5. Auto Trade Settings
Auto Trade Settings Introduction
Once you’ve connected your exchange, you’re ready to determine how Crypto-ML will manage your portfolio. This guide will walk you through your selections with both a video and screenshots.
All Auto Trade selections are made from the Auto Trade Dashboard.
Auto Trade Video Walkthrough
The following video discusses each section of the Auto Trade Dashboard.
Auto Trade Overview
Auto Trade selections appear as follows:
- Select Market allows you to choose the fiat or stablecoin you will trade against. This list will be expanded to any options your exchange makes available to us for your account location.
- Portfolio Weighting lets you decide what portion of your funds will be allocated to Bitcoin and Ethereum Strategies.
- Profit Allocation sets what portion of a profitable trade you’d like to set aside in that particular cryptocurrency. Setting that to zero will keep all of your proceeds in the rebalance and trading pool. By increasing the number, you will establish a separate pool of BTC and ETH that will grow over time and not be factored into any future rebalances.
- Strategy lets you have multiple trading strategies work on your account simultaneously. This is the key to increasing opportunity and reducing risk.
The funds used for Portfolio Auto Trade and rebalancing will only consist of the funds you have currently existing in the Market you have selected and BTC and ETH. Any funds in other crypto, fiat, or stablecoins will be left alone.
Select Your Market
As a first step, you’ll need to select the fiat or stablecoin you want to trade your cryptocurrency against. Exchanges call this a “Market.”
Funds should be available in your selected Market so that Auto Trade can buy crypto when a signal is generated.
It is important to note that other Markets will be excluded from Auto Trade. For example, if you select USDT as your Market, then your USDT balance will be considered for Auto Trade. Any balance in USDC, USD, EUR, GBP, or others will be excluded from Auto Trade’s scope.
► View your Auto Trade Dashboard.
Understanding Your Portfolio Value
The Portfolio Value adds up the funds in Bitcoin, Ethereum, and your selected Market. It excludes funds in other cryptocurrencies and other Markets.
The Portfolio Value may look different in two scenarios:
Auto Trade Off
Prior to selecting a Market and starting Auto Trade, the Portfolio Value is the sum of:
- Your Bitcoin
- Your Ethereum
- USDT (the default Market)
Auto Trade On
Once you’ve selected a Market and started Auto Trade, the Portfolio Value will be the sum of:
- Your Bitcoin
- Your Ethereum
- Your Selected Market
The Portfolio Value is important because it shows you the funds within the scope of Auto Trade. It also confirms it will leave other funds alone.
Portfolio Weighting Selection
Auto Trade will divide your funds so that it can trade both Bitcoin and Ethereum. Trading multiple coins is important as it spreads your risk.
In the screenshot above, we have selected that 39% of our Portfolio Value will be traded with Bitcoin strategies. The other 61% will be traded with Ethereum strategies.
For example, if your portfolio has a $10,000 balance and you choose a 50/50 weighting, then $5,000 will be used for Bitcoin strategies and $5,000 will be used for Ethereum strategies.
Profit Allocation allows you to capture a percentage of any gain and set is aside in cryptocurrency.
When a profitable trade completes, a portion of the gain will be left out of future rebalancing and trades. This is good to use if you would like to grow a crypto balance with a subset of your gains.
- Setting this to 0 keeps all gains in the trading pool. This helps compound your trades over time.
- Setting it to 100 keeps all profits set aside. Your trading pool will not compound, but you will grow a separate balance of crypto over time.
This section allows you to allocate weights to each of our trading strategies. Allocating your trades across multiple strategies decreases risk and increases trade frequency.
- Hold keeps a designated percentage of your portfolio held in cryptocurrency.
- CML-T applies deep learning to technical analysis data in order to generate a high-probability rules-based system.
- CML-A measures the predictions from our neural networks to find anomalies in the market that indicate market manipulation that should be followed.
- CML-X is human-curated trades from strategies still in the research-and-development phase.
Except for Hold, these strategies all seek to compound your money over time by capturing numerous small wins. Our machine learning clearly proves out this is the best long-term approach. However, no single strategy works in all conditions. That is why it is advantageous to run multiple strategies.
We can provide three general recommendations:
- Balanced: Assign 25% to each of the four strategies.
- Trading Only: Assign 50% to CMT-T and 50% to CML-A.
- Aggressive Trading: Assign 33% to CML-T, 33% to CML-A, and 33% to CML-X
Starting Auto Trade
Once you’ve made your selections, you are ready to click Start Auto Trade.
Important: When you Start Auto Trade, any funds in Bitcoin, Ethereum, and your selected Market will be balanced according to your selections.
This initial balancing may cause buy and sell transactions on your exchange.
If you have previously set aside profit in Bitcoin or Ethereum using our Profit Allocation function, they will also be rebalanced unless you first move them to another subaccount or portfolio.
Any funds outside of Bitcoin, Ethereum, and your selected Market will not be moved or considered for Auto Trade.
Crypto-ML’s portfolio rebalancing method is patent-pending, designed to keep your portfolio in balance across many cryptocurrencies and many trading strategies without introducing excess exchange fees and excess taxes. Consider it to be efficient portfolio rebalancing.
When you start Portfolio Auto Trade, you are asking it to oversee your crypto portfolio and keep it in balance with the percentage selections you have made.
Maintaining a balanced portfolio is a common financial practice. It reduces your risk by exposing you to different assets. It also allows you to adjust your profile as your risk appetite changes over time.
As a common example, you may want your traditional retirement account to ideally consist of 80% stocks and 20% bonds. If the stocks grow faster over time, your actual balance will shift from ideal. Perhaps you have drifted to 85% stocks and 15% bonds. To correct this, a periodic rebalance event occurs to move you back to your ideal 80/20 allocation. In this case, stocks would be sold and bonds would be purchased.
The problem with periodic rebalancing is it introduces trades that would otherwise not be needed. This creates excess trading fees and taxes. Over time, these excess fees will dramatically reduce the performance of your portfolio.
In fact, many of the services similar to Crypto-ML trade your cryptocurrency by constantly rebalancing between a variety of crypto. One service we tested rebalanced every four hours across dozens of crypto. This quickly caused thousands of transactions to pile up in a very short time. This is not efficient from an expense perspective and it is a nightmare to deal with come tax time.
Apart from periodic rebalancing, there are a variety of other rebalancing methods, but each introduces additional transactions. Crypto-ML is different. We will instead perform rebalance calculations each time a trade is opened or closed. This means no additional transactions will be performed in order to rebalance.
As an example, if a BTC trade is closed profitably, a portion of that trade may be left in BTC in order to maintain your desired allocation in the “Hold” bucket. In this way, as one of your buckets grow, others can grow proportionately.
Rebalancing occurs between strategies and between cryptocurrency, always seeking to return you back to your ideal portfolio balance.
Important: There is only one time Crypto-ML will rebalance your account outside of trades. That is when you first start Auto Trade. This means that each time you stop and start Auto Trade, rebalancing will occur. It is advisable to avoid starting and stopping the system excessively.
Adding and Removing Funds
Over time, you may want to add or remove Stablecoins, Bitcoin, or Ethereum to your pool of funds. You may do this at any time as logic is built into Auto Trade to handle this scenario.
For example, you may want to add a certain amount of USDT every month. When the next trade issues, Auto Trade will recalculate your entire portfolio and take the appropriate action to bring you back into balance.
This means you do not need to stop and start Auto Trade. Rather, just wait for the efficient rebalance method to handle your balance change on the next trade.