Diamond Trading Competition AMA Recap: Words from the Winner
“Once you really really learn something like Unibot, it almost becomes second nature to wake up in the morning, take a look at the trend and open up a position.”
-Joshua, Unibot Trading Competition Winner
Diamond Protocol hosted its first factory trading competition in May with separate winners on our USDC and ARB-denominated pairs. We’ve invited one of the winners, Joshua, to share his experience.
Joshua earned over 491 USDC in PnL in his position, closely edging above the second place at 445 USDC. Overall, the top 10 contestants in our May trading competition earned over 2200 USDC!
Below is our conversation with Joshua during our community call.
What Unibot Brings to the Table
(Transcripts edited for brevity)
Diamond: Knowing that you’ve tried many different platforms in crypto, could you tell us a bit more about how you use Unibot differently than those other platforms?
Joshua: I do a lot of day-trading on platforms like MUX, GMX, and Hyper Liquid — just trying them all out. But I think this [Unibot] is entirely different because I don’t have to actually day trade. I can focus more on getting yield by staying within range and not worrying so much about large price swings. You know, if you miss your entry or exit, it’s not the biggest problem in the world.
D: That’s great! Because that’s essentially what our product gives is to make a bet on a range, effectively shooting at a huge bull’s eye, in the sense that if the market goes against you, you have the choice to wait and let the price come back to your entry price and close your position then to minimize impermanent loss.
J: I’m on board with you. Your thesis changes from one where instead of speculating whether the price goes up or down, now you’re trying to come up with a different thesis of guessing the range, thinking about how I can get in that range at the right moment. For instance, If I feel that the range for a token will be $1.10 to $1.20, and I’ve decided to use 2x leverage, I will try to open the position at $1.15. I can go into specific strategy later, but it [Unibot] just gives you many different new aspects you can play with.
D: So, from your perspective, could you elaborate on how you day-trade versus using our product? Do you mean that our product has less active management — as you’ve mentioned — compared to day trading or do you get more returns from Unibot?
J: Actually, both, less management on my end and more returns. For instance, when I trade with you guys, I assume the market price trend is downward. I’m looking for the yield and an exit point of 2% less than the current price. That way, my profit and loss are maximized.
D: So, Before Unibot, have you tried providing liquidity on other platforms and DEXs?
J: Yes. Years ago, before I knew what I was doing, I was putting money on Sushiswap, Pancakeswap, and all those different DEXs trying to get this crazy yield. But, you know, impermanent loss is not a good idea at the end of the day. So I kind of just gave up on it [liquidity providing]. But now, Unibot provides many extra layers, such as the exit and entry points, especially with that simple-to-use position simulator graph. For me, it was just a much more straightforward reason and a much better reason to get back into it.
D: You’ve also mentioned earlier that you’ve used GMX. What do you think is the difference between us and GMX?
J: One, you’re [Unibot] faster. It seems like I can get in and out of trades quicker. I don’t know how that’s possible, but, you know, I’m not a fan of GMX. They didn’t have enough pairs for me to play with and didn’t pique my interest. I much prefer MUXs, even though the fees are too high. At the end of the day, it just seemed easier to mess with Unibot. It was much less stressful, and I didn’t have to worry about looking at the price in the middle of the night.
Joshua’s Trading Strategy
D: So you’ve mentioned that when you use our platform, you would identify and establish a range for a specific pair first, say $1.10 to $1.20, then how would you determine the optimal entry price?
J: The question is, really, how badly do I want to click the “open position” button. But let’s say that I assume the price is $1.10 to $1.20, and the price is $1.15. Then there’s only one option, and that’s going for 2X leverage. But if it’s $1.11 at the bottom of my assumed range, I would do the 1.5x for the leverage and probably put a +2% as my exit point above. That makes sense because I believe the trend will go up at that point.
D: Is there any philosophy behind how you determine when a price trend goes up or down?
J: I look at Bitcoin and figure out where it’s going from there. Bitcoin right now is 31,000. Last night it was 31,400. So to me, that means the trend is down. I’ll make a position if I feel like there’s more than a 50% chance that I’m right that the price will continue to go down even slightly. As we know, Arbitrum will tend to go down even further if Bitcoin goes down.
D: Since you’ve started using Unibot, what have you learned, and how have you traded differently?
J: In the beginning, I didn’t mind risk at all. I had tight ranges and far-stop losses; my idea was that the price could go anywhere and eventually return within range, and the fees weren’t expensive. But now, after I know what I’m doing, I’m happy with just taking small scalps. A few 60, 70 bucks profit per trade at 3 or 4 times a day and stick with that instead of leaving the position for multiple days. It seems like it’s the right strategy because this market is just so volatile right now.
D: Do you feel that you win in every position, or what’s your percentage of winning and losing in your positions?
J: You know what? When I’m actually working on the position, I haven’t lost. But there were times when I let it ride too long in the very beginning, and the range just completely changed from $1.40 to the dollar to $1.20 and then $1.10. You’re just like, Oh man, that range isn’t going back up to $1.40 anytime soon. So I might as well take the loss and so I can use the funds to continue playing.
D: That’s a very disciplined trading philosophy…
J: Yea, at the end of the day, you can either make no money or start making maybe 200 or 300 bucks again a day if possible. To me, you’ll make up for the loss quickly.
D: So we have someone from the audience who asked why do you not slice up your overall assets and deploy in various ranges instead? Especially if you believe in tight ranges and you open multiple ones. They also asked why not just leverage trade?
J: That’s what I did initially, and I still do. So I have wider positions for the longer term and tighter ones for the short. A 5% range is the one I play with every day, and then a 15% to 20% range is what I’ll keep around for a week or two. Unlike leveraged trading, I don’t want to have to pay attention to the price so much. Sometimes I just feel like letting it sit in range and relax a bit more.
Future of Unibot and Final Thoughts
D: So Joshua, are there any features or product enhancements you’d like to see in the future for Unibot?
J: I think one of them is more pairs, of course, but I mean, in an ideal world — a permissionless world — I like to add any pair I want. For instance, I want to play with Pepe Coin today, so I select a specific pair and add in the range for that. I don’t know if that’s ever possible, but in a perfect world, I would love to be able just to add my own pair and more leverage.
D: Ah, more leverage. That’s something we hear from our advanced traders a lot.
J: At the end of the day, 3X leverage is great for when you want to short the coin, but often, my thesis is that the coin will go up. Especially since my long-term thesis is that everything is going to go up. I know Unibot already has reversed pairs like the WETH pairs. Regardless, I don’t know. I don’t have much to complain about. But if I wanted some enhancements, that would be those.
D: Any advice for new Unibot users and any final thoughts?
J: I think it’s the same advice I give any trader on any platform. Just start small and get used to it. I noticed in the beginning that some of my stops would not hit. For example, I’d say stop at $1.10, and sometimes it wouldn’t stop, and the price would swing past. It’s just little things like that you have to get used to. Also, everyone should be ready for something to go wrong because nothing’s perfect. Hopefully, within 2 or 3 hours, you’re out of the position and made 60 or 70 bucks to move on to the next. Overall, I love using the platform [Unibot]. It’s very intuitive and easy to use.
Who We Are
Diamond Protocol’s Unibot is a leveraged liquidity provision platform that operates on top of DEXs. It allows liquidity providers on platforms like Uniswap to hedge their LP positions by borrowing and shorting volatile assets.
Unibot’s philosophy has always been to give the DeFi and crypto community a product that allows systemic earnings in a volatile market. From the beginning of our product design, we grappled with the question of how to earn profit in a market that is so unpredictable — our result was Unibot. This product aims to significantly increase our user’s odds of winning. We aim to create a scenario where a Unibot trader can accrue fees earned and wait for an ideal exit price even if they guess the market wrong.
Our approach has since been appreciated by seasoned traders within the crypto and DeFi ecosystem like Joshua, and we welcome everyone to join our discord, where we regularly host trading competitions and events with rewards. Come on by and meet the team and other veteran traders eager to discuss and share strategies!
🐦 Twitter: twitter.com/diamondprotocol
💎 Crew3: crew3.xyz/diamondprotocol
👾 Discord: https://discord.gg/diamond
✍ Blog: medium.com/@diamondprotocol
🔮 Galxe: galxe.com/diamondprotocol
🌐 Website: dmo.finance
