Betting on a bounce!

Betting on a bounce!

By bengy | Idle Musings | 25 Apr 2021


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Toying around with futures is always a risky proposition, especially if you aren't actively hedging and matching trades. I never really have the time to faff around with that stuff, so I've been happily playing with the grid trading bot on the Binance perpetual future markets.

It is still completely risky, so I only pay around with small amounts with some serious discipline. For quite a few weeks I had happily picked up a nice bonus through a neutral strategy of 10x leveraged grid on the Doge/USDT stablecoin settled perpetual contracts. Until doge spiked and wiped out my bot by triggering my stop losses. Thankfully the bot had made enough so that the loss on exit wasn't a problem... The problem was that against my better judgement, I shorted manually...

Anyway, the step sell off over the last couple of days has created an opportunity to make small bets on long futures (with smaller leverage just in case the volatility isn't over).

I managed to get a few small bots running longs on perpetual futures of dollar settled BTC, ETH and Link. I missed the slide to the bottom, so I only caught some of the upside at 5x, but in general my grids were positioned a bit too low to trigger properly.

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I decided to move to focus on the link perpetual futures as there was some decent support around 30 usd, and it had been bouncing around the 30-35 region. So I set up a long strategy with a grid of 149 orders between 30-34 usd at a risky leverage of 20x. I have a stop loss at just below 30usd... But if that gets triggered I'm already lost as a long strategy means that I've been buying long orders all the way down from 34usd!

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The difference between a neutral bot and a long/short bot is that the neutral starts making money immediately on the matched trades. Meanwhile the long bot runs a large deficit at the start as it picks up unmatched long orders on the way down. This leaves you wasting into your margin... So need need to keep spare margin to account for this or the bot terminates at a loss.

However, if you are expecting a setting up then it can be profitable. At the moment the bot has traded and matched enough (nearly 6000 matched pairs!) to get over the initial deficit.

It could be possible to start the bot with a grid that straddles the market price. However, that means that need to start with a large position to match against the upside. I guess I can try that out next time!

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bengy
bengy

I am a Musician (Violinist/Violist) specialising in Early Music living in The Netherlands. I have a background in Mathematics and Physics due to an earlier tertiary level study... and so, I'm still quite interested in Science and Technology related stuff!


Idle Musings
Idle Musings

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