How To Calculate Profit On Coinrule

It is important to calculate properly the P&L of a rule to give us an idea of the actual value added by launching a specific rule. Traders must calculate profit correctly to understand the overall profitability of their trading as a whole. The article explains how to calculate the profit on Coinrule.

 

 

The profit calculation for Coinrule has been designed in a way that portrays the real performance of the rule and shows the real value Coinrule adds to your holdings. The total profit in the dashboard is the sum of all rules (active and completed). The profit calculation does not take into account demo rules. 

 

Realized and Unrealized Profit

 

Rules can open multiple trades at the same time. To calculate the P&L of a rule, we need to consider both trades that are closed and those that are still open.

To do that, Coinrule uses the concept of realized and unrealized profit when calculating the P&L of a rule.

An unrealized gain or loss refers to trades that are still open, for example, coins bought and not sold or vice versa. It takes as reference the current market price of that coin relative to the entry price. As it changes depending on market conditions, the unrealized profit can change over time until the trade is closed.

Example:

If you buy 1 ETH at $500

After one day, the current price is $600, so the P&L will show a profit of $100

The following day the current price drops to $550, so the P&L will decrease by $50

 

 

A realized profit, instead, refers to trades that are complete. Here the calculation compares the exit with the entry price. The realized P&L remains as it pictures the performance of each closed trade.

 

Example:

If you buy 1 ETH at $500

After one day, the current price is $600, and you sell at that price, the P&L will show a profit of $100

The following day the current price is $550, but you sold all the coins, so the P&L is still $100

More Examples

Case 1:

Bought 1 ETH at $500, the current price is $600

Unrealized profit= (market price-entry price)* Quantity
= (600-500)*1= $100

If the position is closed at $650

Realized profit = (Sell price – entry price)* Quantity 

= (650-500)*1=$150

The realized profit of the position is not going to change.

Case 2

Buy 1 ETH at $500, Sell half the position at $650, 

Realized profit = 650-500*0.5= $75 

The second half of the position remains open with a current unrealized profit of $75. The total profit that the rule shows is $150.

If the price drops from $650 to $600, and you sell that price, you will realize a profit of (600-500)*0.5= $50. The total profit that the rule shows is 50 + 75 = $125.

Case 3:

Sold 1 ETH at $500, the current price is $600

Unrealized loss = (entry price – market price) * Quantity
= (500 – 600) * 1= -$100

In this case, the rule shows a temporary loss of $100 because you would have been better off holding the coin rather than selling.

If the price drops and you buy back Ethereum at $450

Realized profit = (Sell price – entry price) * Quantity 

= (450-500) * 1 = $50 

 

Possible differences between P&L on Coinrule vs. Exchanges 

The system calculates profit independently for each rule. When users intervene manually, this affects the P&L of the rule. An example can be seen below: 

Sell 1 ETH at $500, and the current price is $450. The user repurchases the coin manually at $450.

The user has profited; however, since the action was not part of the rule, the system does not record the sell action. If the price increases above the initial sell price, the rule will show a loss, indicating that you should have bought back the coins. 

As a rule of thumb, any trade that happens outside of a rule is not taken into account, and this is because every rule takes into account its actions to give a proper overview of what value a rule can specifically add to the wallet.

If you don’t trade manually on your account, ideally, the sum of all the rules should be the actual P&L on your account because of Coinrule.

The profit does not take into account the trading fees, which are shown separately within the rule.

 

Overall, the profit calculation in Coinrule is designed to portray the real value that Coinrule adds to one’s wallet while trading. The total profit on the dashboard gives a trader an overall idea of his performance while trading. Having a proper profit calculation allows traders to reassess their strategies’ success or failure and adjust accordingly.

 

How To Calculate Technical Indicators?

 

 

 

Technical indicators are mathematical formulas applied to asset prices. Their purpose is to provide traders with useful information about the trend or market conditions of that specific asset. Traders use this information to assess the likelihood of a particular scenario to unfold. How to calculate technical indicators to optimise the results of your strategy?

Interpretation of technical indicators

It’s important to stress that a technical indicator does not represent a trading strategy per-se. On the contrary, the trader uses technical indicators applying his own methodology to run a trading strategy.

Apart from the subjective interpretation of signals generated by indicators, an experienced trader may also adjust the mathematical formula or the setup of an indicator to provide more effective outcomes that he can incorporate directly into his trading plan.

One common trading tip that advanced traders use is to calculate indicators starting from the closing price of the asset in a specific period (according to the selected time frame). Then, the trader considers only signals generated by “closing prices.” 

Wait for price confirmation

The example below shows the daily price chart of BTCUSD. The chart includes the Moving Average (9) and the RSI (14). 

 

 

The MA(9), in the example at 9202 (orange price) is the average of nine days, using the closing price as reference for each day. Tradingview calculates the indicator using the closing price from the previous eight days (prices in blue) and includes in the calculation the last traded price of the current day (9181, in red). Since this price changes constantly, the MA(9) will change as well. 

In the example provided, still, more than 15 hours are left before the end of the day, a lot could happen on the market, and the value of the indicator could change significantly. The current signal that the indicator is providing may not be confirmed at the end of the period. Therefore, the volatility of the last traded combined with a value of indicator that changes accordingly may generate a lot of signals, most of them likely not significant. 

Avoid false-signals

Looking at the following example, the MA9 and the MA50 appear very close one to each other. Brief price spikes can cause the indicators to cross, generating a signal not validated by the closing of the candles. This situation happens quite often, especially when potentially significant trading signals are on the verge of occurring.

 

 

How Coinrule solves this?

Coinrule trading bot uses only confirmed “closed prices”, that means that it excludes from the calculation of the indicator the current market price. The resulting value of the technical indicator is static, and short-term market volatility doesn’t affect it.

Calculating indicators only based on closed/confirmed prices represent the best way to calculate technical indicators to optimise their signals for your strategy.

 

 

Patience is one of the most valuable virtues for traders, and waiting for the confirmation of a trading signal will add value to your strategies! Thanks to Coinrule, you can include this into your automated trading system.  

 

How To Set Up The Allocation Of Your Trading Strategy

 

 

 

 

When you launch an automated trading strategy, you should make sure that it can run smoothly according to the current balances available. If you trade manually, you can see in real-time the funds available so that it can be easier to keep under control the amount that is tradable at that moment. One of the most important things you need to make sure to set up correctly your strategy is to define the amount of coins you want to trade and which wallet will be the Quote Currency of your rules. Follow these steps to input the parameters of your rule that fit the allocation of your automated trading strategy.

Check you balances

Before creating your rule, keep an eye on the funds that are currently available on the exchange. Bear in mind that even when you create a rule on the Demo Exchange, you need to respect the allocation available. 

 

 

What coins are you willing to trade? Are there any coins you wouldn’t like to sell? How much of these coins would you like the rule to buy?

These are all questions you should ask yourself before moving to any further step.

Not all coins are the same

Let’s start by underlining that you can use some coins to trade directly other assets. For example, most of the coins on each exchange are traded vs Bitcoin or other stable coins. That means that you can buy Litecoin, for instance, with your BTC wallet on Binance, or with USDC on Coinbase Pro. On the other hand, if you only hold EOS and you want to buy Litecoin, you need to sell that coin to a wallet that will allow you to buy Litecoin. 

 

 

These currencies that you can use to buy other coins are quote currencies, and you will find them listed (if available on the selected exchange) in the “wallet” dropdown. That will define what funds the rule will use for buy orders and where the proceeds of the sell orders will go.

 

 

The selection in this dropdown will also define how the bot will check the market conditions. The rule will be able to trade only coins that have a trading pair with the quote currency selected. In the example above, USDT. In case you have chosen an option such as “any coin” or “any of my coin”, bear in mind that the bot will only consider coins that have a trading pair with USDT.

In that case, you may want to select a wallet that allows as many opportunities as possible for your strategy. Fiat currencies, stable coins, or BTC are good options but always double-check on the exchange of what trading pairs are available.

Adjust your balances to fit your trading idea

You can also adjust the allocation of your automated trading strategy with a few clicks using a Direct order. There is no need of accessing your wallet on the exchange to buy or sell coins as you can do that directly on Coinrule.

You may want to use USDT as the quote currency of a rule, but you don’t own any coins yet. With a Direct order, you can buy the exact amount of USDT to run your strategy. Right after launching the order to the market (or simulated, if Demo Exchange is selected), you will find the new coins in your balance so that you can create a new rule.

 

 

 

If you think that the balance on Coinrule doesn’t reflect your actual allocation on the exchange, you can also refresh it on the dashboard in real-time.

 

 

Define the size of your orders

After setting up the best Quote Currency for your strategy, it’s now time to specify the size of the orders of your rule. 

The most common options are:

• Percentage. Select this if you want to trade a fraction of all (100%) of your holdings with each trade. When the condition triggers, the bot makes a snapshot of your current holding at that time and calculates the specific amount to trade depending on the percentage selected.

 

 

In this case, the bot sells 20% of the balance of the selected coin when the condition is met. 

 

 

In this case, the bot buys the selected coin with 20% of the current balance of USDT available when the condition is met.

• Specific amount. You may alternatively define the exact size of each order so that you can foresee precisely how much the bot will trade. If you specify an amount in USD terms, for example, the bot will calculate how many coins to trade based on the current market price at the time of the execution.

 

 

Common obstacles

Each exchange sets a minimum size for each order allowed on the trading platform. Usually, the size is around 10-20 USD depending on the exchange. Make sure the amount you set up for your rules complies with such limits, so you don’t risk that the rule gets stuck with rejected trades.

Another common situation happens when the rule tries to trade coins that are not available anymore because another rule or a previous order traded them. 

For example, when you use the operator “Any Time” and you sell 100% of the total balance of a coin, it possible to run out of coins to sell. You can read more about this operator here.

 

 

A typical case 

– you buy multiple times the same coin 

– in the following action, you set to “sell 100% of total balance of that coin”, 

– if two sell actions are triggered immediately one after the other, the first order sells all the coin, and the following order doesn’t find any coins to sell anymore.

Example:

– Action 1 Buy 1 ETH at 200 (with following condition to sell 100% at price +10%)

– Action 2 Buy 1 ETH at 190 (with following condition to sell 100% at price +10%)

– Action 3 Sell 2 ETH (100% of current holdings) at 209 (190 + 10%)

– Ation 4 Sell ETH at 220 (200 + 10%) fails because all the coins were sold in the previous action.

To avoid that, you can set the second action with “sell 100% of amount bought of that coin“. In this way, the rule with always trade the same amount across different actions and that will significantly reduce the risk of running out of coins.

 

Remember that a trading bot is a smart tool that helps you implement your perfect trading system. It requires a careful set up so that it will trade the desired amount you expect, and it keeps running smoothly with no allocation issues for your automated trading strategy.

 

Follow these tips, and the trading bot will manage your funds with no stress! 

 

Create your rule now!

 

Trade safely!

 

Optimize Your Trading Strategy With The Right Timeframe

 

 

 

 

One of the most critical aspects of building a successful trading strategy is to optimize the timeframe of your trading strategy to fit the market conditions. The logic of a strategy could be correct, and it could produce good results, but optimizing the setup allows you to achieve much better performances. 

Coinrule allows a wide range of options so you can catch all the opportunities that the market offers. 

How to optimize the timeframe of your trading strategy?

The trading bot will send an order every time a condition is met on the market. One of the most tricky parts of setting up a trading strategy is the choice of the price percentage and the timeframe of the triggers.

Coinrule allows different options to cover all traders’ needs.

 

Static Reference

If you select “from current live price” we use the market price at the moment of launching the rule. The bot uses that price to calculate the price that will trigger the order based on the percentage set.

 

 

When the price target calculated is reached on the market, the condition is met and the bot sends the order to the market.

 

 

If the rule has multiple executions, that market price is updated with new market conditions when the rule starts from the beginning.

 

 

It’s important to underline that the price reference updates only when execution happens, which means that if the price never reaches the first price target, the strategy will not start. You will need to edit the parameters or relaunch it in that case.

When you relaunch the strategy, that will create a new rule with an updated starting price based on the new market conditions.

 

Dynamic Reference – Trading Strategy Time Frame

When you select a specific timeframe, for example, within 1 hour, the rule checks the price changes according to the candlesticks provided by the exchange.

 

 

In this case, the reference updates every hour to follow the price trend dynamically. Depending on the time frame you selected, the frequency of the update changes accordingly. Of course, if the condition is met during that period, the bot sends out the order to the market.

It’s very easy to verify how it works, and if a condition is met. The price increase or decrease set in the condition must happen within the “candle” related to the time frame chosen. 

In the example below, the rule is set to trigger when ETHBTC has price increase by 2%

 

Looking at the price chart you can verify when the rule should trigger.

 

 

Selecting a specific timeframe allows your strategy to follow the trend of the price dynamically.

 

Timeframes of Technical Indicators

In the case of Moving Averages and the RSI, the timeframe is used to define how to aggregate data for calculation. For example a MA(9) in a timeframe of one day stands for the average of 9 daily prices.

 

 

The selection of the timeframe has a direct impact on the frequency of the executions. In general, select 15 min or 1 hour for short term strategies and higher timeframes for long term trading systems.

 

How do we calculate prices?

We use real-time data coming directly from the exchanges. We use prices of specific trading pairs to increase the preciseness of the triggers and the executions. For example, if you set a condition as the following

 

 

the bot will use prices of the BTCUSDC trading pair on the exchange to verify if a condition is met or not. Using this method allows the trading bot to align the prices in the condition with the price that will be traded when the order reaches the market.

In case you create a trading strategy like the following

 

 

the trading bot will only check prices of coins that have a trading pair with USDC on the exchange, we will filter out all the others. If you want to increase the possible coins that the rule will trade, you may want to select a wallet related to a currency that offers more trading pairs on the exchange.

Now that you know how to optimize the timeframe of your trading strategy according to your preferences, you are ready to define the orders of your strategy! 

Trade safely!

 

The THEN Operator

 

Creating an automated trading strategy involves setting up a condition that will activate the strategy and defining a least one action to be executed when the rule runs.

You can build multi-step rules for advanced crypto trading strategies defining sequential blocks for your trading plan. For example, you may want to define a take profit on that first order, or you may want to protect your wallet from unexpected losses with a stop loss.

Trading sequences within the same rule

A 360 degrees complete rule would look similar to this structure

1. Initial condition – that starts the rule
2. Action connected to the initial condition
3. Sequential condition – the bot will start checking this after the bot executes the previous order
4. Sequential action – this bot will send another order once the sequential condition is met on the market.

Let’s make an example. Some coins experience periods without a clear trend. The price oscillates within more or less defined boundaries. It would be profitable to buy and sell the coin once it approaches these levels to take advantage also of low-volatility moves.

 

Setting up a rule like defined above, you will buy when the price approaches a support level and sell if it bounces back around the resistance area. An automated multi-step trading strategy is perfect to take advantage of these setups because trading manually in a range with no direction is very stressful.

In this case, when selecting the THEN operator each action will be sequential and the rule will run according to well-specified steps. BUY – SELL – BUY – SELL, and so on..

You have plenty of flexibility for setting up sequential rules, you can customize each parameter to fit your trading idea. Thanks to multi-step rules your crypto trading will reach the next level!

Would you rather run different blocks of the rule in parallel, instead? Read here!

 

The ANY TIME Operator

 

Introducing new operators, you are now able to create multiple strategies within the same rule. That allows you to enrich your trading plan and to create a fully automated crypto trading bot.

Let’s make an example. You may be a long-term believer in the price growth of Bitcoin. Then, you want to set up a DCA-accumulation strategy. From time to time, price volatility offers a short-term opportunity that you can catch with Coinrule adding a ANY TIME operator.

While you are keep accumulating periodically Bitcoin, you will take advantage of strong price increases. Interestingly, in these cases, you can sell Bitcoin back to your base currency so you will have more capital available for your DCA strategy.

 

 

The first and the second part of the rule are executed in parallel. Every time the first action is completed, we start to check for the second condition, the first condition doesn’t need to wait for the second action to run again.

This is only one example of the wide range of possibility that the ANY TIME operator offers. You can also accumulate and then set up a stop loss to cut your exposure in time of drawdown.

Would you rather run different blocks in sequence on your automated crypto trading bot, instead? Read here!

The DO NOT Operator

 

Building a crypto trading bot for your wallet doesn’t mean that you must trade all your coins without exceptions. Most of the traders hold in their portfolios some coins as a long term investment so they would rather keep separated those assets from the trading activity of the bot.

The good news is that it is now is extremely easy with Coinrule!

Be in full controls of your coins.

Let’s assume you want to build a trading strategy to take profit on some of your coins, taking advantage of short-term volatility. Probably you would like to exclude from this strategy some coins you are HODLing for the long-term. The only thing you need to do is to add a DO NOT operator after selecting an action. In this way, you can select up to three coins that the rule won’t trade.

 

 

 

Another typical example of the benefit of adding the DO NOT operator is to avoid buying coins you don’t want to add in your portfolio under any condition. Again, just specify the coins, and you will add a higher degree of control to your automated trading strategy.

 

You can exclude specific coins from being traded by a rule but you can let other rules buy and sell them, with Coinrule you have plenty of flexibity and alway the full control of your crypto trading bot!

 

 

The WAIT Operator

 

One of the key aspects, when building a crypto bot, is to set up up the right condition that will activate the strategy and generate the order to the market. Sometimes to increase the confidence of your trades you may want to avoid false breakouts.

How to avoid false breakouts

If you ever traded cryptocurrencies or any other freely exchanged asset, you know that price can be highly volatile, especially in anticipation of significant moves or trend reversal. Exactly when the best opportunities arise!

High volatility could cause a temporary breach of a key level, only to retrace or bounce back right after. You may be waiting for that breakout for buying or selling, remaining trapped in a trade in loss if the trend reverses immediately after.

 

 

To avoid this situation, you can set a price condition to activate the rule and then WAIT for a confirmation of that move.

 

The same happens quite often when you set a stop loss. The price reaches your target and then rebounds strongly. You remain with a trade cloded in loss and miss the trend inversion.

Using this indicator is a smart option to check how market conditions evolve after a certain condition is met, so you can avoid false breakouts that will cause you losses and stress.

Read about other indicators that will enhance even more the potentials of your rules!

 

How To Trade Crypto?

Trading vs Investing explained

What is the difference? Investing in Bitcoin usually means to buy Bitcoin for the long term because of an underlying belief in the value of the asset.

In other words, the investor believes that the price will ultimately rise to match its long-term value, regardless of the daily market volatility. Usually, people invest in Cryptocurrencies because they believe in the Blockchain Technology or in the companies that are building the ecosystem. Since they don’t care much about the ups and downs of the price, Crypto investors tend to HODL the coins long term.

 

 

HODL is a popular term in the Bitcoin community that gets its origin from a typo of the word “hold” that appeared in an old 2013 post in the Bitcoin talk forum.

 

 

Trading, on the other hand, puts the main focus on the current price of the asset. Whenever it trades lower or higher, all that matters is to make a profit.

Traders view Cryptocurrencies as a mere instrument for making profits, sometimes they don’t really care about the Technology or the ideology behind the tokens they’re trading.

 

Why do people love to trade cryptocurrencies?

Because crypto is very volatile, and so you can make a nice amount of profit if you manage to predict where the price is going correctly. Additionally, crypto markets trade 24/7, providing endless opportunities around the clock.

Last but not least, cryptocurrencies are unregulated assets which makes it relatively easy to start trading without much paper-work or procedures.

Not all traders are the same, though.

 

Read here about the techniques that traders use to make consistent profits every day.