I want some advice on how to optimize my setup for better performance. I have been experimenting with a few strategies on Gainium but I am unsure how to fine tune the parameters for consistent results.
What indicators or metrics do you prioritize when configuring your bot for crypto trading?
How do you balance between risk and reward in your strategy?
Are there any suggestion tools or backtesting methods that you use to evaluate the effectiveness of your strategy before deploying it live??
Hello Nathan, perhaps one of the things you should pay the most attention to when optimizing your Bot is to ensure that it loses as little as possible. But being careful not to over-optimize it, for example if you test your bot and fine-tune it in a backtest between 2022 and 2024, it may be that when you test it so far this year its performance will not be good and vice versa.
It is important that you can survive with the money allocated.
A good way to test your strategy is to take periods of 6 months and see if it wins in most of the tests without the drowdown being too big, if it is too big it will take longer to recover and it will discorage you to then discover the bot works well.
After the backtest put a bot to run in paper money (no real money yet)
after a few weeks o months y if you feel the bot is working as expected after your corrections, can do a real money test starting in the best condition you can find
This table that I leave you may help you see where your Bot must be is in relation to profit. I hope this helps! (ignore the red circle)
Completely agree with @diegopiolo, risk is the single most important factor of any trading strategy. Most people optimize their strategies for more profit, and is no coincidence that most traders lose money.
To be profitable over the long term, you need to take as little risk as possible. A good metric to watch is the sortino ratio, try to get it as high as possible.
I recommend reading Folled by Randomness by Nassim Kaleb. That book explain very well why in a professional with such a high amount of unknowns (randomness), optimizing for risk redudtion (avoiding the negative consequences of black swan events) is the single most important thing you can do in your trading.
We have to remember that both backtesting and paper trading are simulations that both should give almost identical results, if not any random parameter was configured, for the same timeframe. And both use best case conditions where all orders are executed directly at the expected price without any real world issues. That is, maybe we don’t really need paper trading.
Please don’t feel discouraged, optimization depends on your personal goals, in trading if you want more profits you have to expose yourself to greater risk. But if you want consistent steady profit there are many strategies on gainium, and if you have created a strategy and you wanna optimize it then please share it with community maybe someone will optimize it for you.
