[Snippet] Risk Management for SMM & Dynamic Slot Size

3 327 Views No Comments 7 months ago
  • I posted my risk management method in https://discord.com/channels/269316665483722764/491747780029579276/793910926466220032

    It is very important to have risk management to avoid liquidation and to utilize the maximum leverage level so you can trade even if you have small ammunition.
    Leverage does not matter. What matter is the budget you allocate for position size. Is it too big? is it too small? Can it avoid liquidation on 10-20% price change?
    To understand more about trading with leverage please visit https://medium.com/@cryptocreddy/comprehensive-guide-to-position-size-and-leverage-2e27764ce9e0

    So, here is a snippet that you can add to SMM (or other bot?) where it will automatically/dynamically adjust your max open and position size according your margin balance.
    The default is using budgeting 80% of your margin balance for trading (position + buffer for price change, margin budget) and from that 80% using 10% for position size (position budget). If you are trading several coins then you should split that 80%.
    Example you want to trade BTC. LTC, ETH with ratio 2:1:1 then for BTC margin budget is 40%, LTC 20% and ETH is 20% which make the total 80%. The position budget is the same.

    The code is based on how Binance calculation. I believe Deribit and other exchange have different calculation. For that, you have to explore the parameters yourself 🙂 But the rule stay the same, 80% for trading, 10% of that 80% for position.

    Hopefully you will find it useful and bring you much profit and of course, avoid liquidation!

    • This topic was modified 6 months, 4 weeks ago by smokyho.
    • This topic was modified 6 months, 4 weeks ago by smokyho.
    • This topic was modified 6 months, 4 weeks ago by smokyho.
    • This topic was modified 6 months, 4 weeks ago by pshai.
    • This topic was modified 6 months, 4 weeks ago by Derrick.
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