Its a futures strategy hence the short strategy
Recreated bots for you
Addressing Ares point about high leverage being high risk,
This is a common mistake people who dont run futures make about it.
Its not an opinion its simple maths
Say you have a 1k position and have 1k capital
In its simplest way
At 20x leverage, margin used is 50$ (950$ borrowed from exchange) and free capital 950$
At 5x leverage, margin used is 200$ (800$ borrowed from exchange) and free capital 800$
The free capital is used as Margin for other positions or to cover drawdown of all positions
What matters is not 5x 20x or 100x but the max position values and drawdown expectations at the covered range
More leverage is friend for DCA.
Another great point i knew very late is funding fee for borrowing is charged by position value not leverage value
So someone with 1k position and 5x leverage pays same funding fee as me with 1k position and 20x leverage.
Anyways,
The risk occurs when people use high leverage and dont keep in mind the position size and drawdowns at bottom of the range.
Now coming to some drawbacks of combo bots.
- Say you are -40% or +100% from base order
Even with the 5% TP i tested closing all orders on exchange is taking 10-30 secs
During this time slippage has eaten int other gains.
Sometimes more sometimes less. - Combo bots keeps you in a deal for longer than dca bots. Meaning while dca bot closed deal on a sharp spike combo bot wont. Hence deals run longer and the coverage you need is more than usual DCA.
Hopefully that helps