Algonaut is a trading service in cryptocurrency market which uses automatic algorithms - bots.
A bot independently makes transactions at cryptocurrency exchange according to previously developed and tested strategy. Anyone can connect to the bot from their personal account at the exchange and start trading.
The bot is on the secure server and it trades 24/7 without any human intervention. There is no need to keep your personal computer on and download any applications or programs. In your personal account at algonautbot.com following a simple setup, the bot will start trading and making money for you without complicated actions and costs.
Algonaut supports 3 main currencies - Bitcoin (BTC), Ethereum (ETH) and Tether (USDt). If you do not have funds on the crypto exchange yet, you can replenish your account in fiat currency and buy any of the three supported currencies. (referral link to Binance)
The main instruments are BTCUSD, ETHUSD. The algorithm supports LTCUSD, DOTUSD, DASHUSD, EOSUSD and others as well. However, we have selected the ones that have the maximum profitability and safety in trading: BTCUSD and ETHUSD. Algonaut trades futures contracts for these currency pairs. Futures contracts allow you to make profit of up and down moves with small maintenance. Futures details are well described on the Binance exchange FAQ page.
Algonaut supports Binance and Deribit now. We plan to add Huobi, Bybit and Kraken soon.
It is kind of similar. Usually in copy trading you join the author's strategy of one of the traders. Here you join a strategy developed and tested by algo trading professionals. This is something between an algorithmic fund and copy trading, just without transferring funds to other accounts.
With the help of Algonaut you can receive additional income in cryptocurrency. For example, you have 0.2 Bitcoin. You can use AlgonautBot which gives you probability of getting 0.5 Bitcoin in a year. The same is for Ethereum.
When you buy cryptocurrency, you are counting on its growth in the future. But what if it falls, as it did quite many times in 2017-2020? If you don't want to take price risk of BTC or ETH – you can trade with the main currency USD (t) and get more profit with less risk. This is a win-win case for those who are afraid to buy cryptocurrency at high prices, but do not want to miss out on all the opportunities of this market.
Automatic trading is devoid of emotion and has a strong discipline in decision making. Human emotions such as greed and fear often prevent you from achieving results in trading on the markets. An additional advantage is the developed strategy, which has been tested on the historical data and in real trading. The accumulation of statistics allows you to test the strategy and reduce the risk of ineffective transactions in the future. However, it is not without risks, like any other trading on the markets.
Beginning Of Work
To get started, you need:
- register at algonautbot.com
- have an account at one of the available exchanges or register a new account with our help
- create API keys with access for trading in your account at the crypto exchange
- specify the API keys from the exchange in your account on algonautbot.com
- add and enable a bot in your personal account
Don't worry, this is easier than it sounds, and we have instructions for each step.
API keys provide access to an account on the exchange for Algonaut. When creating the keys, user chooses what actions can be performed by the one to whom the keys were provided to. Algonaut only requires the rights to trade and view the wallet balance. The service has no option to withdraw funds from an account at the exchange. User can always delete the API keys in his account at the exchange and deny access for Algonaut.
On the Exchanges tab, you need to enter the API key & Secret key for the exchange to which you want to provide the access. This data must be copied from the account on the exchange where the keys were created.
For Binance, you are to choose one of two connections: to BINANCE USDT FUTURES if the main currency for trading is USD (t) and BINANCE COIN FUTURES if the main currency is BTC or ETH.
For trading there is no need to transfer funds, it is enough to give the access to trading operations. All funds remain with users on exchanges, and the access can be stopped at any moment.
Binance is a quite popular and large exchange, and most users choose it. Binance allows you to trade with main currencies in the form of USD (t), BTC, ETH. Deribit is also a very stable exchange, although it is smaller in the terms of trading volume. Deribit is one of the first exchanges to trade futures, going through many volatile periods. Trading with the main currencies BTC and ETH is available here.
In the Bots section, you need to click Add Bot. In the form that appears, select the exchange to work with (having connected it in the Exchanges tab in advance). Then you select the main currency for trading, instrument, and risk. You can name the bot at your discretion and click Submit button.
The risk reflects the calculated drawdown that is possible when working with a bot. You can choose one of 3 types of risk: Low (15%), Medium (20%), High (25%). The higher the risk, the higher the profitability, and vice versa.
When trading with BTC or ETH main currencies, trading can only be carried out on BTCUSD and ETHUSD respectively. If you have both BTC and ETH, you can run 2 bots, one will have Bitcoin as maintenance, the other - Ethereum.
When trading with USD main currency, you can trade several instruments at the same time.
After adding a bot, it will be displayed in the Trading bots table. In the Actions column, click on the Play button. If the status of the bot has changed to Active, it means that the bot is enabled. If everything works correctly you will observe the pending request submitted by Algonaut at the exchange in the Open Orders (or Stop Orders) section.
In the Trading bots table, click on the Stop button. This will stop the bot and remove all active requests. When the button is not active, it means that the bot is either already stopped, or there is an active position. If you want to stop the bot anyway, you must first click on the "Close position" button, and then stop the bot.
Send an email to email@example.com and ask any question you have.
Results of Algonaut strategy
Since 2017, the bot's annual return is 140% in total on BTCUSD and ETHUSD with an medium risk level. Starting trading with 1 BTC in 2017, it would be around 33 BTC at the moment. Past profitability does not determine future profitability.
Algonaut allows you to trade on various instruments, but it is recommended to trade two at once – BTCUSD and ETHUSD. Diversification can provide smoother yield curve results.
In the period 2017-2018, the results are obtained by testing, starting in 2019 the bot trades in real mode with the same results.
Unfortunately, when trading with a bot, it is impossible to guarantee profitability. Past profitability does not determine future profitability. It may happen that the market will change, and the bot will no longer be effective. However, for now cryptocurrencies are great for trending strategies.
The main risk measure for an algorithmic strategy is the drawdown value. The lower it is, the better. For the medium risk, Algonaut has a maximum drawdown of 19%.
Drawdown is the % reduction of the balance from the maximum point to the minimum. For example, your account grew from 1 BTC to a maximum of 1.4 BTC, and then fell to 1.2. Drawdown for you will be (1.4-1.2)/1.4=14.3%.
The bot works best on medium volatility trend movement. Maximum drawdown can be noticed during the high volatility flat phase of the market.
If you trade two instruments at once, BTCUSD and ETHUSD, then 30 transactions are made per month on the average.
About 69% of transactions are closed with a profit.
We recommend trading for at least 3 months to charge the outcome of the strategy. It may happen that you will get a good profit in the first month, or you may get a drawdown and have to wait. No one knows the future, but statistics is on our side.
At first, the bot checks where the trend is directed and places orders only in the direction of the trend - TREND FILTER is used for this purpose. Positions are opened at the time of volatility surge or a breakout of the trading congestion.
Once the position is open, Algonaut places 2 orders to close: by TAKE PROFIT and by TRALING STOP. If the movement goes in the right direction, the position will close in profit at the TAKE PROFIT target price, if the trend has changed, the bot will quickly close the position at TRALING STOP, which is constantly “pulling up” as the price moves in the right direction.
Positions are closed either when the target price - TAKE PROFIT is reached, or when the TRALING STOP level is reached. TAKE PROFIT is determined in advance based on market volatility using an adaptive AI-mechanism.
When opening a position, the algorithm always considers that only a small % of the account can be put at risk. This allows you to avoid a serious loss and manage trading dynamically in the highly volatile crypto currency market.
An essential part of the risk management of the bot is position sizing. The higher the market VOLATILITY, the lower the position volume.
Leverage can reach 1.5-2x. It means that if the balance is 10,000 USD, the bot can hold positions on 15 000- 20 000 USD in total.
You have $ 10,000 and you are trading BTCUSD. December 30, 2020 Algonaut enters the position - BUY futures on BTCUSD for $ 16,000 at 28,400 (0.56 BTC) based on volatility of $ 235. TRAILING STOP is immediately set at 26 590 and is pulled up as Bitcoin grows. On January 4, 2021, the price reached the TRAILING STOP level of 31,300, and the bot exited the position. Profit: $ 1,624 or + 16 .24 % to the account. If you count in BTC, the profit was 1,624 / 31,300 or 0.0519 BTC.
Plans and purchase
The rates differ in terms: 1 or 12 months, as well as restrictions on the volume of trade and the number of the active bots.
In terms of functionality there is no difference. A 12-months subscription has discount 15-27% per month, depending on the plan.
Balance is the USDt valuation of the assets on the exchange account that is being traded. Thus, for the main currencies BTC and ETH, their revaluations in dollars are taken. For USDt, the value of the USDt estimate is taken.
For example: you have a primary account on Binance, where 1 BTC is stored. You want to try trading the Algonaut bot with the part of your funds. To do this you can transfer 0.5 BTC to the futures account. The current price of BTC is 40,000, that means that the estimate of your Balance on this account is 0.5*40000=20,000 USDt.
Balance limit is the maximum value of the balance, based on which the bot trades. It is set by the rate plan. Each bot compares the value of Balance and the Balance limit when trading and takes the smaller amount into account to calculate the volume of transactions, risk, etc. parameters. If the Balance is bigger than the Balance limit, trading is less efficient.
For example: We found out that your Balance is 20,000 USDt, and the plan is Standard (15,000 limit). The bot will see the value of 15,000, because it is the maximum for this rate. Trading in this case will be 25% less efficient and it is worth upgrading the plan.
Note: The balance limit applies to each bot separately.
An Active bot is a bot that is added, enabled, and trades. The user can add for example 3 bots in his personal account and keep only 2 active and switch between them. 1 bot can only trade on 1 instrument, so if you want to trade BTCUSD and ETHUSD, you need to add 2 bots and activate them.
Depending on the rate plan, the user can have from one to an unlimited number of active bots.
The bot will notify the user about open and closed trades and their results.