrease in value is not a loss until you cash out.
If you were a metal trader and sold a silver bar valued at $1000 to a guy for $100, for which he would let you buy his gold bar of the same size as your silver bar, would you then have made a loss?
Personally, I believe you would have made a very good deal. So if I sell my crypto that once upon a time was valued at $1000 for $500 to get an opportunity to make $2000, would that be considered a loss? We don’t know that, do we? Not until we know if the opportunity brought in the $2000 (or maybe more if you are good at what you are doing).
Summary: I didn’t start this thread to be taught mathematics, brag, or ask you about my bot. I wrote to @aressanch to hear if there was a possibility of separating bot-profit from market-profit in Gainium reports (for which I have still not received an answer).
It would be best to post it as a feature request so others can vote. And include a specific example of how it would work so I can understand the concept better.
In your previous example you said “the bot reinvest the coins”. I’m not sure what that means, I’m guessing selling them high and buying them back when they are lower? That’s what I’m doing with most of the coins I’m holding, but I don’t see the need for having a different calculation than what we currently have. I understand that when the value of my portfolio goes down my bots are buying cheaper, and I may be holding unrealized losses until the value goes up. Having unrealized loss is part of the plan, without volatility there isn’t money to be made.
I think that calculating profits in anything else than fiat is not going to be so straightforward. Maybe you’re accumulating Ada and someone else is accumulating eth, but what happens to the trades that are not related to Ada or eth? We need a common denominator and for better or worse fiat is the best one we have.
To turn 10 coins à $5 into 17 coins, we have to e.g. go 27 times from $5 to $5.1 and if the price drops to $5 another time we could buy 17 coins worth a total of around $85. If we then keep those during a dump from $5 to $4 and close the deal now, we still can re-buy 17 coins for $4 worth $68 in total but we have realized a loss of $17 with the last deal. Of course, we can start our journey from there again, but the loss is there and has to be presented in the stats.
