DMX-Bot 2.0: The High-Risk DMX Strategy

Backtesting results of various risk assets and cryptos (in-sample)

Profit / Loss Calculation from Live Trading (out-of-sample)

In Vollbild anzeigen

The trades of the DMX Bot HIGH-RISK portfolios can be copied across multiple exchanges.

Where can I copy? Find out how in this updated article!

Guide: How to copy trade on Binance?

Whatsapp Group

In the WhatsApp group, I discuss the trades, show price movements, and we discuss current topics.

https://chat.whatsapp.com/EFXNhrodgBO6Ld5jorteJY

Track Record

Download the track record here as CSV.

https://damianhunziker.net/track-record.php?s=2

 

 

 

Copytrade Time-Limited
High Profit Trading Bots

The High-Risk DMX strategy for automated trading of cryptocurrencies and risk assets

Requirements

  1. Intended to capitalize particularly on longer-term trend phases or hype.
  2. Handhabung des resultierenden hohen Drawdowns.

Squeeze out the last bit of the trend.

The High-Risk strategy aims to extract as much as possible from strongly trending cryptos.

Therefore, a strategy was chosen that breaks all records during trend phases, both upward and downward. As the backtesting results show, this strategy is capable of outperforming Buy and Hold by multiples, tenfold to hundredfold! With Bitcoin, it would have outperformed Buy and Hold threefold over the past 13 years and turned 1,000 euros into 38 million. And all this with a maximum drawdown of 30%!

Despite achieving such high profits, it is very stable. This means it works with surprisingly many crypto pairs and risk assets without major optimization. While it does incur high losses, it compensates by generating much higher profits. And they are much higher.

Where are we trading? Which crypto pairs? What leverage?

Ten coins with high market capitalization are traded (short/long). The pairs are: BTCUSDT, ETHUSDT, BNBUSDT, SOLUSDT, BCHUSDT, DOGEUSDT, AVAXUSDT, LINKUSDT, MATICUSDT, and SHIBUSDT. No leverage is used, and the portfolio is offered on multiple exchanges.

Optimization of loss phases without intervention in the strategy

The optimization of drawdowns plays a subordinate role in the planning, parameterization, and implementation of the strategy. However, the increased drawdown is controlled by three crucial additional measures that do not influence the strategy itself and its parameters, allowing it to earn high profits unhindered.

  1. Through diversification. Ten crypto pairs with high market capitalization are traded. This achieves an average performance of these pairs. The gains/losses of the pair accounts accumulate independently of each other. It is expected that this will also cushion the high drawdowns of individual pairs. This makes it possible to trade these pairs and exploit their high volatility effectively with this system.
  2. Through position size. Internally in the program flow, it is defined that the individual pairs may only use 10% of the initial total investment for their cumulative activity. They cannot lose more than that unless they have previously won with the pair.
  3. Through manual intervention, meaning people take the task of deactivating the bot in excessively long sideways phases proactively. This also allows for effective influence of fundamental analysis. The signals for switching are also communicated in the chat, among other things.

It can happen that pairs perform poorly over an extended period. However, the average drawdown for most pairs is around 30%, but fluctuations above 50% can occur. Especially in the crypto winter, it may be advisable to deactivate this portfolio manually. It can be nerve-wracking, which is why it is also the High-Risk portfolio.

In the crypto winter, deactivate the bot manually and activate it during trend phases.

t sounds simple, and it actually is, but it’s certainly not for everyone. Actually, it’s about turning it back on at the right time during the crypto winter. When this time is, it can be deduced from the economic and crypto hype cycles. If you miss the timing and wait too long, you might miss the first particularly strong trades, which is the biggest risk. You can already turn it back on when the crypto winter is at its peak or shortly thereafter. It would then lead to some losing trades, but that’s not a problem, and it should already capture the strong initial breakouts from the beginning of the new trend phase. You can turn it off during the economic downturn when the deepest disillusionment sets in and the price begins to move sideways in the long term or when the long-term downtrend flattens out.

The goal is to deactivate the copy trading at the beginning of the crypto winter after the largest downward movement and then at the height of the depression when nothing is moving, and it’s just extremely boring and no one is talking about it, when it slowly starts to rise again in the American economic cycles and the central banks’ interest rates flatten out and it is discussed that they are turning then you have to get in and activate the copy trading again. However, if you manage to do so, you should be able to increase the performance significantly and reduce the drawdown decisively. The bot takes care of everything for you when it comes to daily business, and it forgives you a lot if you can’t time the entries exactly, then it just makes more losing trades.

Manual intervention is possible but not necessary.

However, this is by no means a must, and you are likely to do better if you do not intervene manually because poorly performing pairs are balanced out by well-performing ones, and you can make a lot of mistakes through manual intervention.

It should be enjoyed with caution because if you miss the first crucial trades, you may have to go through an even more difficult drawdown phase. In addition, you may have missed the most important trades.

Losses are limited to the accounts of the respective pair.

No leverage is used again, and the crypto pairs have their own account balances internally. So it is possible that trading with a crypto pair may not go well, and a high drawdown may occur, but if that happens, it is always limited to the account of the respective crypto pair, and it is expected that during the same time, other pairs will perform much better, so it evens out. The account size of the pairs is 10% of the total account balance. This means that if you invest 1000 USDT, the initial positions for the pairs will only be 100 USDT each.

Differences from the Low-Risk Strategy

The High-Risk strategy is very different in its objective and implementation from the Low-Risk strategy. With the Low-Risk strategy, the emphasis was on creating the most stable upward-trending investment opportunity for money in the crypto area. The focus was on low drawdown and a stable strategy. Apart from both being trend followers, the two strategies have very little in common.

Technical Description

I use Tradingview as statistical software and Binance as a broker. The programming language for the bot processes is Pinescript by Tradingview. For hosting the self-developed API connection, I use a German hosting provider for the highest processing speed between the servers of Tradingview, the German hosting provider, and the exchanges.

Damian Hunziker, 11. 4. 2024 – present