Fighting the Septembear in Rektember
I recently had dinner with a friend that works in the social media industry, and we discussed the biggest debacle of Twitter’s ability to confirm the number of monetizable daily active users.
My friend has a thorough grasp of this subject. I left the dinner feeling happy not just with the amazing hotpot and the time spent together, but also because I had managed to download some parts of his brain, especially on the nuance and difficulties associated with identifying actual active users.
TLDR; the largest issue here is determining what defines a bot account. Elon Musk would have caged the bird long ago if this was clearly established and agreed upon. However, it is obvious that this is easier said than done.
We all use bots to some extent, whether it’s to scalp for hype goods, concert tickets, or level up in dungeons, etc. Personally, I’ve been a lover of bots since I was a kid, but I’ll save you the details of me botting my Assassin in the dungeon. The usage of bots makes our lives better, but it got me thinking: does my account come within the bot account category as well, according to Elon Musk’s definition?
Anyway, what does this have to do with the topic of the month, fighting the Septembear. Trading bots, especially grid trading bots, have been my current obsession.
The following are my opinion and I hope it will give you some insight and encouragement to start exploring crypto and DeFi, it’s probably nothing.
I am so addicted to the illusion of putting my money to work that I am always experimenting with new strategies. What excites me the most is the “moon math” in my spreadsheet which translate to the possibility of getting a huge return. It feels like having the ability to print money in the same way that governments all around the world do. However, everything is not as straightforward as it appears, non-financial advice, blah, blah, blah.
Previously, I used grid trading bots from time to time but didn’t fully realize their potential due to personal risk management reasons and exchange trading fees. However, as we enter the age of zero fee trading and are in the depths of a bear market, there has never been a better time to power up the grid. We know that cryptocurrencies are volatile, hence, we should employ strategies to profit from it.
This is similar to one of my early writings in which I discussed how Uniswap provided me with my daily dose of dopamine. This is to scratch my desire for instant gratification, but at the same time to compound these short-term gains into my long-term portfolio. The returns from grid trading deployed with a good strategy is like to Uniswap on steroids.
Grid trading is a quantitative trading strategy that automates the buying and selling of assets on the exchange through the use of bots. The bot places orders on the exchange at predetermined intervals within a price range. Based on the increasing and decreasing spot prices, an order grid is generated incrementally. When the spot prices fall outside of the set price range, it will cease making orders. As a result, choosing an appropriate range is critical if you want the bot to be effective for as long as possible in order to maximize your returns.
To summarize, the goal is to continuously buy low and sell high in order to profit from little price movements, but because humans are not physically fast enough to execute orders manually, we rely on bots.
My personal best bear market grid strategy so far:
Trading pair: BTC/BUSD — 0% trading fee
Price range: $20,000 — $21,800
Number of grids: 201
Number of sell orders matched on the best day in Rektember: 2,280
Daily APR: 0.51% / APR: 185%
*Disclaimer:
1. The 185% APR is calculated using the best day assumption
2. The above APR did not account for the profit from the actual cost of BTC to the profit from the first grid sell order to the final grid (estimated +5%)
This trade setup is based on the fact that I am willing to DCA BTC at current prices, but I do not see BTC heading to the moon anytime soon. A percentage of my purchases are allocated to the grid strategy with the intention of gradually increasing the portfolio size.
I think this can be boosted by transferring my BTC to FTX and trading futures instead of spot, given spot deposits in FTX have an 8% APY and some return on funding fee. However, trading futures with spot collateral is inherently risky; for example, if spot prices fall to the point where there is insufficient collateral, there is a possibility of liquidation.
Please share your thoughts in the comments.
Picking specific coins/tokens and timing the top and bottom is not for everyone, myself included. I dislike the feeling of hoping for a miracle/praying for my investments to go in the way I want. Hence, the love for using tools in “making money”.
Please contact me if you want to know more, learn more, or want me to reveal my “moon math”.
Thanks for reading, stay tuned for more DeFi content!
As part of my new year’s resolution to tell better stories inspired by my friends at work & crypto OGs, I will be sharing my experiences with crypto.
Free crypto & stocks along with recommendations to kickstart your journey: https://docs.google.com/spreadsheets/d/1f2bX-xKvmEzOrxDZqAvgCkIna1pmE_uI9pa_C4l4-DM/edit?usp=sharing
New to trading? Try crypto trading bots or copy trading
