Napbots is all about the freedom to choose your own strategies. Our professional quants have designed over 15 strategies, each optimized for a different trading profile. All you have to do is pick one. Having trouble deciding? In this article, we will introduce you to the Wise strategies.

wise strategy long only


It Pays to be Wise


First things first: what’s a strategy? According to the dictionary, it’s “a plan of action designed to achieve a long-term or overall aim.” The overall aim when trading/investing is to make a profit. How do we strive to achieve that? Not by acting at random, but by making decisions based on analysis and rules. That’s exactly what a crypto strategy does: it defines trading rules which drive trading decisions.

Wise strategies are long-term strategies that follow the uptrend on an underlying asset. This means they go long (buy), when the market goes up, and they stop operating when they detect a downturn signal.

There are currently 10 Wise strategies on Napbots, trading on ADA, DOGE, MATIC, SOL, XRP, BTC, BCH, BNB and ETH. They are all composed of three indicators: two medium-term and one short-term.

wise strategies btc eth xrp

Source : Napbots Coinshares – past performance are not a reliable indicator for future performance.


The medium-term (daily and weekly) indicators are tracking indicators. They trigger a buy signal when the price of the asset rises above a trend indicator. The short-term strategy is contrarian. It buys the crypto when its price is oversold, i.e when the asset has been trading at lower price levels and there is potential for its value to rise.


How does Napbots design Wise Strategies?  


Wise bots analyze historical data such as price, moving average to trigger decisions. By crunching this data, they generate 3 ranges of signals: 0, 0,5 and 1.

  • At 0, the bot does not buy. Having read the data, it concludes the market doesn’t have an uptrend, and it goes inactive.
  • If the signal rises from 0 to 0,5, the bot invests half the amount allocated to the strategy in the underlying asset.
  • If the signal keeps rising from 0,5 to 1, the entire amount allocated to the strategy is invested. The market is in « bull » period, with prices going steadily up.
  • If the signal falls from 1 to 0,5, the bot sells half of the assets.
  • If the signal keeps falling from 0,5 to 0, the full amount is disinvested, as we are now in a « bear » period with falling prices.


Advantages and Disadvantages of this Crypto Strategy


As their name implies, Wise strategies are designed to be smart. They benefit from upward momentums, taking profit along the way when switching to neutral in periods of downtrend. This is meant to minimize risk, but remember trading is never risk-free, and no strategy is guaranteed to avoid capital loss.

Wise strategies are long-only strategies – they never short sell. Short selling (or shorting) means selling an asset the trader does not own, speculating that its value will keep falling. This is a risky strategy, as the trader borrows the asset at a given price, and stands to lose a lot of capital if its price goes up instead of down. 

Wise strategies tend to do well in a trendy bull market, and turn defensive in a bear market. However, past performance is not a good indicator for future results. If the market is unstable, false signals may be generated. This can lead to mistaken decisions. For example, the strategy might trigger a buy signal, having spotted an upward price trend. If instead, the price falls on the following day, the strategy has made a loss.  


Conclusion


Wise strategies are long-term, uptrend-optimized strategies. They rely on market data to trigger buy signals when the market is in an uptrend, and stop operating in a downtrend. This makes them theoretically safer, but remember your capital is always at risk when trading.

Head over to your dashboard to browse through all Wise strategies and see if they are compatible with your exchange.


Disclaimer:

Investing involves risk, including the possible loss of all the money you invest. In particular, crypto-assets are a highly volatile and speculative asset class. Napbots is only suitable for traders who are willing to bear the risk of loss and experience sharp drawdowns. Past performance is not necessarily a guide to future performance. 

The purpose of this material is to provide objective, educational and interesting commentary and analysis on developments in the crypto-assets sector. Nothing in this material should be interpreted as constituting an offer of (or any solicitation in connection with) any investment products or services by any member of the CoinShares Group where it may be illegal to do so. Access to any investment products or services of the CoinShares Group is in all cases subject to the applicable laws and regulations relating thereto.