Improve A Trading Strategy In Loss
How to improve a rule in loss
When looking to optimize a losing rule, one of the most critical parts is how to manage eventual losses. Managing and improving the rules that are not performing as we expected can make the difference in overall portfolio results.
So this is something that Coinrule can help you easily because when you trade manually, you don’t have the appropriate record of all your trades divided for each strategy you are pursuing. If you are a beginner trader, randomly buying and selling, you will often get emotional, greedy when you are in profit or scared during panic selling. All this results in a not structured approach for trading, which is very difficult to correct and improve.
Instead, using Coinrule, you plan specifically step by step trading system for all your rules, and you can see at each point where the rule is failing eventually.
Bitcoin drives the market. Each coin can have solid fundamentals, they can have momentum, but if Bitcoin goes down, it drives down all the market.
To improve a trading strategy in loss and buy the dip not only on coins that are on-trend but also when Bitcoin is moving on the upside, you can add another condition to the rule to increase the strategy’s profitability. In this case, Bitcoin’s price above a short term moving average signals that likely the whole market is moving up.
Based on this idea, we can optimize our existing rule to ensure that it only trades at times to be profitable.
How to build a suitable strategy
This is a smart way to improve a trading strategy in a loss that you can use whenever you notice unexpected underperformances of your rules. This is an example, but you can use any other improvement you feel like it can be beneficial for the strategy.
- Look at the trades the non-performing rule is executing
- Check the charts to see where it would have been the best time to buy and sell
- Find the best condition to optimize the executions
- Edit the original rule and add another condition, or edit specific existing parameters to create a new one.