PoW of Trading Signals
aunchVerse Community Trading Signals: A Week in Review
The LaunchVerse community has recently introduced trading signals as a utility. These signals were initiated on November 14th, and we have closely observed and analyzed the results from the first week.
Understanding the Signals
The signals are categorized into three types:
Wins: Trades that ended with a 1% profit.
Losses: Trades that ended with a 1% loss.
Non-triggered: Trades that did not open any position.
Rules of Engagement
The following rules apply to these signals:
Each signal is tracked for a maximum of 10 hours. If the expected entry level is not hit within this timeframe, the signal is passed over, ignored, and classified as non-triggered.
Once the entry level is realized, the position is entered as either Long or Short.
The Stop Loss (SL) is set to 1%, regardless of the bot’s recommendation, to minimize risk.
The Take Profit (TP) is set to 1% to avoid greed.
A leverage of around 5x is recommended.
Performance Overview: November 14-21
During the week of November 14-21, a total of 115 signals were given:
47 wins
30 losses
38 non-triggered
A trader who followed all the signals without exception could have turned 1000 USDT into 2292 USDT, yielding a profit of 129.2% per week with 5x leverage on futures.
Calculation Breakdown:
The initial balance of 1000 USDT increases by 5% with each win, and decreases by 5% with each loss. This is due to the 5x leverage applied on the 1% profit or loss from each trade.
So, if there are 47 wins and 30 losses, the final budget would be calculated as:
1000 * (1.05)^47 / (1.05)^30 ≈ 2292 USDT
This means that an initial investment of 1000 USDT could potentially grow to approximately 2292 USDT within a week, given the same number of wins and losses. However, please note that this is a simplified calculation and actual trading results can vary based on market conditions and trading strategies. Always trade responsibly and within your risk tolerance.
Profit Optimization Strategies
Upon closer observation of the 47 wins, we found that many trades had more than 1% in profits but were closed early due to the 1% target. To capture more profits from these winning positions, we propose two different approaches using a trailing stop:
Trailing Stop Starting from +1% without TP: This strategy involves not setting a TP but increasing the SL when the price goes up, starting from the price being at 1% above the entry level. This approach could increase the overall profit by an additional 9%, resulting in a cumulative profit of 55.13% with 5x leverage.
Trailing Stop Starting from +2% without TP: This strategy involves moving the SL to 1% profit when the price hits 2%. This approach could increase the overall profit by an additional 10%, resulting in a cumulative profit of 62.89% with 5x leverage.
Conclusion
In conclusion, we have identified three different approaches to trading these signals, each with its own potential profit:
1% SL and 1% TP - yielded a 129% profit in a week.
Trailing Stop - Moving the SL to the entry level when the price hits 1% and so on - yielded a 255% profit.
Trailing Stop - Moving the SL to 1% profit when the price hits 2% - yielded a 262.89% profit.
Please note that these results are based on the signals and market conditions for the week of November 14-21, and future results may vary. Always trade responsibly and within your risk tolerance.
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