Comment To: BitcoinFib30-Clean

#2966
ratimbum
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Hi,

From a technical stand point this script is fine to use with leverage.

However, risk management is an ill studied subject. At the moment bitcoin is doing 5-10% intraday movements alts doing 10-50% intraday. If you lev 100x and your stop loss is of 1% you will get liquidated sooner than 1% bellow because of the minimum margin retention:
10x lev =

1% stop loss -> 10% loss of capital
5% stop loss -> 50% loss of capital
10% stop loss -> 100% loss of capital

This is not a market that is apt for leverage when intraday swings are this extreme. Personally, I think you want to stick to 1x right now and not give in to the temptation of leverage.

What concerns this specific script; you can see on the chart that the stop loss is 1-2% however, the conditions used in the script are “continuous”.

This means that if stop loss gets hit, it will immediately re-enter after it got hit and set another stop loss at 1-2% so you should really plan around the bottoms coming after the stop loss getting hit a couple of times. (Think 5 times or so. If it gets hit 5x at 1% and you are using leverage 2x that is still a 10% loss of capital! (You can win 1000000000000000% in profit but it just takes a 95% loss to get you liquidated!)

The way I mediated this is to use long time frame from 30 min+ (Sweet spot is 6 hours) since Haas will always wait for the next period even when using continuous indicators.

Personally; would not use leverage beyond 2x the returns on this script are insanely good without the risk of leverage; no need to get greedy when the market is this volatile.
Stay safe 🙂

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