Emotions constantly shape the market, and the ability to analyze them is the key to investment advantage.
It is on this principle that Senti-Bot is based.
We are pleased to present Senti-Bot’s results for the month of September, showing how it effectively uses emotions in the financial markets.
Table of Contents
Video Summary (Polish version)
Senti-Bot results
We want to share with you an analysis of Senti-Bot’s effectiveness in the cryptocurrency market, allowing you to compare it with other available tools. We present the gross results (in red), which do not include the cost of Binance exchange commissions, which allows you to accurately compare the effectiveness of our bot with other solutions.
The total net profit since the beginning of the project is as high as 247% (in blue)!
Recall that Senti-Bot’s main objective is first and foremost to reduce losses, and only secondarily to generate profits. In the chart below, you can see the maximum decrease in the value of the portfolio in September, the so-called “portfolio drop”. drawdown.
Once again, it was not only able to protect itself from declines, which in the case of the Bitcoin holding strategy amounted to 9.1% at its peak, but also to use the decline to generate a positive return.
Senti-Bot achieved its effectiveness, mainly by anticipatory exiting positions ahead of anticipated declines in Bitcoin’s price, discernible in emotions analyzed from social media.
Evidence of the effectiveness of this approach was provided by the average values of transactions ending in profit and loss:
- The average profit per order is: +1,63%
- The average loss per order is: -0,34%
Bitcoin fell 9% in September, which Senti-Bot largely avoided.
After the cryptocurrency rebounded, the bot successfully benefited from the increases, ending the month with a gain of 3.7%, breaking its previous record.
Thus, we continue for the 3rd consecutive month with positive results.
Senti-Bot performance indicators
We emphasize that the effectiveness of Senti-Bot should be considered over a period of more than one or two months.
Important elements of evaluating the effectiveness of our tool are measurements of such indicators as:
- Drawndown
- Profit Factor
- Sharpe ratio
- Calmar indicator
Drawdown
Drawdown is, simply put, the largest percentage reduction in capital value from its highest level. It is calculated by comparing the highest previous capital level with its current value.
The maximum drawdown (over the entire period) for the CryptoPulse BTCUSDT strategy was -19.11%, while in the Bitocin hodling it was already -29.6%.
Profit Factor
Another measure that deserves attention is the profit factor. The ratio is defined as the sum of all transactions with a profit divided by the sum of all transactions closed with a loss. A profit factor above 1.50 is considered good enough, and above 2.0 is considered ideal.
The Profit Factor for Senti-Bot was 1.37 at the end of September 2024.
We can interpret this to mean that for every transaction the bot gained 37% more on average than it lost.
Sharpe ratio
In order to assess the ratio of the return achieved to the risk taken, we track two main indicators. The first is the Sharpe ratio, which measures risk-adjusted return (measured by average deviation). The higher the values of this indicator, the better the investment is considered. Investments for which the Sharpe Ratio is greater than 3.0 are considered among the best.
For Senti-Bot, the Sharpe ratio at the end of September was 3.9, significantly higher than for most mutual funds.
This is significant because a higher Sharpe ratio means almost 4 times higher returns relative to risk, which continues to confirm the attractiveness of our investment strategy.
Calmar indicator
Calmar Ratio is the second main indicator of investment performance, which determines the ratio of the rate of return (calculated on an average annual basis) in relation to the maximum slippage. In general, the higher its value, the better. This is because it means by how many times the average annual cumulative rate of return exceeds the past slide. Values above 1 mean that the rate of return, was higher than the landslide.
Calmar Ratio is the second main indicator of investment performance, which determines the ratio of the rate of return (calculated on an average annual basis) in relation to the maximum slippage. In general, the higher its value, the better. This is because it means by how many times the average annual cumulative rate of return exceeds the past slide. Values above 1 mean that the rate of return, was higher than the landslide.
At the end of September, Senti-Bot’s Calmar index was 5.11. Thanks to high profits, the bot has provided you with a result of more than 5 times its maximum drop in value.
Table – summary summary
We thank all our users for their trust and words of approval. We encourage you to follow Senti-Bot’s performance in the coming months!
SentiStocks team