Smart Hedge [Advanced]

Smart Hedge [Advanced] is an advanced trading robot based on a combination of grid and hedging strategies. The robot automatically opens and closes positions in the cryptocurrency market, using different settings that can be adjusted to manage risk, trade size, and behavior in changing market conditions. This bot allows flexible strategy management, including averaging by levels, dynamic rebalancing, and hedging.

Main Parameters

coins

• Description: A list of cryptocurrencies that the bot will trade. It is written as a string with the names separated by commas.
• Default Value: ADA,APE,APT,ARB,ATOM,DYDX,DYM,EOS,GALA,GMT,JASMY,LINK,MATIC

sizeUsd

• Description: The amount of USD used for each trade.
• Default Value: 10
• Impact:
• Risk and Profit: Increasing this value raises both potential profit and risk since a larger position is more sensitive to market changes.
• Relation: A higher sizeUsd increases the need for careful adjustment of rbLevelsSizeFactor and basketProfit to manage risk effectively.

gapPercent

• Description: The percentage of price deviation that triggers hedging of the position.
• Default Value: 4
• Impact:
• Protection: This parameter sets when hedging starts to protect the position from further losses.
• Relation: The optimal value depends on the strategy's aggressiveness and current risk. Higher gapPercent values delay hedging, which might be suitable with a low rbLevelsSizeFactor.

rbLevelsPercentStep

• Description: Sets the percentage change in price at which averaging occurs, meaning a new position is opened.
• Default Value: 5
• Impact:
• Averaging Frequency: A lower rbLevelsPercentStep makes the strategy more sensitive to small price changes, increasing the frequency of averaging.
• Relation: When sizeUsd is high, it's recommended to use a higher rbLevelsPercentStep to reduce the frequency of trades and prevent excessive averaging.

rbLevelsSizeFactor

• Description: A factor by which the size of the position is multiplied during averaging by levels.
• Default Value: 0.3
• Impact:
• Trade Volume: Determines how much the position size increases when averaging. Smaller values lower risk and require less capital.
• Relation: A higher rbLevelsPercentStep allows using a larger rbLevelsSizeFactor to balance the frequency and volume of trades.

basketProfit

• Description: The percentage of profit at which the robot will close all positions in the basket.
• Default Value: 1
• Impact:
• Profit Target: Defines when to take profit. A higher value increases potential profit but also the risk of holding positions for too long.
• Relation: As sizeUsd increases, basketProfit should be balanced to lock in profits quickly and manage risk.

symbols

• Description: A list of trading pairs used for testing the strategy.
• Default Value: 'BCH/USDT, BTC/USDT, ADA/USDT, ETH/USDT, XRP/USDT, TRX/USDT, SOL/USDT, LTC/USDT, BNB/USDT, DOGE/USDT'
• Impact:
• Testing: Used for backtesting the strategy on historical data. Choosing the right pairs in testing helps optimize the bot for real trading.

Additional Parameters and Their Role in the Strategy

• rbDistancePercent: The percentage distance between the entry price and the current price for averaging. Higher values reduce the frequency of trades.
• rbDistanceSizeFactor: A factor that changes the position size during averaging by distance. It defines the volume of averaging and affects overall risk.
• rbDynamicFactor: A factor for dynamically changing the rebalancing percentage, making it longer or shorter with each operation. A higher value increases the strategy's flexibility.
• sellFactor: The hedging coefficient (e.g., 0.8 = 80%). It sets how much of the position to hedge when gapPercent is reached.

Parameter Relationships

1. sizeUsd ↔ rbLevelsSizeFactor ↔ basketProfit: When sizeUsd is large, it's recommended to use a smaller rbLevelsSizeFactor and a lower basketProfit to lock in profits faster and manage risk.
2. rbLevelsPercentStep ↔ rbLevelsSizeFactor: A higher rbLevelsPercentStep (less frequent averaging) allows for using a larger rbLevelsSizeFactor to increase the averaging volume.
3. gapPercent ↔ sellFactor: A lower gapPercent triggers hedging earlier, reducing potential losses. However, the effectiveness of hedging depends on the sellFactor, which sets how much of the position is protected.
4. rbDynamicFactor ↔ rbPercent: The dynamic factor (rbDynamicFactor) adjusts rbPercent to adapt to market changes, making the strategy more flexible. A higher rbDynamicFactor means trades will be less frequent.

Smart Hedge [Advanced] is an advanced robot that allows traders to manage their strategy flexibly based on market conditions and personal preferences. Correctly setting the main parameters, such as sizeUsd, rbLevelsPercentStep, rbLevelsSizeFactor, and additional ones like gapPercent and sellFactor, helps optimize the strategy for maximizing profits and minimizing risks.

For instructions and detailed information, check out my section on the JT-Lab forum: Guide to Algorithmic Trading and Bots from a Crypto Insider