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Build a Crypto Long Portfolio: TradingBot Strategies Explained



8 Apr, 2021


The long bot works to create a long term crypto portfolio to maximize crypto holdings over time. That is the singular goal of all strategies that long bot deploys.

How does it diversify my portfolio?

Most crypto portfolio holders buy their favourite cryptos in the name of diversification or better yet buy the top 10 but that doesn't work as most coins are highly correlated. While that holds true for most coins, we have recently seen some correlation disassociation between coins that represent different use cases say currencies (BTC, DASH, LTC) vs oracle coins (LINK, DOS) as both have very different applications and have different factors at play. However oracle coins would have high correlation with smart contracts (ETH, EOS, TRX) as the former are designed to be used by the latter.

What this means is that our portfolio coins are diversified across use cases and then further diversified within leading coins in the selected use case so that overall portfolio can produce good returns with good diversification.

When does it buy Bitcoin or other portfolio holdings?

Long bot is designed to take into account various technicals that indicate momentum, volume and trend when considering a buy decision. We are not going to disclose our exact strategy but for instance, a buy signal would be generated when the chosen crypto is in oversold territory on a larger time frame and a change of momentum and trend is observed with a concurrent increase in volume. Similarly, a sell signal will be generated when the coin is overbought and a change in the direction of trend and momentum is observed with a spike in volume. Please keep in mind while this is a simplified example, the actual algorithm depends on market conditions and takes into consideration also things like fib levels and level divides.

As you can see finding such great times to buy in usually takes a long time and that's why you might see your capital sitting for some time before long bot opens a buy position. That being said, the rarer these buying opportunties, the more you can be sure of the much-coveted long term returns.

How does it hedge my portfolio?

The Long bot not only buys at a great price and sells when the asset is overpriced, but it also hedges your portfolio in case of sudden drops in value. It does so by using hedging techniques expert traders have been using for long but weren't available for crypto markets until recently. One common technique is to short the equivalent portfolio asset in options market wherein you stand to loose option premium at best if markets keep climbing up but you stand to prevent huge potential loss in case markets drop. This is because, in case of a drop of say 25%, your portfolio asset loses 25% of its value, yet your short bet on options market will be up 25% - so you retain 100% of your net value while the market is down 25%

Can I change my portfolio or holdings?

Botsfolio works best when we use the optimized portfolio created by our expert traders using extensive backtesting and years of experience trading different asset classes. We therefore don't allow our users to change their portfolio components or composition mix.


To recap the things long bot does to create your long-term portfolio

  1. Deploys various stragies in parallel with the goal to maximize your crypto assets
  2. Creates a dynamically balaned portfolio diversified across crypto use cases
  3. Buys when the markets are oversold using dollar cost averaging
  4. Sells some of your holdings when the market are overbought
  5. Hedges your portfolio to retain its value

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