Know How
In this section, we explain a few aspects of how the Customized Trading Solution for Cryptorea works. We discuss how it makes money and what factors are taken into account to achieve successful and consistent returns at reasonable levels of risk. We will also explain why this is possible, and while we don't think we are unique in our approach, we certainly aim to learn from the best. We believe in a continuous process improvement philosophy in which every day, we or our computers keep searching for even better solutions with higher yields at lower levels of risk. Below are the main guidelines of our strategy to build successful automated trading solutions.
01
Long, Short and Neutral
A value investor will buy a position and hold it, mostly expecting it to go up. We operate expecting some of the assets to go up, down, or move laterally. No market moves in a straight line, and operating in every direction simply gives us higher probabilities to succeed.
02
Equity Above Balance
The target of having the Equity value of your account above the balance implies that your profit is positive. This is a prerequisite to build risk on that short term profitability that will reduce the overall risk. We apply this methodology at any chance we have.
03
Brothers in Trades
Operating with multiple assets can bring the possibility of utilizing a winning trade to close a losing trade. As long as the net value of both is positive, we use this resource to get out of old non-performing trades.
04
True Signals
Despite the hundreds of indicators out there, none of them produce a quality signal for the level of requirements that we have. This means that we have to create our own signals on where to go long, short, or do nothing. In order to do that, we use the only two things that are true in every financial market: Price and Time.
05
Universal Investment Law
The more risk you take, the bigger the return. That is a universal law of finance and business. Then, how can we achieve such high ratios of performance and risk? The only possible way to resolve that equation is by achieving small profits per transaction and closing a risky trade as soon as possible.
06
Humans Improvise
Human Manual Trading is slow, erratic and it requires continuous attention. Like most human behavior, it is also impatient, inconsistent and emotional.
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Automated Trading operates with data and discipline, not on emotions. Machines can calculate and execute the precise value to Take Profit and Limit Losses. High Performance Machines do what they’re instructed to do, every single time, 24 hours/day.
07
Tools
Most of the resources we use are actually free and in the public domain. Here we name a few:
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Historical data, differential equations for industrial control and automation, games probability, statistical learning, hidden Markov models, evolutionary coding, and optimization servers are some of the tools we use the most.