Shitcoin tips for the n00b

If you're contemplating alt coin day trading or building a bot yourself, there are a couple of things you should consider.

Before anything else, let's get the most important stuff out of the way. Don't use "cross margin." Cross margin is a nice way of saying "all in." It works much of the time, but if you have leverage when it doesn't — you're broke. Instead bet nice and easy, no more than 60% of your wallet at any given time, so even if you lose you still have 40% to play with. That is called "isolated positions."

Next, consider if you want to be contrarian or follow the trend. Most traders follow the trend, most of the time. I.e. long when trend goes up, short when it goes down. But it's easy and profitable to do the opposite, especially if you combine it with a 2x-64x Martingale strategy. My bot made 8 bitcoins from one in six months on a contrarian Martingale strategy (but lost it all due to cross margin in a couple of days).

In order to do better than Bitcoin contrarian trading, you want to utilize one or more currencies that fluctuate a lot, but mostly return to the mean. An example of such a shitcoin is Balancer.

The traditional trading approach is to jump on a trend as early as possible, and ride it as long as possible. A good shitcoin for this might be Rune. When a trend is established, Rune tends to keep it for some time.

Both these alts are for decentralized cross-chain exchanges. But of course, the same principle applies to most coins. Here's a sketch of how you'd place your longs (green) and shorts (red) in each scenario:

No strategy is perfect, and both of these will lose money here and there, but both of them are fairly easy to tweak to a healthy Sharpe ratio with great gains. The former is easier to get a better Sharpe ratio on, as you can tweak that with your bet and leverage. The latter is harder to get stable gains on, and in my experience, you need several years worth of data to get a fine Sharpe ratio. But you can still achieve good profit, it's just that you'll often also end up losing a lot of what you're made. Which conjures up a  lot worse emotions, although the money in pure fiat might be a lot more.

So how to get started with making a bot? Easy! First install Python. Then

import finplot
import pandas
import requests

url = 'https://www.binance.com/fapi/v1/klines?symbol={symbol}&interval={interval}&limit={limit}' \
        .format(symbol='BALUSDT', interval='1w', limit=1000)
data = requests.get(url).json()

df = pandas.DataFrame(data, columns='Time Open High Low Close Volume a b c d e f'.split())
df = df.astype({'Time':'datetime64[ms]', 'Open':float, 'Close':float, 'High':float, 'Low':float})
df = df.set_index('Time')

finplot.candlestick_ochl(df[['Open','Close','High','Low']])
finplot.show()

which gets you this:

Then it's just a question of whacking your keyboard for a few days, and you're good. Don't do this if you're A) a perfectionist, B) stubborn, C) stupid or D) mad. Stop immediately when you find something with a good Sharpe ratio. Otherwise you end up like me, spending/wasting four years of your life looking at price charts. Me ∈ A∪B∪C∪D, don't be me. But GL and have fun!