A lot of people end up frustrated because their entry in bot trading didn’t go as smooth as they anticipated. But it’s not the bot nor the signals that are at fault here.
Bots don’t do well in down-trending markets, they excel during up-trending market movements. When I say up-trending I actually mean up-trending at a slow pace or sideways movement.
So how can you protect yourself against crazy market movements? The best way to protect your portfolio against these sudden drops is by either shorting or by staying in FIAT currency (USD, EUR…).
On many exchanges shorting is not possible so your only option so far was to trade with basepair Tether or USDT or sell your coins for USD. Others used DGD which appears to have an inverse correlation to Bitcoin.
"Inverse Correlation Between DGD (DigixDAO) vs BTC" by trader Trade_Masters - published February…
The graph above shows a comparison line chart between (DigixDAO) vs over the last 30 days. As you can see the…
Yet now there’s TUSD (since 18 May on Binance) which offers a great alternative. It’s also available on Bittrex. Because unlike the unpredictability of DGD it’s pegged to the dollar and not gold. And since we still pay our bills in fiat currency I prefer to stay in dollars during downtrends.
Binance Will List TrueUSD (TUSD) on 2018/05/18
Fellow Binancians, Binance will open trading for TUSD/BNB, TUSD/BTC and TUSD/ETH trading pairs at 2018/05/18 04:00 AM…
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TrueUSD is a “stable coin” that you can redeem 1-for-1 for US dollars.
Instead of converting to USDT which limits you to only a few pairs to trade with you stick to your base currency. Because TUSD is just available like any other ALT coin you can keep your bot on your base currency BTC, ETH, BNB.
A strategy you could use is to watch RSI levels, or whatever indicator you use to determine trend changes and buy TUSD whenever your base currency enters “overbought” conditions. When your base currency drops and enters “oversold” conditions you do the exact opposite and trade your TUSD back into your base currency. This way you can preserve your hard earned cash and increase the amount of base currency.
Another advantage of TUSD to USDT is that the bank account holdings are published regularly and subject to monthly professional attestations which we’ve yet to see for USDT.
The above references an opinion and is for information purposes only. It is not intended to be investment advice and may contain affiliate links. Seek a duly licensed professional for investment advice.