Strategy Bot: How to Quickly Identify Highly-Profitable Strategies?

Users can make a profit by copying others' strategies in Gate.io strategy bot. But it confuses many users in choosing the right strategy with high profitability: should I judge by high yield or high ROI amount? how to analyze yield curve? I choose a strategy of high ROI or ROI amount, but still have a loss, what should I do? Now, Gate.io will teach you step by step how to pick out excellent strategies that are highly profitable.

Is it okay to just consider ROI and ROI amount of the strategy?

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When many users choose a strategy, they will judge by a single indicator - ROI and ROI amount of the strategy, the measurement of the of the strategy's cumulative earnings from its creation till now, which is closely related to the signaler's entry timing. For example, if the signaler creates the strategy in a market downturn, but the copiers copy the strategy after the price rises sharply, and the price of the currency continues to fall or fluctuate during this time, then the copiers have a very small room to profit, and there may even be a loss.

In addition, although the strategy has a high ROI, but unstable return. For example, the strategy in the figure, which is created very early, and profitable recently, but the slope of the curve is very steep, indicating that the user's return is not stable. It's highly related to the volatility of the market and the entry time of the strategy. So, users need to carefully observe the market trend when copying.

Why do I still lose money when I copy a highly-profitable strategy?

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First of all, users need to know that the ROI of the strategy is a cumulative yield, which is the performance of continuous profitability from its creation to the present. Then the level of return depends not only on whether the strategy itself is excellent, but also on the timing of the strategy's creation, that is, the entry time of the signaler.

Based on this premise, strategy-copiers should clearly understand that copying high yield does not mean that copiers can also get high returns. Though the copiers can't make the same profit as the original strategy, why is there a loss?

The time of copying strategy is equivalent to the time of the copiers' entry, and the return from this point of time is the real return of the copier, and the strategy before the time point has nothing to do with the copier.

For example, the strategy in the following figure, although the strategy is basically profit (in red), but if the copier enters the market at time point C, then the profit before time point C has nothing to do with the copiers. The strategy has been falling after time point C, then for the copiers who entered the market at time point C, the profit at time point C = 0. Since the profit curve falls after the time point C , the copiers will always be in a state of loss.

What to look at when filtering highly-profitable strategies?

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Gate.io suggest that when users copy the strategy, they not only need to look at the ROI and the ROI amount of the strategy, but also need to look at the strategy's yield curve!

What to look at for ordinary strategies?

<1>Look at the overall trend of the yield curve

An excellent strategy has a steady upward yield curve.

For example, as the strategy in the figure shows, from the perspective of the yield curve, although there is some fluctuation on the whole, the entire strategy curve is an upward trend. The slope of the rising trend line is basically the same, with no sharp increase or steep decline.


As the following strategy shows, although it is profitable, its yield curve fluctuates too much, the overall trend upward trend is not obvious. It is recommended that users need to observe the trend of the curve when copying such strategies, and carefully choose their own entry time to copy.



<2>Look at the recent trend of the yield curve

For copiers, the time to copy currently is the entry time to "create" strategy. Therefore, if the historical trend of a strategy is good, but its recent trend is in losses. Then the copiers will also follow the recent losses.

As the figure below shows, the strategy is sharply profitable when it is created at time point A, and suffers from a sharp decline after time point B. If a user copies the strategy at time point B, he will suffer a loss. (Although the yield curve shows that it is profitable, it is a loss for the copiers).


As the figure below shows, the strategy has been in a stable growth trend after time point D, and the user copies the strategy at time point D. Then the user will continue to be profitable with the strategy, and there may be further profit.

How to look at a grid strategy?

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Grid trading is a trading strategy of selling high and buying low. After setting the grid range, if the price is in the grid below the entry price, it will buy, and when the price rises to the upper grid line, it will sell, which will lead to a profit curve trend of losing first and profiting later in grid trading.

Take the spot grid strategy as an example, which has a trend of losing first and profiting after it is created. In the early stage, due to the decline in prices, grid trading implemented non-stop buying, with a small number of losses. As the market rises later, grid trading made non-stop selling. The strategy's floating profit and loss (floating profit and loss = (current price - buying price in average) * number of coins held) reached 5261USDT, indicating that the strategy has achieved positive profits after a small loss in the previous period, and there is an greater potential possibility to profit for the day.

In addition, the recent upward trend of the yield curve indicates that the strategy still has room for further upward profitability. Copiers can choose a suitable time to copy.


For strategy copiers, copying strategies can not simply look at a single indicator such as the ROI amount and ROI amount of the strategy because there may be a loss even if you copy a highly-profitable strategy. Copiers need to consider the yield curve to pick out the strategy with an upward and stable trend overall. Strategy with an upward trend recently can make the copiers better profit.

Answer & Reward

After learning how to quickly identify the profitable Quant strategies, now answer the following questions. Whoever answers all correctly will be rewarded 10USDT Quant trial funds for copiers!

Please fill in the questionnaire with the answer to the question: https://snssdk.gatedata.org/w/QFnpb7GI

1. Which indicators do you think will be most effective in helping you filter out high-yield strategies? (Single Choice)
A. ROI of the strategy
B. ROI Amount of the strategy
C. Win rate of the strategy
D. Yield curve of the strategy
E. The number of copiers who copied the strategy

2. Why do I still lose money after copying a high-yield strategy? (Single Choice)
A. From the time point of creation to the current time point, the yield curve of the strategy shows a downward trend
B. The strategy's yield data is fraudulent
C. The amount of deposit at the time of copying is too small, resulting in the profit of the strategy after copying is not as good as the original strategy
D. The amount of deposit at the time of copying is too large, resulting in more losses when the market declines after copying

3. How to effectively and quickly pick out an ordinary strategy with high profitability (multiple choices)
A. Just pick the strategy with the highest yield
B. Pick the strategy that is stable and upward in the overall trend of the yield curve
C. Only need to pick the strategy with the highest amount of returns
D. Pick the strategy with upward trend of recent yield curve
E. Try to choose the strategy with the largest number of copiers

4. What are the characteristics of the grid strategy compared to other strategies? (Single Choice)
A. Grid strategies are the easiest to make a profit
B. Grid policies have minimal risk
C. Grid strategy is prone to the profit trend of losing first and then making a profit
D. Grid strategy is the strategy with the largest number of copiers

5. Which strategy do you think has the potential to be profitable now? (Single Choice)

A.

B.

C.



Author: Gate.io Researcher Julie
This article represents only the views of the researcher and does not constitute any investment suggestions.
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