Annual Percentage Yield — or APY for short — calculates the return of an investment over a 12 month period based on compounding interests or returns within the same period.
For instance, if a bot that has been operating for 6 months and has an absolute 25% return — the starting capital being 1000 American dollars, and ending up with 1250 American dollars as the final balance — the APY would amount to 56.25%. A Bot is a program that automatically executes buy or sell orders based on the entry and exit conditions set by the user, as well as monitoring the market conditions 24/7.
Users are able to visit the Bots Marketplace to rent a Bot Template, which can be used as a base to create up to 2 bots. When an entry conditions are met, the bot will create a Deal. A deal comprises a set of trades and is created together with the first trade once the entry condition is met for the first time.
Fund Allocation is the maximum amount of funds that the bot use to trade digital assets with.
Base Order Limit governs the amount of allocated fund used to execute the first trade. For example, if a user decides to allocate 10000 USDT and sets the base order limit to 20%, then the bot will use 20% of the allocated fund (which, in this case, it’s 2000 USDT) to execute the first order.
Extra Orders refers to the number of subsequent trades that the bot will execute after the first trade. If the Base Order Limit is set to 20% and the Extra Orders to 2, the Extra Orders will end up using 40% of the allocated fund.
A buy or sell trade is deemed to be filled if the entire quantity of the underlying digital assets are completely bought or sold. If the bot executes a buy order for 1 Ether and only bought 0.3 Ether, then this order is considered to be only partially filled. It will only be fully filled when the remaining 0.7 Ether is bought. When a deal remains open, the user can opt to instruct the bot to ignore the exit conditions and execute a sell order.
This is known as Liquidation. Once a deal is liquidated, the deal is considered completed and the bot then resets itself. After resetting, the bot will proceed to create a new deal based on the entry condition for the corresponding Base Order amount.
An Indicator is a trade signal or value derived from complex algorithm based on the type of indicator used. These algorithms acquire market data like volume, price, price action, momentum and more. This produces a value or signal for traders to use to aid them in their decision making process. Users are able to instruct the bot to close a deal once the profit reaches a percentage of the allocated fund. This exit condition is known as a Take Profit and it is more prioritised than indicator-based exit conditions.
On the opposite side of the spectrum, you have the Stop Loss. In this case, the user configures the bot to close a deal when the loss reaches a percentage of the allocated fund. Much like Take Profit, it has priority over indicator-based exit conditions.
CryptoHero tracks the Win/Loss Ratio based on all of the completed deals. For example, if all of the deals turned out to be profitable, then the ratio is at 100%. Trading Frequency defines the time interval that the bot will acquire market data. When set to 1 hour, then the bot reads market data in every 1 hour. Each time the data is acquired, the bot will then process the same data and determine if entry or exit conditions are met.
Users can choose to test the efficacy of a bot by running a backtest. This allows them to check if their bot’s performance is acceptable before deploying it to the real market.
Each users also keep a portfolio, which holds a collection of assets linked to their digital asset exchange. The total portfolio value may fluctuate due to the change in USD pricing for each digital assets.