Active Trading

There are two broad schools of thought when it comes to investing.

The first is passive investing. Passive investors diversify their portfolio across the entire market, usually by means of a low-cost index fund.

They don't try to beat the market. Instead they try to capture the risk & return profile of the entire asset class.

The second is active trading. Active traders try to beat the market by picking winners, and timing the market.

Here's how HodlBot supports active traders.

Create Your Own Portfolio

With HodlBot, you can create your own set of custom cryptocurrency portfolios.

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1. Pick Your Coins

First, select what coins you would like to include in your portfolio. You can do this by simply looking up a coin by its symbol or name.

This list contains all ~150 coins that are available on the Binance exchange. You can sort these coins by symbol, name, market capitalization, or 24H price change.

Click the + sign to add all the coins you would like to include. Once a coin is included, it will be highlighted in purple.

2. Select Weighting Strategy

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Once you’ve selected what coins you want to be included in your portfolio, it’s time to decide how to weigh them.

There are 3 weighting strategies to choose from:

  • Fixed — assigns a constant weighting e.g. 10%.
  • Market Cap — Assigns each coin a dynamic weighting based on its market capitalization
  • Square Root Market Cap — Assigns each coin a dynamic weighting based on its square root market capitalization

After a weighting strategy is selected, you can choose to modify the weighting any individual coin.

Under market cap or square root market cap weightings, the ratios work in a similar manner. Setting BNB to 7, and every other coin to 1, means we will allocate weighting to BNB as if its market cap was 7x larger than it is.

3. Historical Backtest

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You don’t want to jump into your strategy blind. So after you’re done creating your portfolio, it’s time to run a backtest against historical data to see how your strategy would have performed in the past.

Fees and rebalances are taken into consideration for the backtest. For simplicity’s sake, we’ve scaled the backtest to start with a value of $1.

Play around with your portfolio and the backtest until you’re happy with the results.

4. Save & Execute

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If you’re happy with the results, you can save your portfolio and execute it right away. As long as you an active HodlBot account, the trades required to build your portfolio will be automatically executed.

Once you save your portfolio, you’ll see it show up on the portfolios page.