We started our Manual trading in Crypto currency and learned many hard lessons in 2017. It is very complex industry to average prices in losses and win profit. This market is completely driven by News, Sentiments, Speculation and no intrinsic value of Project or Coins. Everything in this market was sketchy, driven by raw whitepapers and exchange listings.
We ported our entire Trading Strategy in July 2017 to Bitfinex with available APIs. Integration was smooth and technology was very fast to implement. Our strategies was very simple. When Market is falling certain %, we will start Long Position. When Market is rising certain %, we will start Shorting Position. We will Avg Out prices. Book profit in small fraction as well as permissible maximum limit.
"Simple & straight forward strategies. No big Gyan"
Now power of News and Sentiment: We started noticing Short position doing loss to us. Or Short position was open for more time then usual from Sept 2017. It was strange for us. Margin position was behaving very strangely with Short Position. Market started behaving with hockey stick Up from Sept Month. Best key learning from EOS Coin movement: 0.51 US to 1.4 US$ in 4 Days. We made software to manage risk by +/- 60%. But it was much large scale hit to our software. How can something move so fast? Our technology and margin was not ready to handle it. We started researching on internet and started finding out news and blogs. Brock Pierce Video on Internet and EOS Dawn 1.1 release paved price rise like crazy. We learned hard way: News and Launch of Update has huge price difference in Crypto :
"No Short in this Market." In Long Position Coin can go maximum -100%. We need Margin to keep on Buying and Average Price. Keeping -60 to -70% as bench mark. But in Short we can't manage +100% or +1000% in 3 Days"
Started Investing in Coin Project and Keeping them in Margin Wallet: It was great time due to market conditions. We identified few projects like IOTA, EOS, ETH etc and started buying Coins from Profit of Software. We use to convert Profit to Coins and keep them in Margin Wallet. As we manage our Client Account by API Integration and having 50% Profit sharing. It look as Good strategy. When Market/Coin prices fall our software took Long Positions and sold them in USD Profit. Then take those USD from Margin Wallet to Exchange Wallet and buy Coins. Now transfer those Coins from Exchange Wallet to Margin Wallet.
Perfect Strategy: "Answer NO. It is only good when Market is rising.". On 22 Dec 2017: Real big day for all Bots and Manual traders. When EOSUSD was crashed and we have 70% of our Margin Wallet Amount in EOS Coins. We had Double effect of Destruction. First Margin was reduced as well as EOS was Long in Margin Trading. We escaped Liquidation by small margins. Eg. EOS was 10.6 USD and we have 1000 USD. Then Bot started with Margin Balance of 10600 and took 1/10 Position as first Long on Any coin which fell X %. But EOS was falling as well as our Margin was shrinking at 3x Effect. God we escaped Liquidation by Small Margins. That day we learned 3 Important Lessons.
First Lesson: "Keeping Alt-Coins in Margin Wallet is Time Bomb. It has magnifying effect on Margins."
Second Lesson: "When Prices Fall you need USD to buy Coins at Cheaper Rate. USD becomes highly expensive on that day. It is fight of Cheap vs Expensive Commodities."
Third Lesson: "In Crypto we have to build and invest in Ideas and Technology rather then only focusing on Trading Tech." This Market is not mature enough to hold value if Use cases don't evolve. We started exploring Wallets and pay per use Models with Crypto. We will share that in last.
Jan and Feb expansion of our Knowledge and discussion with Manual Traders: We kept our accounts in BTC and USD and auto traded with it. We adopted conservative strategies. Returns have dropped significantly. We converted system to be more safe from -70% type of falls. Handled various bad news coming from Currency, Regulators, Countries and Market. We learned that small traders are leaving market and market volumes are shirking significantly. It become more game of large traders and bots. Position, which use to generally close in 3 Hours with Profit now takes more then 3 days to close with Profit. We never implemented Short strategy. Keeping Formula of -100% in mind and no greed factor. We sticked to our previous leanings. Major falls made software better in execution but something was missing. We learned something Unique on 6 Feb 2018 Fall. We have seen our Marging Wallet Balance from X Amount to X/3 and back to X almost 3 times in 2 Month. It was very surprising. We started working on understanding Underlining Assets and managing it with Automated Code. Auto Coversion of BTC to USD and USD to BTC parallel to Margin Trading on that account.
"Margin Wallet Balance was X Amount reduced to X/3 Amount and back X Amount almost 3 times in 2 Month. If we would have kept on Booking Profits. It is good strategy."
"US$ is Underlining Asset in Margin Wallet Balance. If 10% of Underlining Asset value crashes we have Problem in all Formulas."
Underlining Asset Management with Margin Wallet: Start all your Account with USD in Margin Wallet. As BTC Prices fall. Start purchasing BTC. When BTC prices start rising above your avg price then start selling and convert them back to USD. It is simple game of USD to BTC and BTC back to USD in Profit. It will not have deep impact on Margin Wallet Balance. We created complete sheet to calculate USD Position, BTC buying % and Margin balance movement. We learned few things from this process.
"When you keep Margin Wallet with USD. you bet against Crypto. You have missed Bitcoin Price increase benefits. Sometime it is exponential also."
"When you keep Margin Wallet with BTC. you have Crypto benefits but reduce in margin wallet balance significantly. Almost 3x per 1%. "
March is still teaching us: BTC pair with Alt-Coins is not rising at all. We are sitting with ZCash position for more then 20 days. It is not improving due USD polarization happening in Bitcoin. Our USD pair Trading in March made more then 35% Profit. It is combination of Asset Management and Margins Trading. Still we have long way to learn in this universe of Auto Trading. It is still wild-wild west of Fin-Tech.
"BTC pair in Alt-Coin is chocked from last 20 Days. BTC is gaining value but Alt-Pairs are losing infront of BTC. Trading with Alt-USD Pair made 35% in March month."
Resolution on 5 Jan 2018 after major shock: 3 Core Products
bitPredict.io : Improvement in Algorithms and understanding of Market. We want to be stable with 5~7% monthly returns. We manage Risk and Trading without taking Bitcoin/USD in our Account. We manage clients Account with APIs only.
autoPredict.io : Bot for small traders to write own rules in Crypto Exchange. Bot will run 24*7 and taking Trading Calls based on Trading rules. We will manage Trading App, Bot and Servers. It will bring liquidity to market and trust to small traders.
Pay per Use in Crypto : We made first Demo model for Perfume Bottle. It is Pay per Spray. We used Ripple (XRP) as Payment Solution. It is smooth and 0.5 Second Transaction Time. We would be integrating IOTA, Bitcoin Cash, XRP and EOS Coin in it. It will be new revolution in Crypto Wallets and Users.
Demo Perfume Bottle with Pay per Spray in XRP:
We are looking forward to discuss with Investors, Innovators, Technologist, Students or anyone who can think beyond Prices and Profit. Our idea is simple: If you trust in Crypto then Build something which will have everlasting impact on Ownership, Finance and Community.
Last word of wisdom from my Co-founder
"Buy and Pray will not increase prices. Invest in companies, coins and ideas in Crypto. if you believe in this technology then build or invest." - Niket Mangal, Co-Founder of bitPredict.io
Twitter: @vkhutal or Email us for any Query : [email protected]
