Our Latest crypto trading bot innovation
1. INTRODUCTION
Chances are, like me, you’re either an entrepreneur or at least have an entrepreneurial mindset. You understand that running a business is no walk in the park. It’s about learning from the challenges that come your way and moving forward, striving to do better today than yesterday. At Oxido Solutions, it’s no different.
When my business partner Jarno de Vries and I teamed up, we set out to develop an automated crypto trading bot setup capable of handling all market conditions—upward price action, downward price action, and sideways chop. In my opinion, we were lucky with the bull market in 2021, characterized by strong trends that were very favorable for a trend-following setup like ours. In the period that followed, we noticed the market becoming choppier, and our solution was our sideways filter. It can detect the strength of the trend. If the trend is weak, our setup will most likely not take a position. The sideways filter brought us closer to our goal of the ultimate trading setup but proved not to be enough.
2. TRAILING STOP LOSS
While we closed out 2023 with a solid profit, there were a couple of months, especially July and November, where our setup faced significant setbacks. These periods saw a lot of zigzag movements in the market, with prices surging only to plummet shortly after, or vice versa. Despite kicking off January 2024 with a strong start, boasting a 12% profit on our medium-risk and 19% on our high-risk trading strategies, there’s a chance that these zigzag patterns could emerge again this year, potentially impacting our profits.
However, we’ve since found a solution to this crypto trading bot problem in the form of an additional stop loss. The primary stop loss is triggered immediately upon opening a position, while the second stop loss comes into play when the position is in profit. It activates if the price moves slightly in the desired direction. From there, a trailing stop loss is employed, moving up with the price and closing the position if it falls a bit. Positions are primarily closed using limit orders to prevent slippage and extra fees, with market orders as a backup if the limit order isn’t filled.
LIVE DEMO
3. CRYPTO TRADING BOT PERFORMANCE IMPROVEMENTS
Based on backtest data from 2016 and recent live data, our double trailing stop loss system has significantly changed how our crypto trading bots perform, especially when looking at the CALMAR ratio. First, let’s explain CALMAR. It’s essentially a way to measure how much return you’re getting in comparison to the risks. The higher the CALMAR, the better your performance with less risk.
Our CALMAR ratio increased by 69%. That means we’re achieving better results without raising the risk. Our old crypto bot setup had a monthly CALMAR of 1.3, but now, with the new setup, backtest data shows we’re at 2.2. So, our double trailing stop isn’t just about increasing profits; it’s about adopting smarter, safer strategies.
We’re also seeing our cryptocurrency bots execute more trades. For example, our new setup is now averaging about 24.6 trades a month, up from 14.5. More trades and a better CALMAR mean we’re not just trading more; we’re trading more efficiently and cautiously.
4. CONCLUSION & FUTURE OUTLOOK
With the addition of the trailing stop loss, we’ve moved a step closer to achieving our goal of the ultimate crypto trading bot setup. It might not get any better than this, but we will continue to strive for excellence.
