Hey folks, so if you’ve followed along with previous posts, you’ll know that I’ve done a lot of experimenting with trading bots in the past, and after watching others tout some pretty amazing returns, I thought I’d figure giving the Cinnamon Toast trading bot from Breadbytes a try. I first heard of Breadbytes last summer, but I hadn’t read anything crazy about it and at the time I was way too busy to try out one more thing out — this, on top of the fact that I was (and still am) a little shy about putting a lot of funds back on CEXes. But by mid-January, with rumors of the bull market possibly kick-starting, my twitter feed was blowing up with reports on mind-blowing returns like these:

I guess you could call it a major case of FOMO, but this is what started my journey into BreadBytes, and on first glance I definitely liked what I saw.

Yes, I’ll talk later about how BreadBytes lost me a pretty good chunk of money, but the main purpose of this article isn’t to complain about losing money, for if you’re around long enough, everyone in crypto loses money at some point. Instead, my main focus here is to dissect some of the things that I wish I had considered before getting into BreadBytes, and other alternatives I wish had taken. That way if you’re planning on venturing into BreadBytes (or any other crypto trading bot for that matter), hopefully you don’t go in with your eyes closed making the same mistakes that I have

As I mentioned before, in mid-January, BreadBytes, more specifically the Cinnamon Toast bot was on a really hot winning streak:

As you can see from the graphic above, just from these set of trades alone, you could have easily made returns greater than 25% on your principal. And this highlights one of the great things about BreadBytes — that they’re super transparent about their track record. Additionally, you also have the ability via Astrabit (from where the bot conducts its trades from via API keys) to manually close out any position the bot opens up at any time you please. In other words, you have somewhat of an “eject” button so to speak if you’re not satisfied with how the trade is going or if you simply want to exit your position.

And in hindsight, this is exactly what I should have done, but I truly wanted to be a passive observer here and let the bot do it’s thing. And well…it definitely did some things…

Setting up the Cinnamon Toast strategy

The Cinnamon Toast strategy costs approximately $84.99 dollars to run a month, a sum that is split up between paying for the bot itself as well as the strategy. I chose the Cinnamon Toast strategy because of the crazy winning streak (as I mentioned before) it went on the month before, as well as the fact that it clearly states on the Breadbytes website that it’s the most popular:

Setting up the bot is relatively easy, and the Breadbytes team gives very clear directions about how to setup your bot in relation to what exchange you are using. In my case, I used Bybit and I deposited an initial sum of a little more than $4000 dollars worth of $USDT.

Starting up my bot in the last week of January, I immediately went into profit on my first trade, going up approximately 1.92%. Needless to say, I was pretty pleased and I was excited about what the bot was going to be able to do.

Unfortunately, that was the only time that my account was in the green.

Cinnamon Toast Bot after 1 month

I used to watch quite a bit of UFC in college, but I had to eventually stop after getting too anxious when guys would be getting the crap beat out of them not knowing when to tap out.

I was the guy that didn’t know when to tap out:

As you can see from the graphic above, the bot systematically started dumping huge losing positions that just…seemed to just keep on hitting. Once again, Breadbytes makes these trades all public as you can see on their website:

From a quick glance, the performance actually doesn’t look that bad for there are definitely a lot more green wins than reds. But if you actually tally up all the cumulative losses — well look you don’t need to do that, I’ll just tell you — I lost approximately 29.7% of my principal in just one month. Disregarding a lot of small wins, with just 3 trades I lost 39% of my principal.

What did I do Wrong?

If I were to go in again, there are several things that I wished I had done differently, or at least spent more time considering before aping in. These include…

I wish I looked harder at the trading history — If you don’t study the trade log closely, it’s relatively easy to get blinded by the fact that there are more winning trades than losing trades. But what matters the most (and what I didn’t pay attention to) is that the cumulative sum of the losing trades generally tend to be a LOT more (on average 6–7x’s greater) than the cumulative sum of the winning trades. Therefore it didn’t matter if there were twice as many winning trades — the huge losses would still have put me overall in the red. And to be honest, tweets like this just pissed me off:

OK yes, they do show the difference in “Profit percentage” which I appreciate, but the “Win Rate” is a very misleading statistic. Saying that the win rate is 50% sort of implies that you win just as much as you lose. But as every crypto trader knows, getting completely rekt on an altcoin shouldn’t be weighted the same as going up 2% on a bluechip.

Cinnamon Toast only does longs— if a bot continually just opens up longs, there’s really no hedge against your bet. In other words, the bot is really only making bets that the price of $ETH is going to go up. There’s no profits to be taken when $ETH goes down. And this was completely my mistake, because I didn’t realize this until after I spun my bot up. If I were to pick a bot again, I most likely would have gone with the French Toast or Short Bread bot — both which do longs and shorts.

I wish I had read some criticisms about the bots to get a more balanced take — I’ve heard numerous people say that once people are touting crazy returns that they’ve gotten with something, that’s it’s already too late. I’ve also heard that you should never buy into a green candle. Had I followed either one of these two sound pieces of advice, I may have thought twice, or at the least done a little bit more research before aping in. For whatever reason, out of the the 5-or-so articles/videos I saw, they were all talking about BreadBytes touting massive gains. Had I read an article like the one I’m writing now, at the very least it would have helped me adjust my expectations more realistically going in.

I wished I had zoomed out a bit more — As I mentioned before, I decided to go into Cinnamon Toast after a 14-win streak, when in fact, I should have taken a step back to see that it might not just be the bot, because ALL of crypto was pumping:

As you can see in the graphic above, the total crypto marketcap printed green daily candles for 18 out of the 25 first days of 2023, which coincidences with the same period of time Cinnamon Toast had its “14-day win streak.” In other words, in addition to the Cinnamon Toast bot, you probably would have been profitable if you had money in almost anything crypto-related…hell even Coinbase stock ($COIN) did almost a 2x during the same period of time:

Not taking into context what was happening in the macro-environment allowed my FOMO to go unchecked.

Conclusion

All this being said, I am fully-aware that there are some that would completely disregard my experiences and sum it up as having paper hands. Literally just a day or two after I decided to close my bot and “tap out,” the bot had a really stellar few set of wins:

Do I wish I stayed in a few more days? Of course. But honestly, I still would have gotten out afterwards because personally, I wasn’t happy with the bots performance, and also…well I still would have been down 6% despite of all those wins, and there was no telling whether instead of going up 25%, whether I would have gone down another -18%…in one single trade nonetheless.

And let me be explicitly clear — BreadBytes does a lot of things right. They’re extremely transparent with their track record, they are constantly working on fine-tuning their bots in efforts to improve their performance, and they’re one of the few bots that can prove that they were profitable throughout the depths of the bear market. Knowing what I want, the Cinnamon Toast bot just isn’t the product for me.

If there’s any other considerations you think I should have taken, I would love to hear about them. Additionally, if you’re a BreadBytes-maxi and you think I’m not being fair, I’ll be open to hearing why you think so in the comments below.

And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!

Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you, especially when it comes to leverage. Cheers everyone!