DOGE killed my Bot!

By bengy | Idle Musings | 17 Apr 2021


Killed by DOGE! Killed by DOGE!

 

 

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Over the years, I sometimes have a little bit of a play around on the futures trading markets with a bit of toy money. Generally, I tend to write off this money as a bit of fun... because, well futures is a pretty damn risky business, especially when you start stacking some leverage! So, it requires some rock-hard discipline to set stop losses all of that regular loss minimisation strategies.

However, I just don't have the time and dedication to really make much of it... and so, I tend to make bets with stop losses and stop profits... and then just check in later to see how it went. That does mean that these orders are just viewing the market in a small snapshot, and I'm not around to continuously adjust the orders in order to take advantage of changing market conditions.

So, the similar problem with spot markets! In the spot markets, I tend to take a very long view on projects. That means, I try and get the early IEO/IDO or crowdsale spots, and for tokens that are already trading, I tend to now buy at market price and then leave it at that. I'm not looking to make 1-5% percent changes one way or the other whilst risking the potential larger losses that come with trying to catch the crumbs.

I now have a couple of little trading bots running for fun, I definitely will never put much into them... they are mostly just a curiousity. The Stoic bot is doing pretty well on maximising for USDT, but that is a spot market bot... meanwhile, the grid trading bots on KuCoin do their little bit to rake in a little bit more Bitcoin.

A few weeks back, I started messing around with the Binance futures grid trading bot. So, this is a bot that you can load up and set the parameters for and try and catch some volatility profits. It is a strategy that works reliably well with range-bound pairs.... like DOGE/USDT!

 

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Normally, when playing with futures I will only take a 10X leverage at most, and set some pretty tight stop-loss orders. However, with the grid trading bot, you can set a range (and a stop-loss for the whole bot) and the bot will set up a grid of around 75 matched limit-order pairs on the futures market (at leverage). This is a total of 150 orders that are constantly being replenished and rematched.... resulting in a regular trickle of matching orders and profits.

So, for reference, the about bot ran for about 20 hours and did about 1313 matched PAIRS! Plus, it was by no means the most (or least) efficient of the tests. It's slow work for the bot, but the advantage over a manual setting of orders is the sheer frequency of the orders!

However, like all bots (and leveraged trading in general) it is a good idea to set stop orders to minimise loss. The strategy for leveraged trading is not PROFITS... but minimising LOSSES! Liquidation is never a fun thing, and losses are magnified by the leverage.... something that people seem to never learn if you look into enough crypto Telegram chats.

 

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Well, my bot was happily churning away matching orders until this tidal wave rise in Doge price triggered the stop loss... That actually wasn't the problem, the stop loss was really tight and so I didn't lose anything due to the amount of matches it had already made over the previous days.

Unfortunately, where I went wrong was taking manual control and betting against the further rise of doge by placing short orders myself.

Time number 1 of leveraged trades, stay well out of choppy waters! I had two attempts stop losses before I gave up hope of the market recorrecting...

 

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So, it turns out that this might be a Wallstreetsbets pump? Welk, ik afraid that this time there is no big hedge fund to pretend that they are playing the hero against. This one is really going to hurt retail investors when it comes down... If it comes down!

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Originally published on my HIVE/STEEM Blog!

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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
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