How To Get Started With Coinrule. Create Your First Rule-Based Trading Strategy.
In our previous post (How to plan a simple algorithmic trading strategy. A step-by-step guide) we described in detail how creating an automated trading strategy must be approached as a well-defined process. The most important step is an in-depth assessment of the market conditions, followed by defining the tools that should best fit those specific conditions.
We are thrilled to announce that Coinrule added direct integration with each connected exchange to provide the most accurate executions. The trading engine retrieves the prices traded on the exchange, so the rule precisely activates and sends out the preset order. This improvement will significantly enhance the efficiency of any rule.
The question is: how to create my first rule once I set up my Coinrule account?
Developing a trading strategy is, indeed not an easy task. Without any doubt, the best way is to start with simple trading plans. Here are some examples of rules that I am sure you have executed manually at least once.
Coinrule allows you now to plan them out automatically!
RISK MANAGEMENT
One of the most critical aspects of implementing an automatic trading strategy is to prevent significant losses that will potentially compromise our capital long-term. That comes even before making money, as most would expect!
With Coinrule, you can build a defensive strategy that will promptly sell part (or all) of our portfolio in the case of sudden drawdown.
You can select a single coin and decide when it’s the right time to sell to cut off the losses. Remember that each coin stuck with a loss in your portfolio prevents you from catching new opportunities!
In this other example, the algorithm will keep an eye on the market checking for any of your coins with price decrease larger than 4%. If this happens, a sell order will sell 25% of the coin that meets the condition to reduce your exposure. Eventually, you will decide to repurchase it later at a lower price.
That’s a truly powerful tool. Only one rule will protect your whole portfolio!
Of course, at your discretion, you can change all the parameters in the example based on your preferences. Price movement, time horizons and the amount to be sold are all parameters that are easily customisable and will meet every traders’ need.
Having an automated strategy running on your crypto-wallet 24/7 is a central pillar for your risk management approach. That will make your trading safer and will reduce the risk of ugly surprises derived by a significant drop in price.
ACCUMULATION
Waiting for the new Altseason? It is taking quite long now. Meanwhile, it’s always possible to find some excellent trading opportunities among all the projects out there. You can accumulate those coins that have solid fundamentals and are going through a steady development, letting an automatic trading strategy send the buy orders following certain predefined rules.
Some call this strategy also DCA (Dollar-cost averaging). If you are wondering whether or not now it’s a good time to buy crypto, starting to accumulate with a DCA approach may help you decide.
The advantages of this strategy are:
- NO short-term analysis is required. The strategy can be planned across a time horizon of weeks or months, so all it matters is the long-term result.
- NO ongoing adjustments are required. Fear and greed are major drivers of bad investment decisions. An automated accumulation strategy makes you stick with your original plan excluding short-term biases.
With Coinrule, you can also add a further price condition, that prevents you from buying blindly at undesired prices.
Using charting analysis, you can identify critical price levels and choose to buy a small portion of the asset with different orders. That fits perfectly with markets experiencing uncertain phases. When the market has no clear direction, the wiser approach is to wait for the price to retrace to your desired levels. That will guarantee yourself to buy at reasonable prices avoiding to rush into “more expensive” executions in case of periodic sudden spikes.
An automated trading plan helps you avoid the FOMO traps!
PRO-TIP
One of the main goals that we set for ourselves developing Coinrule is to be able to provide the maximum degree of freedom for every trader.
Imagine now to set a strategy that combines both Risk Management and the Accumulation strategy.
That allows reducing the exposure of coins in your portfolio that are experiencing severe price drops and reinvest those proceeds into one or more coins that are in your “wish-list”, and you would like to accumulate for a medium-to-long-term investment.
Reinvesting proceeds from positions in loss allows you to invest in your favourite coins without using other funds from those positions that are instead performing well.
If you want more trading rules, you will find more templates of trading signing up on Coinrule.
Try yourself your first automated rule-based trading strategy!
What is Coinrule
Coinrule allows you to create trading rules that run automatically across your favourite exchanges.
With Coinrule, you can quickly develop your own trading rules and strategies and set them up to run automatically. It is the “if-this-then-that” for cryptocurrency trading that allows you to plan your crypto trading rather than having to sit for hours in front of charts. Best of all? No coding skills are required, meaning anyone can use Coinrule.
Sign up for a free trial: www.coinrule.io
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DISCLAIMER I am not an analyst or investment advisor. Everything that I provide here is purely for guidance, informational, and educational purposes. All information contained in my post should be independently verified and confirmed. I can’t be found accountable for any loss or damage caused in reliance upon such information. Please be aware of the risks involved with trading cryptocurrencies.
